(Gordon Gecko)
We’ll, if the right thing is to manipulate the market so they profit from information that is not available to the general public. The answer is yes. It’s called Legislative Intelligence. They have it, you don’t.
Whether we want to admit it or not, we all want to profit from information, trends, and data that others either do not see or do not have access to. Get advanced information that would indicate a decline or increase in the value of the market and you can adjust your investment approach accordingly. Profiting nicely. Who exudes more greed and ego than we do? Congress.
Whether we want to admit it or not, we all want to profit from information, trends, and data that others either do not see or do not have access to. Get advanced information that would indicate a decline or increase in the value of the market and you can adjust your investment approach accordingly. Profiting nicely. Who exudes more greed and ego than we do? Congress.
Say you had information on legislation that had the ability to sink or soar the market. Congress has access to all the data, public and private, that drives the economy. Did you even know that, up until May of 2012, it was legal for members of Congress to trade on inside information (political intelligence)? Ethics legislation, ceremoniously attempting to outlaw insider trading by members of Congress, was adopted by unanimous consent in May. Very impressive. Great headline. Well done boys. You guys are awesome.
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The Senate voted 96 to 3 and the House passed it by a vote of 417 to 2. The bill has so many holes. The Congressional intent was to appear to be doing the ethical thing; the goal, make no change to the way they use inside information or political intelligence to profit. I want to thank the 5 guys who voted against the bill, they are the honest ones. As Nixon famously said, “well, when the President does it, it means it's not illegal.”
(Pelosi - Democrat)
From 60 Minutes, "Pelosi doesn’t deny that she profited in the Visa public offering; she merely contends that some tough credit card laws did, eventually, get passed. Perhaps that sort of twisted logic is what passes for absolution in Washington these days. The fundamental conflict of interest remains."
(Bachus - Republican)
"Perhaps more disturbing than Pelosi’s profiteering were the actions of Spencer Bachus, the Republican running the House Financial Services Committee. In 2008, after attending private briefings by Federal Reserve Chairman Ben Bernanke and then Treasury Secretary Henry Paulson, who warned the financial system was on the brink of collapse, Bachus essentially shorted the U.S. economy, betting against the very system he should have been working to stabilize," also from CBS's 60 Minutes.
This is great. Every time a politician gets in front of us, they project calculated mistruths and fascinatingly complex statements engineered to cover their asses should one be recovered from the archives and dissected. They are the carnies, we are the rubes on the financial and economic boardwalk.
This is great. Every time a politician gets in front of us, they project calculated mistruths and fascinatingly complex statements engineered to cover their asses should one be recovered from the archives and dissected. They are the carnies, we are the rubes on the financial and economic boardwalk.
The San Francisco Chronicle noted: Studies led by Georgia State University Professor Alan Ziobrowski found that stock portfolios of U.S. senators beat the market by 12 percent annually and House members by about 6 percent, returns he called abnormal.
“There is no law that says a congressman can’t go into the cloakroom, hear some information that is about to have an important impact on a company and then, before it becomes public, go right to his stockbroker and trade,” Ziobrowski said. “It is a tremendous temptation.”
“There is no law that says a congressman can’t go into the cloakroom, hear some information that is about to have an important impact on a company and then, before it becomes public, go right to his stockbroker and trade,” Ziobrowski said. “It is a tremendous temptation.”
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What have been the great buying opportunities of the past? The Y2K bug, 1987 crash and name any bubble. Perhaps the best, and most recent, opportunity was the government manipulated debt ceiling debacle that caused the S&P 500 to lose 19% between the high in July 2011 and the low in August. How many politicians bought in August? With great fanfare, as the compromise deal was announced, the market recovered and mushroomed 31% from October to March. How many Congressional leaders profited?
(Power to Manipulate Markets)
Watch the talking heads over the next 45 days. Watch the VIX (volatility of the S&P) . Politicians indicate resolution, markets move up. Politicians appear to be at odds, markets go down. It will be a daily occurrence. Oh, and Congress has offered to give up their holiday recess. How generous. Wouldn’t you forgo your turkey for goose and golden eggs?
Would Congress let the country go over the Fiscal Cliff to boost their own portfolios? Never:). Remember, they passed that ethics bill.
My theory? Congress will send us off the cliff, but there will be a trampoline at the bottom. First quarter 2013 will see a compromise between parties. Each side saves face and gets rich(er). They will buy at the low and sell on the recovery. This could be their last chance for huge financial gains. Prediction: S&P down 15%, rallies 30% +. You willing to jump with them? Do we have a choice? Sua Sponte.
Brafdford C. Bruner for Sua Sponte Wealth Management
My theory? Congress will send us off the cliff, but there will be a trampoline at the bottom. First quarter 2013 will see a compromise between parties. Each side saves face and gets rich(er). They will buy at the low and sell on the recovery. This could be their last chance for huge financial gains. Prediction: S&P down 15%, rallies 30% +. You willing to jump with them? Do we have a choice? Sua Sponte.
Brafdford C. Bruner for Sua Sponte Wealth Management
