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Analysis: Elite investors accessing Trump briefings is everything that's wrong with the stock market

October 15, 2020. Summarized by summa-bot.

Accurate information can be incredibly valuable to investors, especially in the midst of a confusing health crisis threatening the American economy. Unfortunately, access to that kind of intel is unequal.

More proof of that came from a report by The New York Times describing how senior members of President Donald Trump's economic team were privately revealing concerns in late February about the looming pandemic -- warnings that stood in stark contrast to the administration's public comments.

Word of private uncertainties held by US officials quickly spread to elite investors via a hedge fund consultant, the Times reported.

"Short everything" was the reaction of one major investor briefed on the memo from the hedge fund consultant, the Times said.

Although the Times said the briefings may not have violated any securities laws, the episode fuels a sense of unfairness about modern financial markets.

Hedge-fund consultants like the ones raised in the Times story charge up to $100,000-a-year for access to their written reports, according to Wall Street veteran Nicholas Colas.

And for premium access, these consultants can charge several hundred thousand dollars a year, Colas said.

Still, elite traders get access to information that everyday investors don't because they can't afford $100,000-a-year consultants.

"But the problem is — and what crystalized that story — the feeling that the public was getting one set of briefings from White House spokesmen, 'Not to worry — it's mostly contained, or all contained' and then donors and insiders were getting a different set of more worrisome briefings inside the White House," Chanos, the billionaire hedge fund manager said.

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