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View Diary: Why The Debt Limit Fight Will Be A Political Face-Off With No Gimmicks Or Constitutional Crisis (208 comments)

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  •  Salon: Eric Cantor's Glaring Conflict of Interest" (6+ / 0-)

    (July 2011): "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....)


    He's probably not the only Congress member who hedges their bets. The question is whether this personal insulation from suffering financial loss in case the government defaults influences in any way their Congressional decision-making with regard to the debt-ceiling, budget cuts, etc.

    •  That seems like obviou market manipulation (1+ / 0-)
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      You invest in a fund, the value of which depends on your acting in a specific way (an action which you either free to take or not) and then the take the action that is guaranteed to provide a better return on your investment. If that can't be prosecuted I don't know what can be. It's like betting on your own baseball team to lose and then throwing a game.

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