Salon: Eric Cantor is "invested in a fund that will skyrocket if there's a default"

[Amerigo Vespucci]

Eric Cantor's glaring conflict of interest
He's the GOP's chief debt ceiling negotiator. He's also invested in a fund that will skyrocket if there's a default
Jonathan Easley



http://www.salon.com/news/eric_cantor/index.html?story=/politics/war_room/2011/06/27/eric_cantor_conflict_of_interest

When Eric Cantor shut down debt ceiling negotiations last week, it did more than just rekindle fears that the U.S. government might soon default on its debt obligations -- it also brought him closer to reaping a small financial windfall from his investment in a mutual fund whose performance is directly affected by debt ceiling brinkmanship.

Last year the Wall Street Journal reported that Cantor, the No. 2 Republican in the House, had between $1,000 and $15,000 invested in ProShares Trust Ultrashort 20+ Year Treasury EFT. The fund aggressively "shorts" long-term U.S. Treasury bonds, meaning that it performs well when U.S. debt is undesirable. (A short is when the trader hopes to profit from the decline in the value of an asset.)

According to his latest financial disclosure statement, which covers the year 2010 and has been publicly available since this spring, Cantor still has up to $15,000 in the same fund. Contacted by Salon this week, Cantor's office gave no indication that the Virginia Republican, who has played a leading role in the debt ceiling negotiations, has divested himself of these holdings since his last filing. Unless an agreement can be reached, the U.S. could begin defaulting on its debt payments on Aug. 2. If that happens and Cantor is still invested in the fund, the value of his holdings would skyrocket.

"If the debt ceiling isn’t raised, investors would start fleeing U.S. Treasuries," said Matt Koppenheffer, who writes for the investment website the Motley Fool. "Yields would rise, prices would fall, and the Proshares ETF should do very well. It would spike."

[DearAbby]

1. Now we know what motivated his walk out.

::: jumps back with fake surprise ::: good old fashioned greed.


Edit to add: They don't seem to care about appearances now, Justice is for sale in the good ol USA, and so are the politicians. They have fleeced the country where the majority have no way of paying for representation, some American Dream eh?

[Angry Dragon]

2. Sounds like he is more interested in lining his own pockets

than fixing this country after he helped break it
and yes he helped to put us in this mess
but he would never admit it because he is a bully and a thief

[yurbud]

3. he would be out of office by the end of the week if the press did their jobs

so of course he's safe.

[Botany]

7. he would be out of office by the end of the week if the ....

.... press did their job. yup!!!!!

Remember in 2009 when he made up the story that his office had been shot at and there by
deflecting the real attacks on democratic party member's offices, property, and personal
space by "the brand new grass roots organic movement call the tea party?

How about if the press just played some clips of Cantor saying how much he wanted to work w/
President Obama?

[yurbud]

13. yep. and so on.

[Politicalboi]

11. If only he tweeted his

Weiner. LOL!

[Skink]

4. I'm more interested to see who's holding the credit default swaps.

America default we pay.

[Wilms]

5. Talk about "insider trading".

betting against america….

http://theobamadiary.com/2011/06/26/betting-against-america/

[Botany]

8. sorry to go there ....

.... but what an ugly mother fucker; he is betting against America .... class act he is not.

[lastone]

26. remember pachino and reeves in 'the devils advocate'

this scene could have come straight from that movie.
i hate this fuck and wish him ill.

[Tunkamerica]

6. I was just driving home and heard a gold commercial

and I thought to myself: "Self... how many of the people who are making these decisions on our economy are heavily invested in gold which stands to shoot up in price if we default?"

Got home and this was the first thing I saw.

[aquart]

9. If he profits from default, he should be arrested and tried for treason.

Abuse of office at the very least, aid and comfort to our enemies at the worst.

[LiberalFighter]

10. Absolutely!! He wants the USA to fail. He wants the American citizens to fail.

Except for himself. He also has a conflict of interest.

[flamingdem]

12. He wins 2x: with his fund and with making Boehner look like an Obama lover

to the teaparty..

[Lucky Luciano]

14. Silly silly post.

Embarrassingly silly. We ate talking about a miniscule $15k trade.

If he were betting on a US default, he would supersize it. Since he is not betting on a US default, you could easily argue that he is, by proxy, long equities because of the way treasuries and equities are correlated.

[Bluenorthwest]

15. So 15K is 'miniscule'?

A full time worker at my State's minimum wage of 8.50 makes slightly more than that 'miniscule amount' in a full year's labor. $16,320. Miniscule, why even look at it?

[Lucky Luciano]

16. Yes...tiny.

You really gonna wear a tinfoil hat over $15k?!

[formercia]

19. Perhaps that's what Cantor is hoping.

$15K suddenly turns into $150K. He should recuse himself, and perhaps resign.

The man is a scumbag.

[Lucky Luciano]

20. He is a scumbag, yes. However, with the power to destroy

...the country, he would be trying to make at least $150MM. Making only $150k would not be worthwhile.

If it's any consolation, he has definitely lost money on the trade.

[JDPriestly]

32. That's more than most seniors receive from Social Security in an entire year.

$15,000 is a lot of money for most Americans.

Few Americans have that much saved when they "retire."

[Cannikin]

17. That miniscule amount is a year's wages for many.

[Lucky Luciano]

18. Not the point.

The point is that if he were using his position of power to profit, he would set it up to make $100MM or more.

Let me know if a 150,000 print of Aug 30 calls go up on the offer for VIX options (a bet that volatility will go crazy).

[Vinnie From Indy]

23. Is that you Eric?

I find it mildly amusing to read your defense of Cantor on the grounds that 15k is not much money. You are as subtle as an earthquake.

Cheers!

[Lucky Luciano]

24. LOL. Not saying he is not an asshole...but

...this is not worthy of a conspiracy. That said, the republics would use this to force a Democratic congressperson to resign if the tables were turned. In that sense, it is fair game to go after cantor for this.

Think about this: by shorting treasuries, most people are only trading to watch the yield go up and not for a default. Someone betting on higher yields is, by the way markets are correlated, essentially long equities. Therefore, you could say he believed rates would go higher because the economy would improve and equities would do well. Also, those double levered ETFs don't behave as expected in the long run - it is possible for both the double long and double short to lose a lot of money over a year. He is almost certainly underwater on the trade. Those levered ETFs should be illegal because retail is too involved and they don't know how they really work. They are almost always a bad trade to buy and hold. Can be useful to day trade though based on how they are structured.

[dogmoma56]

29. the richest 5% hold 72% of Americas financial wealth 10 times the bottom 80%, top 20% holds 93% >Li

the richest 1% holds 43% of the nations Financial wealth-6 times what the bottom 80% holds, the richest 5% hold 72% of Americas financial wealth 10 times the bottom 80%, top 20% holds 93%, the bottom 80% only holds 7% of America's financial wealth. 44% of Americans couldn't get $2000 together if their lives depended on it.

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

TOO Rich to Regulate.! wealth is proof of gods favor of a man, thus it's a sin to tax/regulate them.
and the poor are being punished by god so it is a sin to help them... this is C st Christian's Dogma, the guys who sponsor the political prayer breakfasts like the one Obama went to recently. hillery clinton has been a disciple of doug coe since ~1994. she is apparently headed to be director of the world bank

the government is infested with C st, Doug Coe Theocratic Fascists, the Dominionists..the organization was started by a Nazi in 1934. the GOP is Theocratic Cargo Cult of OCD psychotic narcissistic wealth/power hoarders.. they are mentally ill and out of control.

http://doggo.tripod.com/doggchrisdomin.html

[Land Shark]

21. The original meaning of "Don't sell America short" comes to mind here... nt

[Uncle Joe]

22. Kicked and recommended.

Thanks for the thread, Amerigo.

[Zoeisright]

25. That is a clear conflict of interest.

Fucking little weasel.

[Beartracks]

27. No effin' way.

A big sarcastic "Wow, really?" for Mr. Cantor. So, if we understand this -- and we know that we do -- if a default is PREVENTED, it looks GOOD for Mr. Obama, and the GOP doesn't want that. If a default HAPPENS, it looks FANTA$TIC for Mr. Cantor personally, and it's a huge black eye for Mr. Obama.

Gee, I wonder which situation Mr. Cantor is working towards??

===============================

[donheld]

28. He's probably not alone

[dogmoma56]

30. so if you know you'll vote no, know others will and made this bet.. is that insider trading

throw their ass's of evil in jail for the maximum

[JDPriestly]

31. The Mafia and the Republicans call it "family values."

Meaning they keep the money in their own families. Nobody else counts.