It’s OK If You’re a Republican, I suppose:
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 is up 3.3 percent.
In case, you’re not getting what this means, Rep. Cantor, who is playing hardball on the debt negotiations, stands to profit heavily if the negotiations collapse and the debt ceiling crisis blows up. U.S. Treasuries would drop in value, and since Cantor ‘shorted’ them–bet that they would decrease in value–he would make a killing. As far as I’m concerned, it borders on treason to speculate against the full faith and credit of the Republic when you are an elected official of the Republic. And if you’re an elected official, you don’t get to claim the ‘hedging’ argument–your job is to keep U.S. Treasuries relatively stable in value and preserve their basic integrity.
1) Why isn’t the press covering this? Seems kinda important.
2) Could you imagine the shitstorm that would ensue if a Democrat had a conflict?
3) Why aren’t Democratic operatives all the way up Cantor’s ass on this? Might answer question #1.
The inability of Democrats to appeal to the lizard