Editore"s Note
Tilting at Windmills

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June 19, 2010

CANTOR PUTS HIS MONEY WHERE HIS MOUTH IS.... It's funny what turns up sometimes in financial disclosure materials. The Wall Street Journal had this gem yesterday:

WSJ's Heard on the Street reported this nugget Thursday that caught Washington Wire's eye:

Putting his money where his mouth is? Eric Cantor, the Republican Whip in the House of Representatives, bought up to $15,000 in shares of ProShares Trust Ultrashort 20+ Year Treasury ETF last December, according to his 2009 financial disclosure statement. The exchange-traded fund takes a short position in long-dated government bonds. In effect, it is a bet against U.S. government bonds -- and perhaps on inflation in the future.

Perhaps the most interesting thing about this is the way in which it confirms the worst suspicions about Cantor's understanding of current events -- this guy is betting on inflation? The economic phenomenon that's effectively non-existent given our current economic conditions? Inflation that the Fed isn't going to begin worrying about for the rest of the year?

The Washington Independent's Annie Lowrey added: "...Cantor is not a very canny investor. The fund is down 31 percent this year."

It appears Cantor's investment decisions are about as wise as his legislative decisions. Indeed, if Cantor wanted to give his portfolio a boost, he could do as the White House would like and endorse policies that would stimulate the economy. Americans would be better off, and Cantor's investments would be worth more money.

But, as Matt Yglesias explained, "either Cantor doesn't understand his economic self-interest properly, or else he's more committed to his principled opposition to sound macroeconomic stabilization than he is to the performance of his portfolio."

My bet is on the former. Cantor doesn't seem to understand much.

Steve Benen 9:00 AM Permalink | Trackbacks | Comments (9)

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Comments

I'm not sure about this.

Maybe he's confident that his GOP brethren will be incapable of stopping Obama from reviving teh economy and bringing us runaway 5% inflation like those economy-wreckers Ronald Reagan and Bill Clinton.


--Bill Jacobs

Posted by: toowearyforoutrage on June 19, 2010 at 9:22 AM | PERMALINK

His dogged adherence to ideology is preventing him from being properly informed to his own economic self-interest? Just like all those lower-middle class teabaggers who would be in poverty if the government actually adhered to their demands?

Posted by: Kris on June 19, 2010 at 9:25 AM | PERMALINK

He may have been following the worn path to a bloody billies prognostication . These are pleasing to the ear and the eye of the real true murican , whose numbers are frail and whose devotion is expensive . A small price to pay for a true believer whose friends mostly , if only technically , understand he is in trouble rapture wise .
Now there is a price !

Posted by: FRP on June 19, 2010 at 9:28 AM | PERMALINK

"Indeed, if Cantor wanted to give his portfolio a boost, he could do as the White House would like and endorse policies that would stimulate the economy. Americans would be better off, and Cantor's investments would be worth more money."

Is this the argument you really want to be making given Cantor's investment in a fund that bets on higher inflation?

Posted by: king buzzo on June 19, 2010 at 10:07 AM | PERMALINK

It depends how much of his net worth is tied up in this thing. If it's a reasonable fraction, then it could have been part of a sensible portfolio diversification.

The fund - apparently - is not betting on inflation. It's betting that US rates go up. This can happen even if there is no inflation, since the inflation rate is not the only determinant of US rates.

Posted by: a on June 19, 2010 at 10:39 AM | PERMALINK

Conservatives did everything in their power to bankrupt the government when they controlled it, and they fully intend to control it again soon. So betting on higher interest rates isn't necessarily dumb, and the time to buy shares is now wen the prices are low.

It's more outrageous than stupid, on a par with apologizing to BP.

Posted by: Aatos on June 19, 2010 at 10:57 AM | PERMALINK

Incredible story

Posted by: weihnachtsmann de on June 19, 2010 at 2:07 PM | PERMALINK

Not to worry, big oil will make up for the deficit in his portfolio.

Posted by: Ted76 on June 19, 2010 at 2:40 PM | PERMALINK

It also matters what Cantor's time horizon is. With interest rates on government bonds really, really low, it stands to reason that they'll be rising at some point in the future. Not this year; but Cantor's a young guy, this isn't a big investment--probably a small fraction of his net worth--and he's not likely to be counting on this money to pay this month's bills [unless he's really, really stupid, which I doubt]. This investment may well pay off for him sometime in the future--just not this year.

Posted by: David in Nashville on June 19, 2010 at 9:47 PM | PERMALINK
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