Key lawmakers, used inside congressional info to bet against market in 2008

[Stuart G]

two separate articles about this subject............

, Huffington Post and,

... original articles at...
Slate:
Spencer Bachus, Rogue Trader
By David Weigel

Posted Monday, Nov. 14, 2011, at 10:30 AM ET


http://www.slate.com/blogs/weigel/2011/11/14/spencer_bachus_rogue_trader.html



Last night, 60 Minutes ran a report on the shocking normalcy of stock trades by members of Congress. The world's greatest deliberative bodies are exempt from insider trading laws, even though its members get quicker access to market-moving information than almost anyone else. If you're one of those 9 percent of Americans who still trust Congress, well, avert your eyes.

Steve Kroft's report was based largely on a new book, Throw Them All Out, written by the conservative scholar/sometime Palin speechwriter Peter Schweizer. I'm working my way through it now, and one of the ugliest revelations so far -- prodded in the Kroft story -- is the degree to which Rep. Spencer Bachus, then ranking member of the House Financial Services Committee, bet against the market as it collapsed in 2008. Schweizer finds "no less than forty options trades" in Bachus's records from July 2008 to November 2008. The trades made him wealthier; almost nobody else had the information he had, and could have made them. Take this example, from the bottom of the collapse.

On the evening of September 18, at 7 p.m., Bachus received private briefing for congressional leaders by Hank Paulson and Federal Reserve Bank Chairman Ben Bernanke about the current state of the economy. They sat around a long table in the office of Nancy Pelosi, then the Speaker of the House. These briefings were secretive. Often, cell phones and Blackberrys had to be surrendered outside the room to avoid leaks.

What Bachus and his colleagues heard behind closed doors was stunning. As Paulson recounts, “Ben emphasized how the financial crisis could spill into the real economy. As stocks dropped perhaps a further 20 percent, General Motors would go bankrupt, and unemployment would rise . . . if we did nothing.” The members of Congress around the table were, in Paulson’s words, “ashen-faced.”

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second article...

Democrats Benefited from 2008 Trades, Too


By David Weigel

| Posted Monday, Nov. 14, 2011, at 2:25 PM ET
http://www.slate.com/blogs/weigel/2011/11/14/democrats_benefited_from_2008_trades_too.html

Please don't get the impression that Rep. Spencer Baucus was the only member of Congress who attended closed-door sessions about the 2008 economic crisis, then called his broker. In another part of Peter Schweizer's book, he checks the schedules of other attendees at a September 16, 2008 meeting with Hank Paulson and Ben Bernanke. It's a pure mixture of Democrats and Republicans.

"September 17, 2008, was by far Rep. Jim Moran’s ( Dem Virgina 8th Cong Dist) most active trading day of the year," writes Schweitzer. "He dumped shares in Goldman Sachs, General Dynamics, Franklin Resources, Flowserve Corporation, Ecolabs, Edison International, Electronic Arts, DirecTV, Conoco, Procter & Gamble, AT&T, Apple, CVS, Cisco, Chubb, and a dozen more companies." Schweitzer actually counts ninety companies that Moran dumped, helping him avoid big losses.

Also at the meeting: Rep. Shelley Capito.(Republican West Virgina 2nd Cong Dist) "She and her husband dumped between $100,000 and $250,000 in Citigroup stock the day after the briefing," reports Schweitzer. And then there was Dick Durbin, then and now the assistant majority leader of the Senate. "He sold off $73,715 in stock funds" after the September 16 briefing. "Following the next terrifying closed-door briefing, on September 18, he dumped another $42,000 in stock."
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comment.......these jerks should be in jail..now and forever..using info from Congressional closed sessions to bet against the
market...

[liberal N proud]

1. Isn't that insider trading and still illegal?

[montanacowboy]

3. Sounds like the 1% are exempt

can you believe this shit?

[joeybee12]

2. Glad this is getting a lot of play...

How Congress "excuses" itself from its own laws is reprehensible.

[notadmblnd]

4. there it is

Bernanke continued, “It is a matter of days before there is a meltdown in the global financial system.” Bachus was among those who spoke. According to Paulson, he suggested recapitalizing the banks by buying shares.

The meeting broke up. The next day, September 19, Congressman Bachus bought contract options on Proshares Ultra-Short QQQ, an index fund that seeks results that are 200% of the inverse of the Nasdaq 100 index. In other words, he was shorting the market. It was an inexpensive way to bet that the market would fall. He bought options for $7,846 on a day when the Dow Jones Industrial Average opened at 8,604. A few days later, on September 23, after the market had indeed fallen, he sold the options for over $13,000 and nearly doubled his money.

There are dozens of examples like this. On September 8, Hank Paulson gets a tip from GE about the company's sluggish bond sales, on September 10, Bachus shorts GE options four times. It's all legal, and Bachus is now the chairman of House Financial Services.

[xchrom]

5. Bring back La Guillotine. Nt

[blkmusclmachine]

6. Crooks, liars, cheats, and thieves