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Eric Cantor’s financial disclosures reveal that he bets against U.S. Treasury bonds

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RhodaA Donating Member (177 posts) Send PM | Profile | Ignore Sun Jun-26-11 04:32 PM
Original message
Eric Cantor’s financial disclosures reveal that he bets against U.S. Treasury bonds
ThinkProgress, June 18, 2011

House Minority Whip Eric Cantor (R-VA) has often expressed concern for how Obama administration policies are supposedly a “grave danger to America’s prosperity.” Now, the Wall Street Journal finds that Cantor actually invests in an exchange-traded fund that “takes a short position in long-dated government bonds” — effectively betting against the U.S. Treasury bonds that the government uses to fund its operations ...

... snip ...

If Cantor truly cares about “America’s prosperity,” one would have to wonder why he is literally betting against its financial future. The Washington Independent’s Annie Lowrey adds that “Cantor is not a very canny investor. The fund is down 31 percent this year.”

http://thinkprogress.org/politics/2010/06/18/103329/eri... /

No wonder he wants to tank the economy. Eric Cantor, where are the jobs?
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Pharaoh Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jun-26-11 04:34 PM
Response to Original message
1. Compare it to a baseball player betting against
his own team.
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dems_rightnow Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jun-26-11 04:36 PM
Response to Original message
2. It's a bet on interest rates
When interest rates rise, bonds lose value. It's not a bet on a government default. I'm also short (betting against) long bonds.
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RhodaA Donating Member (177 posts) Send PM | Profile | Ignore Sun Jun-26-11 04:37 PM
Response to Reply #2
4. But what would make interest rates rise?
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dems_rightnow Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jun-26-11 04:39 PM
Response to Reply #4
5. They are being held artificially low right now.
In an effort to spur the economy. I think they've got to let them rise a bit soon. It's possible I will be wrong.
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RhodaA Donating Member (177 posts) Send PM | Profile | Ignore Sun Jun-26-11 04:42 PM
Response to Reply #5
7. So you see no nefarious motive?
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dems_rightnow Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jun-26-11 04:49 PM
Response to Reply #7
9. I know I don't have one.
I think it's a wise investment that will make money.
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RhodaA Donating Member (177 posts) Send PM | Profile | Ignore Sun Jun-26-11 04:52 PM
Response to Reply #9
11. I wrote an alert post below, based on your comments. Thank you!
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Riftaxe Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jun-26-11 09:01 PM
Response to Reply #11
21. Instead of disputing their down right
factual accuracy...well please feel free to write one on this post, where I protest the lack of orange unicorns.
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dkf Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jun-26-11 04:53 PM
Response to Reply #7
12. I doubt he has enough money in this one investment to counteract the impact
Of a default on everything else. And if he has put everything he owns in this one fund he is a blooming idiot.
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JDPriestly Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jun-26-11 05:57 PM
Response to Reply #2
17. You are short on them, but you are not in a position to have
much influence on major factors and legislation that will decide what way the interest rates go.

Your bet does not involve a conflict of interest. His does.
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dems_rightnow Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jun-27-11 06:42 AM
Response to Reply #17
25. Based on that supposition
Edited on Mon Jun-27-11 06:46 AM by dems_rightnow
It would be impossible for any legislator to invest in anything at all.
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JDPriestly Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jun-27-11 02:11 PM
Response to Reply #25
28. I think that they should agree to invest only in US Savings Bonds
during their terms. Of course, they should not be permitted to bet against US bonds. Do you think that a member of a board of directors would be re-elected to the board if his fellow board members knew he was investing in bets against the stock price of the company. Well, they might, but other stockholders, the ordinary stockholders should be wary of any such company.

That is the only way you can prevent them from not only doing insider trading but from favoring companies in legislation in which they have an interest.
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Yupster Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jun-26-11 06:29 PM
Response to Reply #2
20. Me too
Been buying ETF's betting against the 20 year treasury for a while now.

I'm assuming rates will go up once QE2 ends in a week or so.

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Angry Dragon Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jun-26-11 04:37 PM
Original message
Sounds like he has a huge conflict of interest
Someone should call him on it and investigate why he would wish the country to fail
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PoliticAverse Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jun-26-11 04:37 PM
Response to Original message
3. There's a reason Congress is exempt from insider-trading laws you know...
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RhodaA Donating Member (177 posts) Send PM | Profile | Ignore Sun Jun-26-11 04:41 PM
Response to Reply #3
6. Good article - outrageous
"Except that one thing you can do as a member is study pending legislation and regulatory changes, call up your broker and instruct him to trade on that nonpublic information. Do this as often as you want; you will suffer no penalty. There is no limit to how much money you can earn on insider trading in the House or Senate. Lawmakers and their staffers are specifically exempted."

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Riftaxe Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jun-26-11 09:05 PM
Response to Reply #3
22. LOL perhaps you need to learn
Edited on Sun Jun-26-11 09:07 PM by Riftaxe
what insider trading actually is? Do you for one minute actually belief interest rates can continue being held at an artificially low rate forever?

Do you even know what the interest rate is, and what private entity sets it?

Did you ever even pass a high school or junior high economics course?
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PATRICK Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jun-27-11 08:19 AM
Response to Reply #22
27. BIS
announces interest rates must go up worldwide which makes the point that there is no need for a particular GOP puppet fix the game at this point. So basically Riftaxe has the best point to make about the article.

Nefarious GOP machinations/complicity in the finance industry's rule of the global economy is probably not the biggest part of the story. This one simply points out the general corruption of our elected officials poised to exploit disaster instead of relying on popular approval for the people's recovery. The Bush administration overlooked everything, national security included even after 9/11 in the pursuit of economic advantages. Those advantages come from not resisting the flow of ruthless money gangsters, poison corporations and the rewards of raping political office. The horror is that with all the rhetoric about conflict of interests how small an example this Cantor "revelation" is. In fact there is no conflict of interest- only a conflict with people finding out they have no part in their own government. There is no violation of law by the people who crafted that law to create injustice and more corruption.

To change the law you must change the people who write laws to protect their own interests against the society they made oaths to serve. To change those people you must overcome the election advantages they have similarly rigged financed by the few super rich they DO serve. Failing that creates the need for revolution and the frustrations of doing that out on the street forces the people- on purpose by the masters of the game- toward the Charybdis of violence and chaos. From Revolution often comes from the ruins the need to compromise with the vaults of old power while the wars rage on- again to the profiteering "leadership" and inevitable corruption. The trouble is this cynical process people like to despair and think of as eternal is hitting Mother Nature's brick wall of untended crises. This is the winding down not just of world economy but the world population itself, the soon to be executed having its myriad hands tied behind their back by the fakery of the World As It Is, a doomed mockery of reality.

Well, aside from my rant anyway, this is a small story that is likely only of interest as to WHY the WSJ made it a story in the first place. I have seen some stories in the Journal almost pleading for the crooks to act more respectable and orderly for the sake mostly of public image and next of protecting the profit. Since they are a large part of the facade over the chaos of topdown criminality every effort to retrieve the image of "sustainable" capitalism looks more and more inconsistent and crazy upon crazy. If first you must deny humanity its rights(to survive, to govern the share of the work and product, to seek health, shelter etc.) then this parade of loony infamy swirls over itself like a skirt tossed by the winds. There is practically no sense to be made of it, just the image of the monkey stubbornly starving to death with its fist stuck in the jar wrapped around what it cannot have because it won't let go.

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SpiralHawk Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jun-26-11 04:46 PM
Response to Original message
8. Republicons really do want America to FAIL
just disgustipating how unpatriotic the RepubliWankers are...
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RhodaA Donating Member (177 posts) Send PM | Profile | Ignore Sun Jun-26-11 04:51 PM
Response to Original message
10. Alert: From the comments, this may not be as bad as it sounds
Someone said that it's a bet that interest rates, which are now being held artificially low, will rise (inverse of bond prices). Not necessarily a bet that they won't raise the debt ceiling.

If I could delete this post, I would.
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AlabamaLibrul Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jun-26-11 04:58 PM
Response to Reply #10
13. That's what it is.
Edited on Sun Jun-26-11 04:59 PM by AlabamaLibrul
Bond rates go up, bond prices go down. That means any fund that holds bonds goes down in price, while one that takes short positions in bonds goes up in price.

Ticker TBT is Cantor's Proshares 20+ Yr Treasury Short Fund for anyone playing along at home.
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dkf Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jun-26-11 05:07 PM
Response to Reply #13
14. And bond quality is not supposed to be an issue for treasuries making it more of an interest rate
play than other types of bonds.

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pa28 Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jun-26-11 09:21 PM
Response to Reply #10
24. I'm not sure I follow the logic. Maybe you could explain your point in more detail.
Although his bet is relatively small he'll likely make money if the debt ceiling is not raised and the government experiences some form of bond default.

Since Cantor is central to the budget process the issue is legitimate.
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aquart Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jun-26-11 05:27 PM
Response to Original message
15. How much will Cantor make if the US defaults?
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Riftaxe Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jun-26-11 09:14 PM
Response to Reply #15
23. Probably nothing
Edited on Sun Jun-26-11 09:16 PM by Riftaxe
but everyone pretty much knows that, why bother asking?

It's not like the discussions is about alchemy or some other arcane subject, it is not even possible to graduate from a High School and not understand the subject (well it should not be possible, but a high school diploma within the last 30 years is pretty much a joke anyways)
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JDPriestly Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jun-26-11 05:56 PM
Response to Original message
16. Down 31 percent this year. Link from OP.
Cantor should be completely discredited based on this -- even if he has investments that "balance" this out. Shameless man.
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JDPriestly Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jun-26-11 05:59 PM
Response to Reply #16
18. Interest rates on US debt would go through the roof
until the whole economy of the world comes tumbling down.

This Cantor guy thinks he is Joshua and we are the enemy. What a fool.
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EC Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jun-26-11 06:23 PM
Response to Original message
19. So he actively works to make sure
the bonds do fail so he'll enrich himself? Isn't this comparable to insider trading?
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SpiralHawk Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jun-27-11 06:45 AM
Response to Original message
26. Typical republicon shitting on America
to try and make a greedy buck for himself...Ptoooey.
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ej510 Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jun-27-11 02:32 PM
Response to Original message
29. God Bless America? Lol!
House Minority Whip Eric Cantor (R-VA) has often expressed concern for how Obama administration policies are supposedly a “grave danger to America’s prosperity.” Now, the Wall Street Journal finds that Cantor actually invests in an exchange-traded fund that “takes a short position in long-dated government bonds” — effectively betting against the U.S. Treasury bonds that the government uses to fund its operations ...


I hate these hypocrites.
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KamaAina Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jun-27-11 03:17 PM
Response to Original message
30. Why does he hate America so much?
:wtf:
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