Cantor short Treasuries

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.

9 Comments on “Cantor short Treasuries

  1. There is nothing linked to the “here it is” text?

  2. Pingback: More Proof GOP Wants US to Fail: Eric Cantor Shorts T-Bills « Mercury Rising 鳯女

  3. Pingback: More Proof GOP Wants US to Fail: Eric Cantor Shorts T-Bills | Renaissance Post

  4. Pingback: The Debt Ceiling Fight Continues | Rortybomb

  5. How corrupt is too corrupt?! How is this even considered debatable? Where’s the SEC? Oh yeah, Cantor cut their funding…

  6. Thanks Mr. Henwood,
    This story is starting to get around, just heard it on Mike Milloy. greenfloyd

  7. Plus, aren’t all these guys long gold?

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