Posted on 11/15/2011 7:42:06 AM PST by blam
How Can The American People Ever Trust Congress Again After Learning Of The Rampant Insider Trading That Has Been Going On?
November 15,2011
Will the shocking insider trading revelations that have come to light in recent days finally be enough to motivate the American people to start throwing all of the con men and charlatans out of Congress? On Sunday, 60 Minutes opened up a huge can of worms when it did a feature story on insider trading by members of Congress. Up until now, the vast majority of Americans had no idea that insider trading was actually legal for members of Congress. In fact, as will be documented later on in this article, members of Congress have been using secrets that they have learned during the course of their duties to make huge amounts of money in the stock market. If you can believe it, during the financial crisis of 2008 some members of Congress were making huge stock moves that would only pay off if the stock market crashed really hard at a time when they should have been focusing on creating legislation that would help the U.S. financial system survive. It is hard not to feel sick after learning how low some of our "leaders" have stooped to enrich themselves. Now that the American people are learning the truth, how can they ever trust Congress again?
Even before these revelations about insider trading by members of Congress came to light, the approval rating for Congress was sitting at about 11 percent.
There is a widespread feeling in this country that our political system simply does not work any longer.
Nearly all of our "leaders" seem to be wealthy elitists that are rapidly becoming wealthier. Today, the average net worth for a member of Congress is approximately 3.8 million dollars, and the collective net worth of all of the members of Congress increased by 25 percent between 2008 and 2010.
It would be one thing is they were accumulating all of this wealth legitimately. However, it is just not right for members of Congress to use government secrets and inside information that is not available to the general public to make huge profits in the stock market.
If any of the rest of us engage in insider trading, it could get us thrown into jail.
But as a recent CNBC article noted, members of Congress can pretty much get away with it as much as they want to....
When you buy and sell stocks based on secrets you learned at the office, it could be insider trading.
But when a United States Senator does it, it's probably perfectly legal.
That's because the SEC has largely determined that trading stocks based on advance knowledge of action in Congress is not insider trading. But just because it is legal, that does not make it right.
Former Washington lobbyist Jack Abramoff made headlines recently when he claimed that "a dozen members of Congress and their aides took part in insider trading".
Well, it turns out that there has been a whole lot more insider trading going on than that.
If you have not seen the recent 60 Minutes report on this issue yet, you really should take a few minutes and watch it....
(Go to the site to view the video)
One of the politicians featured in the 60 Minutes story was Nancy Pelosi.
Pelosi has been doing incredibly well financially in recent years. For example, her net worth soared by 62 percent in 2010. If you can believe it, Nancy Pelosi is now worth 35.2 million dollars.
That is a nice chunk of change.
So has she been getting a little bit of "extra help" along the way?
According to a recent CNN article, one very preferential stock deal involving a credit card company went very well for her. It also turns out that there was credit card legislation that was pending in the House at the time....
Pelosi and her husband participated in an initial public offering of Visa in 2008, according to CBS. They bought 5,000 shares at the initial price of $44; two days later, shares were trading at $64, CBS said.
The network reported the investment came at the same time a piece of legislation that was opposed by credit-card companies was making its way through the House. But what is even worse is what many members of Congress did with secret information that they were told by U.S. Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben Bernanke at the start of the financial crisis of 2008.
On September 16, 2008 Paulson and Bernanke held "closed door meetings" with members of Congress and warned them that the financial system was about to totally collapse.
But instead of racing out to save the financial system, author Peter Schweizer says that many of our representatives in Congress raced out to save their stock portfolios.
In his new book, Schweizer alleges the following....
*Schweizer says that U.S. Senator Dick Durbin sold $74,715 worth of stock on September 17th and $42,000 worth of stock on September 18th.
*Schweizer says that U.S. Representative Jim Moran sold off shares in 90 different corporations on September 17th.
*Schweizer says that U.S. Senator Sheldon Whitehouse sold off at least $250,000 worth of stock between September 18th and September 24th.
*Schweizer says that U.S. Representative Spencer Bachus bet very heavily against the stock market in the days following the September 16th meeting and made tens of thousands of dollars doing so.
*Schweizer says that U.S. Senator John Kerry bought up approximately $350,000 of Bank of America stock and approximately $550,000 of Citigroup stock during October 2008 and November of 2008. It was during this time period that the bailout programs for the big banks were being developed and debated.
Are you feeling sick to your stomach yet?
But it isn't just members of Congress that are using secrets to make money in the stock market. According to an article in the Wall Street Journal, quite a few Congressional staffers have also been making questionable trades....
"At least 72 aides on both sides of the aisle traded shares of companies that their bosses help oversee, according to a Wall Street Journal analysis of more than 3,000 disclosure forms covering trading activity by Capitol Hill staffers for 2008 and 2009." But nobody is getting into trouble for any of this.
This is how corrupt our system has become.
And there are scientific studies that show that members of Congress have been doing significantly better in the stock market than the general public has been doing.
For example, one study from 2004 found that members of Congress do even better in the stock market than corporate insiders do....
"A 2004 study of the results of stock trading by United States Senators during the 1990s found that that senators on average beat the market by 12% a year. In sharp contrast, U.S. households on average underperformed the market by 1.4% a year and even corporate insiders on average beat the market by only about 6% a year during that period. A reasonable inference is that some Senators had access to - and were using - material nonpublic information about the companies in whose stock they trade." A recent CNBC article mentioned another recent study that found that investments by members of the U.S. House of Representatives beat the market by about 6 percent a year....
In the 2011 study “Abnormal Returns From the Common Stock Investments of Members of the U.S. House of Representatives,” four university professors found that a portfolio that mimics the purchases of House Members beats the market by 55 basis points per month, or approximately 6 percent annually. That study looked at 16,000 common stock transactions made by approximately 300 House delegates from 1985 to 2001. Clearly all of this is not just some huge coincidence.
So why doesn't Congress just pass a law to make it illegal for members of Congress to make trades based on insider information?
Well, a few members of Congress have actually tried to introduce such legislation, but it has never gone anywhere.
It turns out that members of Congress like things just the way that they are.
Being a member of Congress is one of the best jobs in the country. It is a great way to become famous, get rich and live the high life.
As mentioned earlier, only 11 percent of the American people think that Congress is doing a good job, and yet we keep sending the same people back to Congress time after time.
Since 1964, the reelection rate for members of the U.S. House of Representatives has never fallen below 85 percent.
Yes, our system is a joke, but the joke is on us.
Can we go back and investigate how Hillary Clinton made all that money in cattle futures? Did she do some sort of inside deal? The media never really drilled down into the details of what she did in that case.
But too many do not pay attention, and keep voting them back in.
This makes no difference...
This is peanuts. I wanted to know who shorted on 9/10.
How could the American people have trusted them even BEFORE they learned about this?
“Will the shocking insider trading revelations that have come to light in recent days finally be enough to motivate the American people to start throwing all of the con men and charlatans out of Congress? “
No.
The MSM is so F’n corrupt. They wouldn’t do the right thing if it were their only option.
Trust is based on expierience ~ therefore the answer is NO !
This is how the elected officials see themselves as “power elite” and above the law .
Term
Limits
Now
Check THIS out:
http://www.bloomberg.com/news/2011-11-15/gingrich-said-to-be-paid-by-freddie-mac-to-win-republican-allies.html
Becoming a congresscritter is a choice occupation guaranteeing financial security.
Every elected official (starting with DC) needs to be investigated, say 20 years past. their assets seized and their tired asses in the brig.
Starting with Princess Nancy. (You have to pass the bill before you can see whats in it.
Roll back all the laws that exempt themselves from being taxed, held to what they foisted on us.
Too many of their constituents, also, see it as their right to use their elected positions of power to enrich themselves, cuz they’re “stickin’ it to the man”.
Who ever trusted Congress in the first place? Insider trading is not the worse thing Congress has ever done.
Well, aside from Spencer Bachus, the implicated lean heavily towards the Democrats.
Not surprised.
Here’s the thing with insider trading...if I were a Congresscritter and had a large portfolio, what if I learned something that, while illegal if I acted on it, would destroy me if I didn’t? The pressure to not willingly lose your ass if you know how to avoid otherwise is hard to contain. Not saying it isn’t corrupt, but it’s not as black and white as they say, either.
Not to mention, this is just more fuel for the fire for the OWS movement, and, despite the fact that it leans heavily towards Democrats who have made the most money off of this phenomenon, could likely hurt conservatives, who are percieved as pro-capitalist and pro-business.
Every elected official (starting with DC) needs to be investigated, say 20 years past. their assets seized and their tired asses in the brig.
Who is we? What government entity represents a Constitutional opposing force to Congressional behavior, and has the guns and political clout to take such an action?
As long as the congressional overlords exempt themselves from following the same laws that they impose on everyone else, all of the funny business will continue.
Putting the D.C. in the District of Criminals!
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