PoliticalChic
Diamond Member
I just heard two interviews with Peter Schweizer discussing his new book, "Throw Them All Out."
I'll bet most of us suspected this legal-illegal game that politicians play, but Schweizer names names and explains the game. While I have only ordered the book, not read it, the following is from several reviews on Amazon; read, and watch your blood pressure rise.
1. Schweizer points out that if you're an elected official and you sit on an important committee, you are allowed to trade on the information that comes to you or even results from your committee-related decisions. It stands to reason that if you're on the banking committee, you probably trade bank stocks, playing it both long and short. If you're a staffer, you may accumulate sensitive information and sell it to hedge funds. A lot of careerists trade on non-public information.
2. Nancy Pelosi, the 60th Speaker of the United States House of Representatives with an estimated net worth of $58 million, bought 5,000 shares of V (Visa) at the privileged IPO price $44. This trade showed a profit immediately and the shares went up to about $88 in a matter of days. However, Pelosi worked on major legislation that if it had not been killed in the body she led, would have had a strong negative affect on the price right at that time. The rest of us can't do it because we're subject to strict conflict of interest rules, unlike lawmakers. Plus, we're not invited to participate in IPOs until after the price is run up.
3. Congressmen are big winners in the stock market. They cultivate companies in their loyalty structure from whom they get insider information often at the committee level. There are many ways they get rich while serving constituents, especially if you know what big deal Warren Buffett will do and when. Many names are given in this book of successful inside information operators within Congress.
4. The Pay-to-Play regime and the flow of insider information can be used by even the most novice traders using an online brokerage account. One big story is how Congressman Spensor [sic] Bachus used a private meeting with Fed Chair Bernanke and Treasury Secretary Paulson. Bachus was in the role of Ranking Member on the House Financial Services Committee. He used the dire information presented to him in this meeting to bet heavily that the market would go down, using option trades. Bachus, working with Bernanke and Paulson from July 2008 to November 2008, scalped $50K out of the falling market. The book has lots of war stories like that.
5. the political class is so intelligent that they--get this!--compel CEOs to let them buy lucrative shares in IPOs at very low prices in exchange for passing favorable legislation for those CEOs! And all the while, the stupid idiot people of America--that would be you and me who have a 9 to 5 job, worship God and like to go to a ballgame every now and then--just carry on with their ignorance-is-bliss lives while the political class keeps enriching their wealth, power and influence in this way!! Genius...simply genius!
[ame]http://www.amazon.com/Throw-Them-All-Peter-Schweizer/dp/0547573146/ref=sr_1_1?s=books&ie=UTF8&qid=1321369232&sr=1-1[/ame]
"Our government is completely corrupt.
Yes, this behavior may be technically legal, because of an absurd loophole that makes insider-trading rules not apply to Congress."
Rep. Spencer Bachus Should Resign In Disgrace - Business Insider
I'll bet most of us suspected this legal-illegal game that politicians play, but Schweizer names names and explains the game. While I have only ordered the book, not read it, the following is from several reviews on Amazon; read, and watch your blood pressure rise.
1. Schweizer points out that if you're an elected official and you sit on an important committee, you are allowed to trade on the information that comes to you or even results from your committee-related decisions. It stands to reason that if you're on the banking committee, you probably trade bank stocks, playing it both long and short. If you're a staffer, you may accumulate sensitive information and sell it to hedge funds. A lot of careerists trade on non-public information.
2. Nancy Pelosi, the 60th Speaker of the United States House of Representatives with an estimated net worth of $58 million, bought 5,000 shares of V (Visa) at the privileged IPO price $44. This trade showed a profit immediately and the shares went up to about $88 in a matter of days. However, Pelosi worked on major legislation that if it had not been killed in the body she led, would have had a strong negative affect on the price right at that time. The rest of us can't do it because we're subject to strict conflict of interest rules, unlike lawmakers. Plus, we're not invited to participate in IPOs until after the price is run up.
3. Congressmen are big winners in the stock market. They cultivate companies in their loyalty structure from whom they get insider information often at the committee level. There are many ways they get rich while serving constituents, especially if you know what big deal Warren Buffett will do and when. Many names are given in this book of successful inside information operators within Congress.
4. The Pay-to-Play regime and the flow of insider information can be used by even the most novice traders using an online brokerage account. One big story is how Congressman Spensor [sic] Bachus used a private meeting with Fed Chair Bernanke and Treasury Secretary Paulson. Bachus was in the role of Ranking Member on the House Financial Services Committee. He used the dire information presented to him in this meeting to bet heavily that the market would go down, using option trades. Bachus, working with Bernanke and Paulson from July 2008 to November 2008, scalped $50K out of the falling market. The book has lots of war stories like that.
5. the political class is so intelligent that they--get this!--compel CEOs to let them buy lucrative shares in IPOs at very low prices in exchange for passing favorable legislation for those CEOs! And all the while, the stupid idiot people of America--that would be you and me who have a 9 to 5 job, worship God and like to go to a ballgame every now and then--just carry on with their ignorance-is-bliss lives while the political class keeps enriching their wealth, power and influence in this way!! Genius...simply genius!
[ame]http://www.amazon.com/Throw-Them-All-Peter-Schweizer/dp/0547573146/ref=sr_1_1?s=books&ie=UTF8&qid=1321369232&sr=1-1[/ame]
"Our government is completely corrupt.
Yes, this behavior may be technically legal, because of an absurd loophole that makes insider-trading rules not apply to Congress."
Rep. Spencer Bachus Should Resign In Disgrace - Business Insider