Eric Cantor's glaring conflict of interest

[hedgehog]

He's the GOP's chief debt ceiling negotiator. He's also invested in a fund that will skyrocket if there's a default

When Eric Cantor shut down debt ceiling negotiations last week, it did more than just rekindle fears that the U.S. government might soon default on its debt obligations -- it also brought him closer to reaping a small financial windfall from his investment in a mutual fund whose performance is directly affected by debt ceiling brinkmanship.

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.)

http://www.salon.com/news/politics/war_room/2011/06/27/eric_cantor_conflict_of_interest

I'm not sure how Cantor is making out today. As far as I know, stocks are tanking but the Treasury bonds are holding value. But, we need too spread this story. Cantor's actions did cost many people significant amounts of money, money some of those people are living on in retirement. I've talked to several people who keep close track of politics, and they had no idea of Cantor's conflict of interest.

[elleng]

1. Stocks tanked yesterday,

stocks up earlier today, leveling at the moment.
'Everyone' went to Treasuries yesterday, NO lack of confidence in them.

[hedgehog]

2. I think Eric may have taken a personal hit, but millions of others

took a bigger hit because of what he did. They need to know about this. It's floating around the internet, but I don't think it's made it to print or television.

[unblock]

3. those short treasuries got crushed yesterday as people BOUGHT treasuries

an ACTUAL default on treasuries would make a short bond fund soar, but washington antics, the downgrade, and other things that make treasuries look riskier actually make OTHER debt (munis and state debt) look even MORE risky and that's why investors BOUGHT yesterday.

so cantor's conflict might not be as much of a conflict as it might seem.

beside, $1,000-$15,000? that's it? that's probably a small portion of his portfolio and without knowing his entire investment strategy, it's hard to say what his overall motivations actually are.


that said, he's a schmuck regardless. his conflict of interest is most likely the typical republican conflict of interest, such as lucrative jobs and directorships for familiy members, for himself when he retires, and guaranteed book sales for any book he chooses to affix his name to.