The Wall Street Journal reported the other day (here it is, but it’s behind a paywall) that as of his last disclosure form, House Republican leader Eric Cantor owned shares in a mutual fund that is short long-dated U.S. Treasury bonds. He is, in other words, betting that interest rates will rise, and hoping to make money off the fall in prices that would cause. (For my ancient primer on why bond prices fall when interest rates rise, see here.)
Cantor is in a position to help the U.S. default on its debts by blocking an increase in the debt ceiling. That would be very good for a short Treasury trade—rates would spike and prices would plummet. Even stoking the fear that that might happen could cause milder panics. Is this legal? Is anyone else doing this? Is the Republican flirtation with default a form of talking their and their donors’ book?
Note: following the WSJ story, I wrongly called Cantor the “whip” at first. He’s the majority leader.
There is nothing linked to the “here it is” text?
By: Muzz on June 26, 2011
at 10:52 pm
[...] now we have more evidence that the Republicans who have the most influence over whether America lives or dies are in fact betting on…: The Wall Street Journal reported the other day (here it is, but it’s behind a paywall) that as [...]
By: More Proof GOP Wants US to Fail: Eric Cantor Shorts T-Bills « Mercury Rising 鳯女 on June 27, 2011
at 12:43 am
[...] now we have more evidence that the Republicans who have the most influence over whether America lives or dies are in fact betting o…: The Wall Street Journal reported the other day [...]
By: More Proof GOP Wants US to Fail: Eric Cantor Shorts T-Bills | Renaissance Post on June 27, 2011
at 1:42 am
Ooops, sorry for the missing link. Fixed.
By: Doug Henwood on June 27, 2011
at 6:37 am
[...] Cantor is short U.S. Treasuries. Hmmm…..Doug Henwood has comments. Annie Lowrey noted this last summer along with [...]
By: The Debt Ceiling Fight Continues | Rortybomb on June 28, 2011
at 2:16 pm
How corrupt is too corrupt?! How is this even considered debatable? Where’s the SEC? Oh yeah, Cantor cut their funding…
By: bill on June 28, 2011
at 10:52 pm
Thanks Mr. Henwood,
This story is starting to get around, just heard it on Mike Milloy. greenfloyd
By: greenfloyd on June 28, 2011
at 11:21 pm
Woo Woo !
By: charles on June 30, 2011
at 7:55 am
Plus, aren’t all these guys long gold?
By: adam on July 3, 2011
at 3:02 pm