What would happen if Republicans positioned themselves to gain monetary rewards if the debt ceiling is not raised? Would there be repercussions for a House Majority Leader who stands to win financial gain for tanking our economy? Would you believe that this is not merely a hypothetical?
Salon.com reported:
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.”
The fund hasn’t significantly spiked yet because many investors believe Congress will eventually raise the debt ceiling. However, since Cantor abruptly called off debt ceiling negotiations last Thursday, the fund was up 3.3%.
Or in other words, the person who is playing hardball in bipartisan debt discussions stands to benefit substantially if negotiations collapse and the debt ceiling is not raised, causing the U.S. to default on their loans.
Our elected officials should be working towards stabilizing our economy, not betting against it.
Sources:
-Eric Cantor’s Investment, Susan Davis, Wall Street Journal, 6/18/10
-OpenSecrets.org,
-Eric Cantor’s glaring conflict of interest, Salon.com, 6/27/10
Whoa… stop the presses! Cantor has a whopping $1000 – $15,000 invested in a short fund?! Hope he’s not planning on retiring on that! And folks, whether the debt ceiling is raised isn’t why anyone should short T-bills… it’s the fact that neither party has shown the ability to effectively deal with the reality that our ballooning debt is putting us on the same path as Greece, Italy, Portugal, etc.
I hate to say it, but if they default on the debt limit, I think it will be time to pull Aristocrats like Cantor, into the streets and make them answer the people for their actions. Hasn’t been time for something like this in a long time. The French Revolution comes to mind.
“Socialist Media”… you ever thought about a job in stand-up comedy? Yeah, every channel and News outlet owned by one of 4 different asshole international corporations that are more into what’s hiding in Lindsey Lohan’s ass, then whats happening around the world (or hell, HERE). Far-left there.
“That revolution will be a real one, one with real bullets and Americans dying on the Main Streets of this once great country. Our US military will shoot us dead for… blah blah blah…”
First off, what Main Street? Walmart and the Big Boxes basically killed those things YEARS ago… pretty sure they’d have to kill people inside or underneath a Taco Bell or Office Max to pull that one off… maybe dig for the ruins that once were “Main Street”.
Secondly, go for it killer. I’m taking it maybe you’ve never served in the military. “The Revolution” would last about as long as it’d take for a couple of Abrams to roll up the street. Your shotgun isn’t going to do shit to Black Hawk, and good luck against something like our F-18s. The only ones who would fight would be the backwards militia types and they’d be dead before they left their mobile homes… because, trust me, there is ONE thing America is and always will be damned good at. Killing people.
The paranoid thoughts in that little mind of yours will never happen. IF there is a revolution, it’ll be much more subtle… I doubt there will be one at all and waiting for one is as absurd as waiting for the great socialist revolution that a lot of people in the previous century thought would eventually come (maybe through that “liberal media” of yours, Heh). The best one can hope for is a steady supply of compromises moving slightly one way or the other (my guess your hope would be the right, and mine the left). It’ll be slow, it’ll be agonizing, but it’ll happen all the same. Small increments…
I’d actually wouldn’t mind it if Texas rebelled… means everyone could have a Texan to shine their shoes and clean their houses.
Ok so I think we are forgetting something here- the fact that people won’t give a SHIT about what politician is responsible, or at least that won’t be the first thing on their mind. The United States will never be the same if we default. Who’s ever fault it is doesn’t matter. Our political system will have absolutely failed if the debt ceiling isn’t increased. Hundreds of thousands, maybe millions of people will loose their jobs and financial security. Maybe the reason why there’s still people thinking we shouldn’t raise the debt limit is because people have used politics when thinking about this rather than reality. If a politician uses reality as his guide, this discussion and our enormous debt wouldn’t be present.
C’mon guys, let’s think about people before politics. It’s hard to do sometimes but it is the attitude we need if the U.S. will ever escape this and other related situations.
It is a conflict of interest and anyone who would benefit financially should either be barred from being involved from this decision making process or arrested for treason.
Why is Cantor, who is a leading contributor to these negotiations, invested AT ALL in shorting government bonds? That seems to me to be a conflict of interest right there, let alone down the road. All this blatant bad behavior is really getting on my nerves and making we want to leave this country.
LOL – yeah, the “socialist media” comment cracked me up too. What we have is corporate media. If we had a liberal media, there would have been no Iraq war, among other things. But I digress.
The U.S. will not default because Obama has a trump card. He is going to play chicken with the right-wingers (who are prepared to ruin the economy if they think it will get them elected in 2012). Once it goes down to the wire, if the right-wingers won’t vote to raise the ceiling, Obama can ignore them on the grounds that the ceiling is unconstitutional: Unconstitutional Debt Ceiling.
This will reveal the destructive turn that the Republican party has taken, and Obama will come out on top just as he as done on several occasions. Remember – Obama is a constitutional scholar. The tea party right wing will look small and inconsequential.
Excellent post. They messed with the wrong Ivy Leaguer!
“Socialist media?” ROFL. A ‘free’ press owned by a few giant for-profit commercial concerns is “socialist?” Any credibility you might have goes right out the window with this statement. It’s astonishingly ignorant.
Good article. Too bad this dimwit had to weigh in first.
The US Govt will not default on it’s loans, whether they be in the form or US Treasury Bills, Notes or Bonds. That is a fallacy promoted by the socialist media to generate support for the Dems.
Please note I am an Independent and I hate Dems and Repubs equally because both of them have gotten us into this mess with their borrow-and-spend-tax-cut terroristic misrepresentation. I am also a career degreed accountant of 26 yrs and I can clearly see that the promotion of a default that has never happened will always be a fallacy unless someone can prove to me and literally millions of others that a default will occur when it has NEVER happened before.
Should the DEBT LIMIT not be increased….and I hope and pray it won’t…we, the American people, will survive. And in that process of surviving, we will create the revolution that is so long overdue. That revolution will be a real one, one with real bullets and Americans dying on the Main Streets of this once great country. Our US military will shoot us dead for rebelling until they finally realize that a corrupt govt is the enemy, not the people.
LOL, obviously a fox-watching teapublican.
Do you mean the majority owned News Corp? The one owned by Rupert Murdoch?
And if the debt ceiling is not raised, which has been done about 50 times, even the 7 times it was raised under President George W. Bush and we cannot pay our debts; it is certainly a major conflict of interest for Eric Cantor to be hedging his bets AGAINST the United States.
Who shouldn’t get paid? Our active military? Our seniors who paid into and have earned their Social Security & Medicare benefits? Our veterans?
Congress will still get paid (taxpayer dollars) and still get their Cadillac health coverage (taxpayer dollars) and still get their retirement accounts funded (taxpayer dollars) because their money is in a different account and guaranteed to be paid, no matter what.
And those Teapublicans like Boehner, Cantor, McConnell, Paul, Ryan, Bachmann, et al will still ensure that all those U.S. corporations keep getting their taxpayer supported subsidies (big oil, pharma, corporate farms, etc).
Only those of us not born into wealth will suffer.
Shut up! Go somewhere else with your propaganda. I am so tired of hearing people like you talk.
Tired of hearing the truth? Go ahead bury your head in the sand it doesn’t seem to be doing much good for you anyway.
They can’t HANDLE the truth!
“Socialist media?” Lol! Please change the channel and inform yourself before commenting in public forums. But, hey – thanks for the giggle.