WSJ:
WSJ’s Heard on the Street reported this nugget Thursday that caught Washington Wire’s eye:
Putting his money where his mouth is? Eric Cantor, the Republican Whip in the House of Representatives, bought up to $15,000 in shares of ProShares Trust Ultrashort 20+ Year Treasury ETF last December, according to his 2009 financial disclosure statement. The exchange-traded fund takes a short position in long-dated government bonds. In effect, it is a bet against U.S. government bonds—and perhaps on inflation in the future…..
Comments are a doozy :
- Cantor emerges as player and pain in debt talks (sfgate.com)
- Should US Congressmen be able to make Financial Bets Against the US? (skydancingblog.com)
- Reid Criticizes Cantor as Debt Talks Stall (online.wsj.com)
MR butts in for Pastorius (who has that whole day job thing going on)
from comments:
Anonymous said...Pastorius say "This is a great post but I think commenter #3 may be right. I think Obama is trying to make Cantor look like the big evil Jew."
Here is the 2010 filing or the latest disclosure for Eric Cantor. The value of this fund as of the end of 2010 was between $1,000 and $15,000. Even at $15,000; this investment constitutes a de minimis portion of his portfolio.
This is much ado about nothing assuming even that he owns the fund today and controls these investments.
http://pfds.opensecrets.org/N00013131_2010.pdf
What a patriot!
Maybe he knows something that the mainstream won’t except: The worst is yet to come, and bonds will lead the way.
*accept
Well he is investment is down 20% while the market is flat since Dec. Good job Eric.
I don’t really mind the pessimism, because it may be justified. However, this does create a rather disturbing conflict of interest. A US government official now has a personal stake in the US government failing. Eric Cantor should sell those shares immediately at the same or lower price.
It is a smart move. He will sell them I am sure when a competent President with an IQ over 50 is elected. This Bozo makes that investment a sure bet.
Bad investment, much much worse politics.
Pathetic. Another republican just doing his patriotic ‘wrap me in the flag I love the USA’ duty. If he was a private citizen I wouldn’t care less. But the loser is either 2nd or 3rd in the GOP hierarchy. What a scumbag.
I wanted to clarify that my 1st post wasn’t GOP bashing. I would write the same thing if the article was about a Dem leader. It’s a conflict of interest and ethically, if not morally wrong.
Cute. He’s part of the party that drove the economy into a ditch and now he bets against its recovery. He’s a poster child for the GOP. Greed is their creed and money is their god.
Just imagine the outrage if he was a sports star betting against his team! The “Black Sox’ were banned for life! Exactly the same thing here; just a thousand times worse and no one cares.
Cantor campaign slogan: Vote Eric Cantor. Profiting off the USA’s demise since 2009. Scumbag
If a Democrat were to invest like Cantor has done, the Republicans would be calling the Democrat “unpatriotic.”
Since Mr. Cantor is a member of the House of Representatives which passes laws that can seriously affect the value of U.S. government bonds, he is engaging in a direct conflict of interest. He should either cancel this deal or resign his seat in Congress. Has he no shame?
If the Republicans felt it was wrong to disagree with the previous President (i.e. unpatriotic), I wonder if they think its wrong to bet against the government while being paid and provided health insurance by the government?
It’s a conflict of interest. Since his vote and influence on just about anything can affect inflation, he may be more than betting on it but influencing it. Just like the Committee who “grilled” the BP CEO, all of the members had received contributions from the oil industry and I bet at least a few own stock. This would be unethical anyplace else except the US Congress.
The only Jewish American…….hmmmm. Sounds like he got tipped off! And on an energy investment, too. Eric….that certainly is no MITZVAH!
Libs making a mountain out of a mole hill
This is a major conflict of interest, not to mention appalling — to think that an elected official would actually be willing to allow the country default on the national debt and completely screw up the economy in the first place, with the damage lasting for years or even decades, and all for personal gain.
He shouldn’t just divest. This despicable person should resign.
Buckeye Dreams nails it with the Black Sox analogy. The issue isn’t just that it’s unseemly to bet against the government you’re a part of; it’s that Cantor is a key player in determining how his bet turns out. Absolutely disgraceful.
Actually, he was betting on America. When you short something, you’re making a bet that the price will go down. Because T-Bills are generally viewed as “risk-free,” if the price goes up, that means people view the bond as being more risky, or the rest of the market as being more risky. If he’s short, he bet that the economy would sort itself out, or that the T-Bill was safer than people were giving it credit for.
I expect better from the WSJ
Tom, seriously?
That’s a display of pretzel logic rarely seen since Steely Dan disbanded.
Are you kidding me Tom “betting on America”? This Guy is manipulating the market for self gain! Why are we letting him and others steal from the people like this… Wheres the outrage people?
Tom:
You are confusing price and yield – shorting the PRICE of a bond means you are betting the YIELD will go up. Cantor’s investment is most definitely a bet against the country’s financial reputation.
I guess I now understand why the rest of us have to endure the statement: “Bond prices move inversely to yields” EVERY time the journal talks in depth about the bond market. I always groan when i read it, but clearly it’s necessary info for the less-than-financially-savvy American public!
This made me think of those banks who bet against their customers while selling those same customers on the same faulty products, except the banks had less of a say in the outcome. We’re all being sold a faulty product by the GOP.
Issa is one of the biggest republican hypocrites in Congress. Please send this information to the progressive news media like Ed Schultz, Rachel Maddow, Lawerence O’Donnel. It’s about time Democrats and liberals start spreading the truth about the deception the Republicans engage in. The republicans have pondscum like Eric Cantor, Mitch McConnel, Rove , I could go on and on and they spread lies. Let’s just tell the truth.
When are the American people going to stop voting against their own interest; (republican)Please Americans don’t listen to soundbites and lies from either political party. Wasen’t it Ronald Regan who said something like accept but verify.
Cantor is just doing the old Wall Street hustle again. The great achievement of the GOP and its ultraconservative backers has been to make what was once considered racketeering into simple revenue generation using Mafia business models. Is there any difference between what Cantor is doing and what a Tony Soprano might do? When will kidnapping, prostitution, bribery, and murder for hire be given the gloss of legality as simply doing business? Some apparently already have-Clarence Thomas and his wife appear to be bought by Harlan Crow, David Vitter is still in office while Anthony Weiner never sealed the deal with anyone and is gone, Newt Gingrich is still pretending to run for president after impeaching a man who was 1/3 as rotten as himself, Mark Foley is a talk radio star, and no one from Wall Street has gone to jail and had their assets stripped to pay back the frauds they committed. Magnetar!
That’s right, and we the people not only take it but we keep voting them back in again and again. The tactics have work for thousands of years. They just work better in a 20sec soundbite on the six oclock news. Thus relieving us all of the burden of having look at actual outcome. Now please know I am not a conspirist nut job. You don’t need a conspiracy as long as all parties are ether lazy or greedy.
So the guy who just recently walked out on the critical budget talks because he had to share the toys is now betting against a recovery.
They imprison politicians for less than this in other countries.
I don’t know if I should laugh or cry. There is another bet on the table too. The GOP wants to re-shape this country into a country that is run by corporations and the ultra-rich.. I would imagine there a lot of politicians vote against the best interest of the USA (and many working towards its destruction). There is a reason all of our policies are failing now. Think about it, our country used to be on the top of innovation. This didn’t happen because we had bad teachers & schools. But now, public schools and teachers don’t work? It’s unfortunate that while our policy makers are busy greedily stuffing their pockets, they have dems, repubs and liberals fighting against each other about religion and morals so they won’t notice the destruction.
His bet against the US Tbills is unethical. Probably other congressmen have done the same. It is unlikely the ethics will investigate, or any other committee or federal agency. This could lead down a very long and winding road.
Unfortunately this affects the US people and Wall Street. Weiner lied and brought embarassment to the eHouse. Ensign was a liar and brought more shame on Congress. How can Cantor’s bet against the US just be ignored by the powers, that is really unacceptable.
If Cantor really intended to sink the economy for his personal gain, he’d probably have gone more than $15k short.
Dont get me wrong, a conflict is a conflict is a conflict. But $15k sounds more like a hedge (isn’t that the purpose of leveraged ETFs?) than the motive behind a devilish plan to sink the economy.
the main outrage, then, is how he is not an honest broker in the debt negotiations.
Some would call it treason.
Why don’t more people know that he stands to profit financially from a default?