White House economic advisers warned investors about pandemic, but not American public

Hedge fund consultant wrote that president’s advisers raised coronavirus warnings as early as February 

Gino Spocchia
Thursday 15 October 2020 13:21
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Senior White House economic advisors warned conservative donors and investors about their pandemic concerns as Donald Trump promised Americans coronavirus would “disappear”, according to reports.

That disconnect, which became apparent as advisers met with Hoover Institution board members on 24 February, would have enabled those investors to act prior to any economic slump caused by the pandemic, the New York Times reported.  

Those details were outlined in a memo The Times obtained, which was written by a Hoover Institution board member and hedge fund consultant, William Callanan, amid three days of meetings with White House advisers.

Mr Callanan noted how J. Philipson, a senior economic adviser to the US president, told investors on 24 February that he could not yet estimate the effects of the virus on the American economy.

Mr Trump had, however, declared on Twitter hours earlier that the coronavirus was “very much under control” in the United States, and added that the “Stock market [was] starting to look very good to me!”

To some attendees, the implication was that the coronavirus could prove worse than Mr Philipson and other Trump administration advisers were signaling in public at the time.

“What struck me,” wrote Mr Callanan, was that almost every official he heard from raised the virus “as a point of concern, totally unprovoked.”

And that included the president, who in tapped conversations with Washington Post journalist Bob Woodward admitted that the coronavirus was more serious than seasonal flu - but did not say the same in public.

On another day, National Economic Council director Larry Kudlow told board members that the virus was “contained in the US, to date, but now we just don't know”.

He had claimed in an appearance on CNBC hours before that the US was “airtight” against the coronavirus.

Mr Callanan’s memo was circulated among investors and Republican donors not long after, enabling them to bet against company stock prices, which they anticipated would fall.  

By late afternoon on 26 February, US stock markets had fallen close to 300 points from their high the previous week, reported The Times.

Since then, the coronavirus pandemic has killed almost 217,00 Americans, infected over seven million, and left some 13 million chronically unemployed.

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