“all the world's banana republics are just staring at the US with sheer and utter amazement as layer after layer of the unprecedented depravity of American society is exposed for all to see.” --Tyler Durden, ZeroHedge
The Christian Science Monitor reports that congress picking stocks with insider information.
(emphasis mine) [my comment]
Is Congress picking stocks with insider information? (video)
Insider trading by members of Congress is legal, according to a '60 Minutes' program Sunday. But there is legislation that would make it illegal.
By David Grant, DCDecoder / November 14, 2011
"It’s not illegal, but I think it’s highly unethical, I think it’s highly offensive and wrong.”
That’s Peter Schweizer, a researcher at the conservative Hoover Institution at Stanford University, talking about the ability of members of Congress to make trades in the stock market based on inside information they’ve gleaned from their positions on Capitol Hill.
Does that sound unbelievable?
Check out this clip of Schweizer from the "60 Minutes" interview.
The show hits a wide swath of lawmakers, from House Speaker John Boehner (R-Ohio) to House Minority Leader Nancy Pelosi (D-Calif.). Perhaps the most egregious example: Rep. Spencer Bauchus (R-Ala.). Bauchus, who now chairs the House Financial Services Committee, was sitting in meetings with Fed Chairman Ben Bernanke and Treasury Secretary Hank Paulson during the early stirrings of the financial crisis and then making big bets that the stock market would tank.
Isn’t this already illegal? Amazingly, no…
MYTH: Even if congressional insider trading is not covered by current insider trading laws, congressional insider trading is illegal under other laws.
FACT: In 1958, the House of Representatives adopted the Code of Ethics for Government Service into its Ethics Rules. Clause 8 of the Code of Ethics states that “Any person in Government service should…[n]ever use any information coming to him confidentially in the performance of governmental duties as a means for making a private profit.” However, this is a House Rule, enforceable only by the House Ethics Committee on an internal basis, and NOT A LAW UNDER WHICH A MEMBER OR STAFFER CAN BE PROSECUTED. Recent years have proven that House Ethics Rules are rarely, if ever enforced. In those cases where they are enforced, Members receive little more than a slap on the wrist. In addition, there is currently no mechanism in place within the House to track and monitor this. If we want to put an end to this practice, we must develop a new law that can and will be enforced.
In addition, the Code of Ethics for Government Service has not been adopted by the Senate and therefore does not apply to Senators or Senate staffers.
Finally, House Rules do not have any effect on those outside of the House. The Code of Ethics for Government Service has no impact on “political intelligence” firms who gather information from Members of Congress or their staffers and share that information with outside investors. …
“The issue is one of a double standard…. The only group in America that we exempt [from insider trading strictures is] politicians, who are probably the last people about whom we should be saying, ‘Oh, we’ll take their word for it.’ That’s what’s so amazing to me.”
Zero Hedge reports on Congressional Insider Trading Gone Wild.
Congressional Insider Trading Gone Wild
Submitted by Tyler Durden on 11/13/2011 23:23 -0500
Back in May we penned, "Why A Hedge Fund Comprised Of Junior Congressional Democrats Should Outperform The Market By 9%" in which the simple conclusion was that INSIDER TRADING IS NOT ONLY RAMPANT IN CONGRESS, BUT COMPLETELY UNREGULATED, as IT IS PERFECTLY LEGAL FOR CONGRESSIONAL STAFFERS TO TRADE AT THEIR LEISURE ON INSIDE INFORMATION: an exemption which the beta chasing 2 and 20 crowd on Wall Street would sell their first through fifth born to be granted, now that their glaring inability to generate alpha is laid out for all to see. Tonight we were happy to see that 60 Minutes has finally brought this gross and criminal injustice to the general public, and we expect that Congress will promptly legislate itself into actually complying with laws meant for the mere mortals out there. That said, we fully commiserate with the pathological excrement that makes up House of Representative these days: it is indeed a sad day when a Congressional member has to rely on honest work to make their millions as opposed to perfectly legal trading on inside information predicated upon laws that these very congress men and women legislate. Something tells us all the world's banana republics are just staring at the US with sheer and utter amazement as layer after layer of the unprecedented depravity of American society is exposed for all to see. [well said]
From 60 Minutes - the part where Nancy Pelosi's face melts is 9:20 in. And speaking of Nancy Pelosi it may be time to revisit: " Moody's Leaked Again: Told Nancy Pelosi Will "Probably Not" Downgrade US Weeks Ago; Did Her Multi-Millionaire Investor Husband Know Too?" and "SEC To Investigate Trades Based On S&P Downgrade Inside Information"... We wonder just how deep the SEC investigation has penetrated for it to have generated not even a peep 3 months later.
CNN's Jack Cafferty reports that congress got 25% richer during height of recession.
Congress got 25% richer during height of recession?
FROM CNN's Jack Cafferty:
While millions of Americans struggle under a weak economy, members of Congress keep getting richer. A lot richer.
"Roll Call" reports that members of Congress had a collective net worth of more than $2 billion in 2010.
That was up about 25 percent from 2008, during the height of the recession.
And these wealth totals likely underestimate how rich Congress really is. That's because they don't include homes and other non-income generating property, which could come out to hundreds of millions in additional dollars.
This wealth is split fairly evenly between both Democrats and Republicans.
Overall, about 200 members of Congress are millionaires. Once again, this doesn't include the value of their homes.
There are even a handful of lawmakers who are worth tens or hundreds of millions of dollars.
My reaction: All the other (much worse) government corruption I have been researched these last few years has desensitized me. I can only muster moderate outrage to this congressional insider trading.
1) Insider trading is not only rampant in congress, but completely unregulated.
2) It is perfectly legal for congressional staffers to trade at their leisure on inside information
3) 60 Minutes has finally brought this gross and criminal injustice to the general public.
4) This story is particularly ironic/amusing because the US government has been heavily cracking down on insider trading at hedge funds this year.
Conclusion: It is the media’s reaction to this 60 minute piece that is really interesting.
The reaction of mainstream media: SILENCE
The mainstream media is desperately trying to bury the story, as best shown by the New York Times.
Check out the screenshot below of the New York Times’ website. The only things the New York Times has published on the subject:
1) A story from before the "60 minutes" piece aired.
2) One online-only, one-paragraph "readers comment" piece.
Two days after the "60 minutes" piece aired, The New York Time has published neither an article nor an opinion piece about Congressional Insider Trading. The New York Time like the rest of mainstream media is trying to pretend the issue doesn’t exists.
The reaction of blogs and non-mainstream media: OUTRAGE
Despite the New York Times’ best efforts to ignore the story, it is not likely to work. The honest part of the media (blogs and non-mainstream media) is going crazy with this, voicing outrage.
Just take a look at Google's news results for Congressional Insider Trading.
Consider this: Capitol Hill insider trading has been going on for decades. So why is this only now coming to light? Why is a story that was so successfully buried for so many years now suddenly in the open?
The government’s control over the media is failing (see *****The ESF's Wurlitzer (Propaganda Machine) Is Slowly Dying*****). Incredibly damaging stories are being imposed and the ability to control them is being lost (the Gunrunner scandal is another example of this).
As ZeroHedge puts, “layer after layer of the unprecedented depravity of American society is [being] exposed for all to see.” It is only a matter of time before the really bad stuff starts reaching the general public, and then it is game over for the treasury department and its dollar Ponzi scheme.