If America Loses, Eric Cantor Wins
Last week with much fanfare House Majority Leader Eric Cantor pulled out of the negotiations on the debt ceiling. He said it was all the Democrats fault because they insisted that revenues had to be raised. Apparently stomping his feet and holding his breath until he turned blue wasn’t working. Could Cantor have another motive for pulling out of the talks besides love of rich people and hatred of taxes?
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.”
Gee, what a coincidence, Proshares ETF stock is up more than 3% since Cantor tanked the talks. By now we’ve all heard the Republican presidential candidates with their gloom & doom about America’s future. Democrats have carefully tip-toed into saying perhaps Republicans want to sabotage the economy on purpose. Until now it looked like the motive was to get rid of the president, but could personal financial gain be another one?
Under the logic of modern Republicanism, it makes perfect sense for Cantor to bet on economic collapse and then work for that outcome. My response to this story is “no shit Sherlock.”
The only thing that continues to surprise me is that Democrats continue to act at a loss as to how to use this kind of information.
Cantor also got a big chunk of the TARP money for the Bank that hires his wife
Cantor = Pete Rose
that isnt very fair to pete rose. At least pete rose, at some point in his life did something good. Cantor is just a waste of biological material.
Ok, I read this and I said, “what a piece of slimy shi”
then I saw it was at most $15,000.
I mean, the guy is a dick for sure. But, I don’t know if making 6% on 15,000 is really a reason for him to want a negative outcome. It’s not like he is going to triple or quadruple his money. That might stick out.
Now, if he doesn’t sell it and gives some lame ass excuse, then well, maybe we start the Weiner treatment and do some ethics investigations.
I’m in pretty much the same ETF, TYO which follows the price of the 10-Year Treasury Note (or, technically speaking, three times the inverse of the the 10-year bond’s price). If he bought it last year (around when I bought it), it has fallen from around $60 to below $40. He’s probably betting that the yield on American debt will rise (its almost guaranteed to once the Fed’s Quantitative Easing policy ends later this month, unless QE 3 begins). He doesn’t need a government default to make money on that investment.
@donviti-$ 15,000 is a BIG chunk of change for a congressman for one investment. Especially when he can help determine its outcome. There are laws against this type of behavior.
Now, I don’t know his personal wealth.
If he’s already loaded, I’d tend to agree with you.
If not, he’s gilding the lily.
he’s loaded. And $15k isn’t a lot to the guy and did you stop to see the return he would net? It’s not a lot. Non story, other than
yes and Obama is providing him the insider information to make the shorts work, his policies are the key to the Cantor profits.
this isn’t just for Cantor, this goes for all house folks. D and R
but, the R’s are the bad guys. The dems…ehhh…they fight for us