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Posted by: Doug Henwood | June 26, 2011

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.

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Responses

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

  2. […] 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 […]

  3. […] 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 […]

  4. Ooops, sorry for the missing link. Fixed.

  5. […] Cantor is short U.S. Treasuries.  Hmmm…..Doug Henwood has comments.  Annie Lowrey noted this last summer along with […]

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

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

  8. Woo Woo !

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


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