[ptolerezort]

sigh

There are so many problems with that article, it's exhausting just thinking about where to start.

[Clunlippibe]

GOP Negotiations/Conflict of Interest?
BY SILENCE DOGOOD – JUNE 30, 2011

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?

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.)

So he has maybe FIFTEEN GRAND TOPS invested in shorts. First of all, that's paltry. Second of all, Congressmen don't manage their own portfolios. They get professionals to do it for them, like most people with lots of stocks. If you have a diversified portfolio, you're likely to have some money in Treasurys, and as a hedge, you're likely to have some money in Treasury shorts. This is not out of the ordinary in any way, and doesn't imply a conflict of interest. In fact, as long as his stake in Treasurys is greater than his stake in shorts, it's against his interest to have Treasurys decrease in value.

[SnareeWer]

Here's the other reason this is stupid. If Cantor had money in something that suggested Washington DC would get nuked, I would still be skeptical that he was aiming for Washington DC to get nuked. By analogy, it's stupid to think that because Cantor's hedged his bets, he's trying to tank the economy.

[Obgrfbke]

Fifteen grand is about 10 years salary for a BA, mind you.

zing!

[Plonnikas]

You know, you could argue that fire insurance is betting against your house not burning down. If you get fire insurance, does that imply you'd like an arsonist to burn down your home?

Or life insurance! I'm betting against my own life! It's like Death of a Salesman!

[investmentonlinev2006x]

You know, you could argue that fire insurance is betting against your house not burning down. If you get fire insurance, does that imply you'd like an arsonist to burn down your home?

Or life insurance! I'm betting against my own life! It's like Death of a Salesman!

Insurance 101

Jewish Stocktake The process by which a shopkeeper destroys their own shop in a self-lit fire, in order to claim insurance. The payout from the insurance is invariably higher than the projected profits from the shop.

[tevyrefficy]

Why would anybody believe that short treasuries is betting AGAINST economic recovery?

(Serious question) Would higher interest rates would be good for the recovery?

[cookiemonster]

Higher interest rates would be the result of a recovery.

[andreas]

Then you're smart, Asher.

[Patamuta]

I guess you're oblivious to how much greed can affect human behavior, Zevico.

[Assungusa]

Higher interest rates would be the result of a recovery.

Thank you...

[adultcheee]

I guess you're oblivious to how much greed can affect human behavior, Zevico.

You're apparently oblivious that short treasuries should generally be viewed as a bullish bet on the us economy...

[ssyyyrruho]

You can "guess," but idle guesses are no substitute for thinking seriously about economic issues.

Let's suppose, for a moment, that this monumental sum of $15,000 USD "makes a killing."

Let's suppose, for a moment, that the economic otherwise goes in recession or depression because Eric Cantor wants to "make a killing" from $15,000. Property prices fall; salaries fall; unemployment rises. These prize economic conditions are excellent for the good Mr Cantor's future and current prosperity, of course, as well as that of his family.

What kind of return would you want from your $15,000 so that you can rest assured that you and your family would be sitting pretty for the foreseeable future while your other sources of income dry up? Is $15,000 the only thing he's invested, ever? What about shares on the stock exchange? What if your children lose their jobs? What if your property becomes worthless?

The fact that this man invested $15,000 USD in short selling does not prove that he has some undue motive to bankrupt the nation. It's $15,000. It's not like he threw his life's savings into this. It is terribly naive of you to think that he's betting on a $15,000 investment when entering into these negotiations.

The fact that you posted this article merely indicates how willing you are to take nonsense at face value.

No, $15,000 is not a "killing." And no, I don't think this is his only investment.

So why invest such a paltry amount of $15,000 in short selling?

[DownloadADOBEsoftware]

So he invested money because he did not want to make any money out of the investment.

[9V4i8xw1]

Okay - I'll buy that greedy politicians have our country's best interests at heart.

[Siuchingach]

Why would anybody believe that short treasuries is betting AGAINST economic recovery?

Because they're Greek?

[evammaUselp]

"Greek" usually refers to economically incompetent.

[teridbruse]

Ah. I thought the joke was about the fact that greek sovereign debt is a credit instrument while us sovereign debt is a rates instrument...

I'd bring the lads at the mill to stitches with that one.