> For example, Pelosi in Dec 22 was against more stimulus. Her husband buys deep ITM TSLA and AAPL calls that day. December 23rd, she is suddenly for stimulus again, with those same companies ralling 5%, giving her an instant +30 return.
> Congressman Gottheimer is absolutely an incredible options trader. He’s been selling calls at peaks on $MSFT all 2021, & seemingly buying back the contracts on dips. This in blocks of $250,000 - $5,000,000, which is incredible size given the amount of $MSFT shares he owns. For ex, on 02-12 he sold 500k $MSFT $160 strike expiring 06/18/2021. On that same day, he bought deep ITM calls of $1M-5M at $145 expiring 03/19/2021. The whale caught both of his movements as well.
Whatever the behind-the-scenes truth, I think the appearance of conflicting interests is a problem regardless. For a lot of elected offices and high public service positions, I think their wealth should be put into a blind trust, one constrained by law to buy broad, boring things like index funds.
That would surely be a problem for some individuals. But I don't think it's a systemic problem. We only need to find 0.00013% of the US population to fill the Senate and House together; surely there are that many people who are both competent and willing to put the public interest ahead of their own.
Just require them to announce their trades publicly 24 hours in advance. And let them manage their own finances. All these shenanigan's would disappear.
Also as a regular fintech worker, I have to get internal approval from my employer for anything I do. Why can government representatives trade willy nilly without any oversight?
When I was in that situation, I had to disclose all brokerage accounts to my employer, and authorise the brokers to send copies of the account statements to the employer's compliance department.
20 years ago it used to be the honor system. Now all the records are connected, many make it a requirement of employment to move all accounts into the firm.
Also, it's mandated by the SEC. There are obligations on you, your employer, and (if your broker is in the US) your broker to ask you, and to inform each other.
So it's kind of on the honour system - your broker probably won't ask you for payslips proving you don't work in the industry - but a lot of people are incentivized not to let it happen.
That's true too! Finance sites like Marketwatch and Yahoo have insider transaction logs for each company when you search their ticker symbol [1]. There should be a tab to view "US office holder and their immediate relatives" transaction log page as well listed for each ticker.
Not being specific enough made my comment misleading.
"The amendment also eliminated the requirement for the creation of searchable, sortable database of information in reports, and the requirement that reports be done in electronic format, rather than on paper."
Why not just prohibit members of Congress of owning stock? They are some of the most powerful people in the world. Why is it so much to ask that a Senator or especially Representative serving in the most powerful legislative body in the world just take a cash position for 2-6 years?
I fully agree, and I'd like to extend it to their families as well. But... you ask "why not" and the simple reason is that only they could enact such a law. And even when the laws are in place -- Trump ran roughshod over the foreign emoluments clause, and there were zero consequences. Why would the richest and most powerful Democrats set such a precedent, only to have it turned around when they're in power and stand to profit?
Are you advocating that if a relative of mine runs for office and is elected (whether I supported their candidacy or not), I should be prohibited from owning stock?
It could work the other way around, ie if your close relations have stock that may affect your governing decisions and they refuse to commit to re-investing more generally in the event of your election, then you are prohibited from running for office.
Obviously there would be complications, but are you advocating society shouldn't strive to clearly separate governance of the public from private, conflicting pecuniary interests? I can't tell if you're dismissing the problem or saying there's a better solution ...
I'm mostly thinking of spouses, parents and children, and I think that a blind trust should probably suffice (you could own stock, just not have direct control over it).
Yes - it definitely seems like it should be more or a "let's hope we can see both" type thing rather than an "either or type" thing. I think publicizing existing holdings is huge in that it can be done based on existing data sets as unusualwhale has shown and it is something that "we the people" can do, today - perhaps just by sharing this article.
Eradicating politicians doing insider trading is a much longer slog that we are mostly just hoping "those with the power" will enact against their own self interests.
Because investments are still a great way to hold your savings. The problem here isn't that they have investments (e.g. a 401k), it is that they are acting on insider information. Which is illegal to everyone else. At _minimum_ they should be held to the same standards. Though I think most people agree that they should be held to _higher_ standards, which gives suggestions like a blind trust. And obviously strict rules of if they break the blind part that they get jail time.
It’s not insider information. You might consider it material non-public information, which you can’t trade on in Europe, but in the US insider trading has a much more narrow definition: roughly it has to come from the insiders of the company. If your friend at Microsoft tells you that they won some massive contract, you can’t trade on it. If you overhear that news in a café, you can. If your friend at the government tells you they’re going to agree on a big contract with Microsoft, I don’t know if you’d be allowed or not but if you weren’t allowed I don’t think it would be insider trading.
Anyway, that obviously isn’t legal advice. And I agree that people should expect legislators to act with high integrity, but that’s not really how they vote.
Thanks! I actually appreciate the nuanced correction. I used insider trading as the term not specifically because the information was non-public but that it feels like they have inside knowledge since they are able to directly affect the markets. Maybe there is a better term for this? I don't think this still falls under what you said.
Again, they are serving in the most powerful legislative body on earth. Putting retirement savings on hold is an extraordinarily small request given the amount of power that even the lowest-ranking Senator yields.
I oppose this idea simply because most people’s’ retirement is held in investments now; I even think that congressional pensions have been dialed way back IIRC. I much prefer the “notify publicly well in advance” approach.
> Why is it so much to ask that a Senator or especially Representative serving in the most powerful legislative body in the world just take a cash position for 2-6 years?
I agree in principle, but a lot of these people literally serve until they drop dead, which is a different problem with congress. Might be a bit much to tell someone not to invest for 40+ years.
I am not at all opposed to this strategy either, but as you seem to imply, it would really need to be hardened against other corruption and schemes like that the blind trust has to be run by the same government office.
It is why I like the fact that they just have to announce their stock trades ahead of time, it still allows them autonomy, but also there is no sense in front running them if they are not trading on insider knowledge. Their performance should essentially be in line with the market, not like Mr. Gottheimer that seems to have tripled his net worth in FY2020.
I think it would be perfectly fine to let them have their money in broad index fund, or maybe an actively managed fund which should also be open to every citizen. Allow withdrawals etc. only once a month or so to avoid market timing.
That is bad policy. There is a segment of middle/upper class Americans who own stock; anyone with a retirement plan that funds it. Forcing middle/upper class legislatures into a cash position instead of stocks would make them less, not more connected to similarly placed people. If they can't own stock does that mean they'll just instead invest in real estate which can be even more conflicted?
Of course, if they held widely diversified Index funds there would be fewer conflicts - but not zero as evidenced by legislators trading around COVID briefings.
I think they're too aware that with real dollar inflation probably running at least 10% per year (per Michael Saylor), they'd loose too much value for them to consent to holding only cash for 2 to 6 years. For every $100K they had, they'd end up holding something near $81K down to $53K in real purchasing power... and that's assuming they were content to only stay in power one term.
that's exactly the point. it's almost a game for rich people to pump up their legacies or because they're just bored. you want them gone. When they are gone, there will be plenty of people left that choose never to buy another stock again for the rest of their lives. No law, just a personal code. Because the influence and power obviously last after you leave office. Monks and samurai can exist. Then so can a congressional Bushido. You just have to stop voting for people who think about their stocks all day while sitting at meetings.
Yes - in addition - just have documentation sites like unusual whales which track the trades, holdings and profits of politicians - create infographics prior to every election and distribute them to existing voter information/polling prediction sites like real clear politics.
Politicians already long on certain stocks can also profit from legislation that they are passing. Being privy to insider info which leads to continuing to stay long a stock is an advantage that wouldn't be detected by just sharing recent trades.
In addition to trying to eradicate insider trading - just shedding light on existing holdings by US office holders will have a huge cleansing effect that will go a long way to showing potential biases/conflicts of interest.
I would love to believe that would make a difference, but in a hyperpartisan world where many vote based on a handful of ideological allegiances, how many would seriously be moved to change sides over something as small as a little corruption? Or is this something that would be more at the primary level, where it really is more about personality and personal qualities than party?
In any case, the Trump movement's whole response to this kind of thing was a combination of denial and "lol everyone does it", and it seems like that was enough for many in that camp.
There are still voters on the fence / differences in voter turn-out that mean politicians worry about scandal. The main effect is that these politicians will probably be replaced by different ones from the same party. Moreover, other politicians, hoping not to be replaced, might stop doing blatant insider trading.
Or is this something that would be more at the primary level, where it really is more about personality and personal qualities than party?
>> For sure there are many factors that influence someone's vote. I think you're right - its more likely to cause leadership rotation within the parties where the rest of the factors are more similar (i.e. stance on gun rights, etc.). The challenge today is that incumbent politicians within their own party tend to have great name recognition among voters - but are more likely to be in the pockets of corporations. This would enable challengers within the party to potentially have an issue they can highlight.
"lol everyone does it"
>> And perhaps articles prove in a data science-y way that perhaps this is true - many politicians are doing it.
Or perhaps better yet, simply make all trades public in real-time.
Trades could be scrutinized for insider trading by both the SEC and independent traders/firms, just as there are independent services scrutinizing the crypto blockchains.
Insider trading could then even plausibly be legalized by eliminating the advantage of insider trading (it'd have to be based on a lot of study of the data). If we (or other funds) can setup triggers to act on the trades of insiders as soon as they hit the wire, the market will move against them, and we can also share arguably the same advantage by doing so.
That doesn't work. If they are aware of a huge non-public deal, the market may react based on their trade, but not nearly as much as when the deal goes public.
It would help. There are already funds that track the money of politicians and invest accordingly. If they submitted a large options trade, the funds would front run them and take away much of the profit.
I'd have to think it through more, but my gut says that I don't care if the bet is secret. Although I would separately support a law that all elected officials must have extreme transparency into their finances.
I think people should give up all of their right to privacy (when it comes to business, finances, travel, and even conversations) when they acquire a large amount of power. In my head, a US senator would have that much power and that little privacy, whereas a US representative in the House would not.
We only need to find 0.00013% of the US population
Maybe we should use sortition then instead of elections? What could be more democratic than random average people (meeting some criteria) taking a turn at the wheel?
> Granted, neither do a significant percentage of the currently serving congress if current policy is anything to go by.
I think they understand just fine, most of the time, but are more interested in enriching themselves and their cronies than looking out for their constituents or the health of the system as a whole.
Take the existing system and have the house and Senate argue every official act to the sortition for a vote. How would this be worse than the current crony capitalism we suffer under?
Regardless of whether one may like the initial selection criteria or not, what you describe is precisely why the country (USA) was supposed to be led by land owning free white men. The assumption being that people that fit that criteria, plausibly possessed a requisite initial selection criteria set of skills and knowledge that would constitute the pool of best qualified people to run a government in the common interest. From that pool of people their peers would further select amongst each other using those very same abilities, knowledge, skills, and capacities to further choose the utmost best person to lead.
I realize that just saying that may cause some consternation among some, but it is objectively the best selection system one could possibly devise, for any people anywhere, regardless of whether people like it or not.
It's not even a selection system that is not used all over the place from choices within your family where there are certain prerequisites like being an adult or a parent or having to be a member of the union in order to vote on union matters, or having achieved certain certifications and qualifications before you can make decisions about building a highway bridge.
It is and has not been a net benefit to any of us that "democracy" was first imposed and then expanded when the founders of the USA were very explicit about the fact that democracy was a recipe for disaster and would invariably cause destruction … as it has. Personally, I would very much have been ok with benefitting from properly qualified people making decision for me that I have no competent capacity to make for myself, rather than having lived in a society where everyone thinks they are equally smart and competent and my vote counts the same as some fool who does not know that a week is seven days (something I heard someone in her early 20s say yesterday. She thought the week excludes the weekend)
The destruction to the Founder's political vision didn't come from expanding the franchise, it came direct democracy. The idea was explicitly that the average voter was completely unqualified to choose the President, and that the only question the voter would be asked is: "Who in your town should make decisions for you?" That person would go to your state legislature, which would vote for your state's electors, who would go and deliberatively decide the President. With the 17th Amendment and binding primary elections we threw out that wisdom.
> Regardless of whether one may like the initial selection criteria or not, what you describe is precisely why the country (USA) was supposed to be led by land owning free white men.
> I realize that just saying that may cause some consternation among some, but it is objectively the best selection system one could possibly devise
Combining these two statements suggests that you would advocate for white supremacy. Is that a correct deduction of mine? I would rather ask than just jump to conclusions.
The career politicians, intelligencia, and c-suite technocrats have been running shit for the past half century or more - you see where it's gotten us, to the ruin you describe.
I agree, I have long thought sortition might be the right answer. Right along with leveraging modern technology to reset our representative-to-citizen ratio to something like the constitution originally prescribed.
The thing is, the last few times I recall when some have tried more direct democracy (Brexit, a few referenda in europe, california ballot measures) it seems to lead to decisions that seem rather sub-optimal. I am not sure the random citizen might actually be better at governing that a professional politician.
I think that is a completely fair assumption, you may be right. Partly why I think we should dramatically increase the numbers of representatives is to mitigate this problem somewhat. On average, I think a lot of regular citizens would do just fine. So we limit the damage by limiting the amount of power a single vote has.
It's kind of the same reasoning I use for extending the vote to children. In a country of 330 million, each individual vote is nearly meaningless on it's own so I figure the risk is much lower than the benefit of getting people involved at a younger age in a future that they should care deeply about. HN did not collectively appreciate this suggestion when I made it, however :).
The problem here is that they then will have do depend even more on others than people who choose the job do, which shifts the problem one ring out. So this will give more influence to lobbyists, who know their areas well and are experts in talking people into things. There's also the problem of staff. Politicians tend to bring key staff along with as they rise. But where will randomly selected legislators find a half-dozen people with the necessary knowledge and skills?
I think random people would either be shallow and selfish about it or be so intimidated by their responsibilities that they would be at the mercy of knowledgable advisors chosen from the same small class of people who run the government now.
I agree that ALL government employees, their spouses and companies should own no individual stocks until they leave office/job. However, the politicians are just the tip of the iceberg in regards to the rigged game of Wall Street. We have bigger fish to fry but no one seems to like fish anymore.
I agree in spirit, but this is overbroad. The various branches of government employ millions of people. A cop, or VHA nurse, or my friend who works a non-managerial role at the EPA can own stock. It's the decision-makers who were should be concerned about. That group extends beyond congress, but doesn't contain literally every government employee.
I don't think normal middle class government workers owning stocks is a real problem. I get where you're coming from (technically they could have inside information), but it's not nearly as impaction as the elected officials having very large swings hinge on their own policies.
I'm thinking of running for city council because I actually give a shit about civil service, the importance of good government, and I think I'm a better option than some of the absolute nutcases even running for mayor in my city.
Politicians should take a vow of poverty, agreeing to never spend more in a year than the average American. Great way to weed out all of the sharks and keep only the people who actually care and want to lead the country in the right direction, whatever that takes.
Would it really help? You can't restrict their complete social circles as well. All it takes is 1 willing friend who will happily accept your stock tips ahead of large announcements and who's willing to give you a share of the profits in return.
In practice, I agree we need more. In particular, I think requiring that their finances be completely transparent the rest of their lives would be a huge step forward.
I speak for a lot of people that while I agree with you in principle, the sudden interest in this idea in Republican circles after the prior administration's absolute mockery of conflict of interest and self-dealing laws seems hypocritical.
Laws need to come into force sometime - and as long as we're not going to get a ping-pong law that's repealed as soon as republicans get into power then I don't mind it happening while democrats hold the torch. I am well aware of the hypocrisy some folks show on this topic but, honestly, it's a good law no matter who is in power and if we're just trying to be petty we won't get anything done.
Can you provide any sources for your claims that prove Trump administration personnel directly profited off any supposed self dealings? Or are you just pulling this out of your ass bc you are a lib? Also, who else specifically do you "speak for"?
This article isn't even about self-serving decisions that may benefit politicians down the road...it's about politicians who are actively using politician-privy inside information for short term profit at the expense of their constituents. But hey let's keep crying about orange man bad!
This is getting tired.
If you are interested in his cronies’ self dealings just look it up.
They did all of these things and more but also did them more explicitly. Which is a bit more honest in a way I guess?
But the worst part about 2017-2020 was the way he cozied up to enemies of democracy, undermined democracy himself and made a point of sowing and igniting division.
Back to the article, this behaviour is despicable and should be punished for everyone, D or R.
> just look it up. They did all of these things and more
Can you provide a single example with a source that proves this? And please provide an example of how he "undermined democracy". Sounds like you watch a lot of CNN.
I agree it should be punished equally not depending on D or R.
Sure, here’s one for the former (link below) and for the second you might remember the refusal to accept the election results and months of egging his supporters on, culminating in an attack on the US Capitol and the deaths of 4 or more people.
> It, including these trades, is working as intended.
You can view the US in a lot of cynical ways but it was not created as a vehicle to allow the wealthy to continue to gain wealth at the expense of the poor. Insider trading between congressmen using their posts to fleece the public was never an intent of the government.
That is precisely the reason that Madison and his collaborators wrote the constitution (with debates kept secret from the public). The nation already had popular rule and a federal organization in 1781. The problem for the rich was that state legislatures kept helping out the majority of their voters, changing various rules about repayment of debts and so on. The constitution put an end to all that, as it was intended to do.
It was at least created for them to at least preserve their wealth. In the debates leading up the creation of the Senate, here is a typical argument:
"...our government ought to secure the permanent interests of the country against innovation. Landholders ought to have a share in the government, to support these invaluable interests and to balance and check the other. They ought to be so constituted as to protect the minority of the opulent against the majority. The senate, therefore, ought to be this body; and to answer these purposes, they ought to have permanency and stability. Various have been the propositions; but my opinion is, the longer they continue in office, the better will these views be answered"
I would like more oversight here but I don't know if these are great examples. I do (without evidence) believe a lot of these people use insider information.
Pelosi's husband has been very bullish for a long time on Tesla, Apple & tech in general I do believe.
Gottheimer did what I think is a Bull Call spread which means in February, after a crazy run up in market prices in January, he bet that MSFT would go up a little more but would eventually come back down or at least trade sideways & not go over $160 by 6/18. If he sold his ITM calls before March or in early March, he probably did good. If he held on to them until closer to the 19th, he might have got crushed. This doesn't say when he sold. A lot of people argued stocks were overbought after January. Also, if he owns a large share of MSFT it's common to sell calls when you want to keep your shares but think the price is at the top or there is a lot of volatility that will soon go away. It's a way to earn some income without selling.
- None of this is financial advice & I'm fairly ignorant on this topic.
Well, when the order of events is "A committee which Pelosi is member of is discussing the large contract on the VR helmets for the military — Pelosi's husband buys MSFT — The committee anounces that the contract goes to MSFT — MSFT stock rises", and the pattern keeps repeating, it is evidence, albeit circumstantial.
Seriously, I am very serious about preventing conflicts of interest and insider trading. But Microsoft is a terrible example, they are extremely diversified. The contract was announced 3/31 and it's obvious that it had no particular impact on its share price since that date when looking at its peers: https://www.google.com/finance/quote/MSFT:NASDAQ?comparison=...
It went from approximately $235 to $250, which is about 6%. On calls, especially short-dated ones, that can easily be a 40-50% gain. I've got a number of different MSFT LEAPS in my portfolio and they all went up 15%+ on that news.
That seems like the definition of material, non-public information. In the past I don’t think Congress was bound to the same trading rules as the general public (blech), but last I checked, Mr. Pelosi is not in Congress.
Congress is bound by the same rules as the general public, they just aren't legally insiders.
Insider trading requires not only material, non-public but also some kind of duty of confidentiality to the company you are trading.
Congress doesn't have that type of relationship, so they are not insiders. Their spouses aren't either.
There are some additional rules that apply to people who gain knowledge in an official capacity[1], but these were enacted fairly recently and haven't been effective at keeping Congress from trading using the non-public information that they receive.
This falls under misappropriation which does not require the reader to any relationship to the company being traded, only material, non-public information.
Not really, they aren't insiders because when courts interpreted the rather vague laws against fraud in the context of securities trading, they didn't interpret Congress trading based on knowledge received in their job as fraud.
>Pelosi's husband has been very bullish for a long time on Tesla, Apple & tech in general I do believe.
I'm curious where you are reading about Paul Pelosi's stock picks. Regardless, so what? He has no business owning and/or trading shares of companies the person he shares a bed with has influence over.
His name comes up often enough in Finance News Headlines. He makes large transactions. Nancy's office has to file those, so they make great headlines. A quick search should give you thousands of them.
I have no position on your 2nd sentence. I agree in philosophy but acknowledge the details are complicated.
Even if you take a pretty hard-line attitude about members of Congress being prohibited from doing things like trading their own portfolios, it's hard to make a cogent argument that Paul Pelosi, who is by all measures a private citizen, should be restricted from trading specific stocks.
"it's hard to make a cogent argument that Paul Pelosi, who is by all measures a private citizen, should be restricted from trading specific stocks"
No it's not. If you grant that Nancy Pelosi should be treated similarly to a corporate insider, then it is pretty obvious that her spouse should be treated like an insider's would be.
unusualwhales are incentivised to talk their own book so it's safe to assume they've cherry picked these examples.
The honest way to see if politicians get an outsized return from this type of trading is to run a backtest, with appropriate hedges where you buy whenever anyone buys and sell whenever anyone sells and hold for a medium amount of time (3-6 weeks seems reasonable). unusualwhales know this so the fact that this sort of analysis is missing is telling. In particular, note how they provide stats for what the trading trends are, but not for the outsized performance.
The charts at the end of the article are a lot less impressive and they don't obviously look better than random.
Re. the Gottheimer trading; if one is to believe the reports of his net worth based on public records [1][2], he supposedly almost tripled his wealth in just one year. That seems quite unusual.
The fact that he appears to trade mostly $MSFT while also being a former MSFT Executive and seems to be extremely accurate in his options trading of that $MSFT, only really adds to the extreme suspiciousness.
Is there no entity that even just tries to keep tabs on or possibly investigates these people, let alone charge them with crimes where appropriate? It seems that where there is smoke … and fire … there may actually be fire.
> Is there no entity that even just tries to keep tabs on or possibly investigates these people, let alone charge them with crimes where appropriate?
well there's this thing called the IRS that seems to spend most of their time auditing random citizens when the numbers they submit on their tax forms doesn't match the numbers the IRS already calculated on their side. maybe we could streamline that absolutely ridiculous process & their efforts could be used elsewhere
This argument comes up a lot and it's an astounding oversimplification and gross misunderstanding of how taxes work in the US. The IRS does not know how much you owe until you file. They may have a rough approximation, but they absolutely don't know anything close enough to be able to bill you.
If you only have W2 income and take the standard deduction, 99% of what you need to know they know. Only changes like new address, dependent, etc would really be relevant.
The SEC should be investigating things like this, and do actually bring a lot of enforcement action against various companies and individuals, but I suspect it might be a career-limiting move to target a politician for all but the most gross of abuses.
3x or 5x of your wealth if you correctly time a global crisis is not unheard of. Even in boring stuff like real state. With options and tech it probably happened last year to a substantial amount of people.
I don't agree, I think that tax load after 100 million (or some similar ridiculous figure) should be ludicrously high. Taxes never stopped rich people from wanting to become richer, lets just make it a bit harder and put that money back into circulation.
What kind of attitude is that? If you have savings, one seeks a return on said savings by investing them. That's perfectly normal and rational behavior at all wealth levels.
It is not rational once you have enough money for you and those you care about to be infinitely comfortable for the rest of your lives.
Say you have $100,000 in the bank, and you want to spend $10,000. What's the best use of that money? For a normal self-interested person, a rational use would be to invest in whatever will give the largest return, in order to have enough money for living expenses, retirement, children, whatever.
Now, say you have $100 million, and you want to spend $10 million. What's the best use of that money? Seeking a purely financial return is completely pointless. It will have absolutely no impact on your life or future, or those of the people you care about. So as a person with a normal amount of self-interest who also cares about other things in the world, the most rational behavior would be to donate it to a cause you care about, or start some purposeful organization, or anything that will have a positive impact on something or someone you value. At this level of wealth, just making more money has no positive impact on anybody, even yourself.
I guess it's possible that Pelosi is saving up in order to start a SpaceX competitor or buy an NBA team or something once she leaves Congress, but she's 81 so that seems unlikely.
> At this level of wealth, just making more money has no positive impact on anybody, even yourself.
except that having capital makes it easier to gain more capital, so you could very well end up with more impact by aggressively investing for a few years before donating.
Ok, say you invest that $10 million and a year later it's grown to $12 million. That's a decent return, but what was the opportunity cost of investing in Microsoft instead of, I don't know, funding 100 people on GoFundMe who are going to die if they can't afford surgery? The US government uses ~$10 million as the value of a human life when they analyze the cost/benefit of various policies. And it's a compounding investment - a dead person contributes nothing to society, but a living one might contribute quite a bit. That's just one example though, you could make an argument for any number of worthwhile uses for that money. Even something like venture capital or political organizing, which aren't exactly selfless philanthropic endeavors.
And again, I'm talking about 10% of what's in the bank. You could donate $10 million, invest $60 million, and still have an absurd amount left to buy a few houses or whatever you want for yourself. All while risking nothing, if you hold onto $10 million or so to secure your future.
My argument is that there's some threshold after which you have enough money to support yourself, and to invest to maintain your way of life, and to do something purposeful with the rest. And I think that threshold is below $100 million. I agree that it takes money to make money, but as you say, after "a few years" of investing, you do something with it. When does that happen? Do you need to hit a billion first?
You seem to have a fundamental misapprehension of capitalism.
If you invest your capital, it's not being hoarded in a money bank like Scrooge McDuck. It's being put to use by the companies and institutions you invest in to provide products and services.
Now I'm all for donating to charity, and it's a much better option than leaving massive wealth to your offspring, in my opinion.
But investing your money is totally rational at any wealth level and it's good for society, and necessary for capitalism to function.
If I buy some MSFT shares on the market, is my money being put to use by Microsoft? I see this kind of sentiment all the time but it seems to rely on a VC model of investment where you’re buying shares from the company/founders. I am dumb about this stuff so please someone correct me.
What happens is your money goes to whoever owned the shares and they use it somehow. That same money could theoretically be used to buy shares infinitely, except for fees, and the company would see none of it.
The effect on the company though is demand will drive the price up. Shareholders like higher prices so tend to reward CEOs who get them. This (hopefully) leads to an efficient company where they try their best so shares go up in value due to present or expected future performance which is good for the economy on the whole compared to having a bunch of inefficient companies.
It's true for shares at issuing. After that, typically, the company sees no funds from shares changing hands. Folks buy shares because they want dividends or capital appreciation. A few to show up at AGMs. But after the shares change hands once, the idea that the Noble Capitalist Heroes Of Galt's Gulch make the world turn by purchasing shares is false.
Companies can issue shares down the road, and they do for compensation, so people buying shares and pushing the stock price up is actually an ongoing assist. But, yes it's complex.
I agree with everything you say. My argument is not that investment is bad, but that as your wealth increases, your interest in getting even richer should decrease, and your interest in getting non-financial returns should increase.
If you have $100 million dollars, and you're investing in the stock market purely because that's the way to get the highest financial return, that is not rational, unless money is literally the only thing you care about. Presumably there's something else you care about, like the environment, or some political movement, or eradicating malaria, in which case investing all of your money in making more money is not the best choice. You probably still want to invest some of it, to maintain your lifestyle and maintain enough cash to use for the stuff you really care about.
This is the crux of the issue. If you have $100 million and you can't think of a single worthwhile use for any of it besides making more money, that's either a literally unbelievable lack of imagination, or incredibly cruel. It is so, so easy to do a huge amount of good with that much money. It's not easy to figure out how to do the most amount of good possible, that's probably an unsolvable problem, but it's not necessary.
I understand that investing in the stock market is supporting the economy and increasing liquidity and potentially helping a company and that's all good, but it is laughably easy to think of something better, if you don't need to worry about a financial return.
I'm all for people donating money, but they don't have to. It's theirs and they get to do what they want with it, without the burkamans of the world guilt tripping them. If they want to invest their savings until such a time as they have something better to do with it, more power to them.
After all, you wouldn't want me telling you how to spend your money.
I think a reasonable amount of guilt tripping is healthy for a society. Obviously hoarding money shouldn't be illegal, but it should feel like anti-social behavior that most people disapprove of. It's like signing up to be an organ donor, or getting vaccinated, or being friendly to your neighbors. You shouldn't be forced into anything, but you should be socially pressured to make the choice that benefits your community.
Something of it smacks of hypocrisy. I think you should be guilted into donating 5% of your wealth by that reasoning. Yeah you don't have 100M, but just like them a 5% donation won't materially affect your quality of life. How do you feel about that? Do you still feel it's anti social behavior not to do that?
Yes, I'm doing pretty well as an American software engineer, I should be pressured to donate some of my wealth (and I do). It's not a flat rate for everyone though, it's like tax brackets - as your wealth increases, you're expected to contribute a higher percentage back to the community. In a perfect world, taxes would be enough, and charity would be unnecessary because we'd all agree about how to fix all the problems in the world and just set tax rates accordingly. Obviously this is impossible, but in a slightly less perfect but maybe achievable world, we'd use taxes to cover issues with really broad agreement, and more fluid social norms to encourage charitable giving to cover the rest. In my view, there's not much moral difference between technically legal tax avoidance (like offshore accounts or tax inversion) and hoarding excessive wealth while people in your community are dying because of poverty.
> It's being put to use by the companies and institutions you invest in to provide products and services.
Only if you pretend that all stock trades happen when new stock is issued. That definitely isn't the case. As far as I understand there is a lot of trading between portfolios, where the company that originally issued the stock doesn't necessarily benefit except by increasing the value for future stock issues.
You've got a fringe position there. If you want to defend it, be my guest. I believe it's pretty obviously a given. You're basically picking a fight with capitalism which, while far from perfect, it's the best system we've tried to date.
That's a straw-man. I've said nothing questioning capitalism. The stock market isn't a necessary component of capitalism any more than subprime lending is.
The cost of the stock market is clear. The stock market causes and amplifies inequality. This isn't controversial.
But I find proponents of the stock market have trouble defending it, when asked to really be clear about the benefit to society -- to people.
> That's a straw-man. I've said nothing questioning capitalism. The stock market isn't a necessary component of capitalism any more than subprime lending is.
The stock market, no, but the ability to invest/allocate capital is quite fundamental to capitalism. The stock market is merely one incantation of that. Let's take your criticism as only pertaining to the stock market.
> The cost of the stock market is clear. The stock market causes and amplifies inequality. This isn't controversial.
I'm not going to give you that one. The stock market enables the public to invest in these companies. That's why they're called public companies.
If you ditch it, suddenly only wealthy venture capitalists can do that. This has been happening more and more with companies starting private longer and longer thanks to abundant private capital that doesn't bring the onerous regulations of being a public company. Unfortunately that seems to be increasing inequality, as the public has been cut out of these kinds of riskier but high growth investments.
I'm sure there is a better way of doing it, but it isn't as cut and dried as you suggest.
Let me strengthen my position by adding that it is also moral and ethical to seek a return by investing, providing you make reasonably ethical investments. Maybe not in the coal industry or whale meat industry - but any number of things can be perfectly ethical and even beneficial to society at large.
It is not immoral or unethical for somebody to have or earn more money than another. All people try to increase their wealth however they can. At lower income levels that is very difficult but the behavior is the same.
How much money is enough if you already have $100M and to gain more, you have to manipulate and cheat?
But even without changing the question, $100M invested in a very low risk manner will generate considerable cash flow (if you regularly take some profits). So without even spending your "savings", you can live very comfortably.
However, a special thing happens when you are high net worth. You suddenly have a lot of lenders begging to loan you money at very low interest rates. They need a place to put money, and they know you have assets to cover any loan they might give you. So you, the wealthy individual with $100M in assets, CAN still go buy nice stuff even if your cash flow from your investments isn't huge.
Honestly, unless you just need to show people how much money you can drop because you're so rich you don't care, you don't actually have to spend any of your money to live bigly.
> How much money is enough if you already have $100M and to gain more, you have to manipulate and cheat?
Yeah, that's not a good at any wealth level.
> But even without changing the question, $100M invested in a very low risk manner will generate considerable cash flow (if you regularly take some profits)
Sure. But individual risk appetites vary and at that wealth level you can afford to diversify like crazy - and should in my opinion. I'm not sure what that had to do with anything.
Manipulation and cheating is wrong regardless of the amount of money. Tossing the monetary value just aims to inflame passions and try to make an emotional appeal.
Well, according to the US supreme court, money is speech - so more money more voice. As a concrete example, trump backed his own campaign to the tune of ~$66mil. Without it, I'm not sure he would have gotten as far as he did.
(I'm not endorsing this, I'm just saying these are the rules of the game that's been set up)
And to answer your second question - not quick enough for the public to act on it.
Last I checked couple years ago, she was worth $140 million. She's worth even more now.
I am not against non politician people having tons of money. I am against politicians getting rich using insider trading. And the same politicians also accusing their political opponents of doing the very thing they are doing themselves - even more. Hypocrisy and double standards is what makes me disgusted.
There's not a single profession I can think of where someone would gladly be working when they are 80 years old. House and Senate needs term limits. 8 years max. No one should be allowed to become a life long politician and get rich off of it.
But unfortunately, what we want is different from what we get. There's no way these politicians will pass bills to limit their own terms. These people convince the ordinary people that they are all moral and care about them. But meanwhile they are getting rich off of public's trust in them.
Casually making millions, almost certainly illegally, while her district suffers as one of the nation’s most severe when it comes to income inequality. [0]
Every day I become more and more convinced that all politicians are basically the same - chasing self-interests, power, and prestige.
I think this is just one way in which many politicians are the same. This does not mean that they share all the same concerns or have the same plans for the country.
California has high inequality compared to other states because the rich people don’t want to live in those other states. It’s not like people are rushing to move to Mississippi or West Virginia.
It’s easy to have low inequality when everyone is very poor like West Virginia.
Obviously having access to insider information and trading based on that information is not okay, but the specific trade called out here does not sound like the sort of thing a person would do if they had information about future movement of the underlying $MSFT.
They traded deep ITM calls 4 months out for deeper ITM calls 1 month out. My guess is that this particular trade is part of a risk management strategy, not an adjustment based on insider information.
I don't know if specific trades are sketchy or legit, but I do think there should be some sort of log of net worth when you join congress, senate, houses of parliament etc and politicians be expected to explain any large gains over their time in office.
My employer has 105b plans available if you want to trade outside of trading windows. I think we should have something like that for politicians. Insider trading would be less of an issue if politicians and spouses were required to publicly announce trades 30-90 days before they were made. I don't think that would impact long term trading strategies, and I think it's reasonable to ask politicians to give up short term trading.
I know that in the front office in certain investment banks, you're not allowed to trade single stocks for your own account. You can only trade funds. I think a similar rule here might work.
I think the insider trading aspects of this are the lesser concern. There's substantial debate over whether insider trading is actually a net negative for society or whether it makes sense to regulate, surprisingly. [1]
The primary concern here is whether or not this influences their decisions when it comes to governing, whether they choose the option that is most profitable rather than best for their country.
I think the insider trading laws don't require motive - just that they had private information or used their position of influence and that they benefited from a related trade. The rules for executives at companies usually requires them to file any trade plans related to their company stock prior to actually making the trade, which would at least prevent the short term plays like the Pelosi example. Even tech people at trading companies are subject to restrictions in what they can trade, even if they aren't looking at the financial data.
Stupid insider trading, where someone gets a tip and then trades on it, is well enforced. It's easy to catch ex post facto and the people doing it are generally of the mind that everyone is insider trading and so they're unlikely to get caught.
The problem is in the grey areas. Take the Pelosi example. The material nonpublic information was her personal policy position. Assuming she acted purely venally, are your own intentions insider information? If I know I'm going to get Chipotle for lunch tomorrow, is it insider trading to buy Chipotle shares?
If, on the other hand, her husband took a conversation he had with her about policy and then traded on it, that would be insider trading. Unless they did it over text message, however, the odds of proving it are zilch.
Once she announces it in the media, wouldn't it be a professional policy opinion? CEOs are similar. They can believe what they want, but what they say to the media can be punished (like Elon was). The real sticking point is how is she of one opinion then flip to the complete opposite the next day without giving a reason. If they have to report their intended trades then it could avoid this short term play.
Spouses and household members are held to the same restrictions as the regulated individual, regardless of the conversation or not. The only reason it's hard to prove is because they are in a position of power. The SEC would jump on any normal people doing the same thing.
Regarding the Pelosi example, it's even worse than what was suggested above. The TSLA trade was placed a few days before Biden came out and said they planned to buy EVs for government vehicles, which was an announcement that directly caused TSLA to spike up the second it was broadcast to the market.
Again though there's plausible deniability, as you say. It needs to just be outright banned.
I don't know about the Gottheimer example, but their Pelosi example seems pretty far fetched.
First of all, Congress passed a stimulus bill on Dec 21, the day before her husband bought those calls. Any 5% gain over the next couple of days or so is for more likely in response to that, and in anticipation of Trump signing the bill soon, than it due to Pelosi changing her mind about some possible future stimulus that hasn't even started being negotiated yet.
Second, the 5% "rally" for AAPL only lasted a week. TSLA's rise lasted longer, but it was rising before this. The article doesn't say anything about whether or not they actually exercised their options to buy the stock, and then sold it to actually profit. If they didn't, then this "rally" had no real effect on them.
Third, looking at other tech stocks, GOOG pretty much did nothing around or for a while after Dec 22. AMZN fell for a day or two, spiked up, came back to around what it was. FB was kind of like AMZN, but the spike was smaller and the fall was deeper. Looking beyond tech stocks, the Dow and the S&P 500 don't show anything happening around the time. Most things continued the trends they had been on before.
That suggests that Pelosi's change of heart about possible future stimulus bills didn't have much effect on most stocks. So why did they buy AAPL and TSLA? Even if they thought there would be an effect and wanted to exploit it, buying TSLA to do so makes no sense. AAPL makes a little more sense, but not much. AMZN or some other company whose products people would actually likely spend stimulus money on would make more sense.
I'm curious if any of this falls under the definition of insider trading. It should, but I think it doesn't and which is why SEC doesn't get involved in these.
For a long time, Congress had an exemption to insider trading. They no longer do, but, insider trading still requires material non-public information about the company in question -- and Congressional acts are the most public thing possible. Betting that a company's stock will go up (or down) and then making it happen after you make the bet isn't insider trading, it's activist investing, and is totally legal.
Maybe it's legal, but it should absolutely not be. There's too much risk that a legislator's personal interest will run counter to the interests of the public, and the system should have safeguards against this.
Unfortunately that risk is very much in play even without stock trading. Politicians often appear to be working purely to stay in office and gain whatever side benefits they can along the way, and to establish a very lucrative lobby landing after they leave office.
It is all practically very corrupt, viewed from most angles. The few well-meaning politicians either don't get elected or don't stay in office, because it costs too much to get there and stay there (funding); so to get there and stay there, you have to play the game. And playing the game means ensuring your wealthy donors get what they want from you in terms of legislation.
Yeah that's all fine, but you can still work to outlaw the most blatant conflicts of interest. Government isn't perfect anywhere, but for instance in northern europe they're doing at least a tiny bit better on that front.
But if they bet first, wouldn’t that makes them unfit for making decisions on where the contract should go? Shouldn’t the government official be excused from this decision making process if they have a personal interest in one of the candidate?
>Congressional acts are the most public thing possible
Not when said action occurs a week before the Congressional act is announced. Is this HN thread flooded with bots or something? Have never seen this level of sympathy for politicians.
I'm pretty sure they can't be charged with insider trading for some loophole reason. It's 100% insider trading though. US politicians and their families shouldn't be allowed to buy/sell any stocks as a condition of public office. And they shouldn't be able to accept revolving door money after leaving office as well.
Please correct me, but here's a provocative hypothesis I spent three minutes thinking through. Couldn't you say that speculating with insider information on public markets can be a way for public officials to make a lot of money without marrying themselves to any particular interests? In that case, couldn't it be potentially a mechanism we can exploit for good?
Disclaimer: not American, no strong opinion on these people.
Being a representative isn't supposed to be a "get rich quick" scheme. They already make a lot of money and IMO if they're going to invest in stocks they should play by the same rules as everybody else.
Edit: On second thought, considering how much they can influence stock prices, maybe they should have stricter insider information regulations. It's a huge conflict of interest.
Personally I think that the conflict of interest posed by stock holding lawmakers is bigger than the advantages they gain from trading on information that only they are privy to.
For example will a lawmaker holding a large portion of their wealth in Apple shares want to introduce legislation that forces Apple to allow alternative app stores (costing Apple the 15%-30% cut of all the app store sales)?
In most situations this is called insider trading and is considered unfair in public markets since the trades of insiders may be concealed, like through a family member.
Within an organization making a decision that advantages oneself is unethical since the purpose of the most organizations is not to fulfill the personal interests of its employees.
It would make some sense to convert all property holdings of a government employee to financial instruments related to the health of the government such as treasury notes. That way their personal interests are at least aligned with those of the government. To the degree that the instruments measure aspects of the government that are not totally aligned with the governed is a problem however.
Sure, speculating on insider information on public markets is a great way for anyone to make a lot of money. It's also highly illegal, although there does seem to be some fairly prominent views that allowing insider trading would actually help get relevant information priced into the public markets.
But even if you're one of those proponents of insider trading, surely this is clearly different and worse than that, because prominent politicians surely have some power to influence winners and losers.
Well, the laws around insider trading and similar practices changed throughout history. Many things used to be considered okay, look up Joseph P. Kennedy's biography for example.
You are right that if the officials actually cared about companies, it would not make sense. I was thinking more like hedge fund-like cold speculation. As people guessed correctly, the point is to make the job very appealing but with little ties to powerful interests. Of course is not a serious scheme, but I'm amused by the concept I guess.
Your hypothesis assumes that all elected officials must engage in some form of bribery or pay for play. In an ideal world we’d find leaders who put the interests of the country ahead of their finances.
Or alternatively we can just pay them a lot more since they'll make money anyway, disallow them from earning money in other ways and at least have their profits have no additional negative effects.
Not that I expect people would be comfortable paying politicians more (see how many complain about e.g. CEO pay) so I guess we are stuck with incentives for corruption instead.
I don't think we need to PAY them more to eliminate corruption - I think we need to change how campaigns are financed. Needing to raise millions every few years to keep your job makes you beholding to whoever has the money
This is not true. It’s very odd to see the kind of right-wing conspiracies based on outright fabrications spread on HN as literal truths. Here is an article from December 22 were Pelosi is calling for more stimulus:
Edit: There are outright lies in the source article. Sad day for HN that the lies are getting so much traction and fact checking with 1st hand sources is getting downvoted.
I also thought this was odd. This site alleges malfeasance based purely on analysis of data but then alludes to a person's thoughts on specific dates without citation.
I also found this article on 2020/12/21 where Pelosi says she wanted more stimulus, but the $600 checks were significant.[1] So it seems all the more unlikely that she said she was against further stimulus at any point on the 22nd.
People are confused about this because Pelosi rejected the stimulus in October, prior to the election. She didn't accept until December, post election.
That’s not what the business insider linked in the tweet says. It says she described the White House plan as “insufficient” meaning there wasn’t enough stimulus in it. How can criticizing a bill for not having enough stimulus mean you are against stimulus?
The House had passed the HEROES act for additional stimulus in May 2020. The Republican senate refused to even put it up for a vote. She was always for passing of the HEROES act even during this October - December period. She was always pro stimulus.
Yeah, I think it's really weird. Maybe a way to help give the bills "spin" and gain support. Honestly, though, I think there are bigger things to worry about.
Do you have a specific article with a first hand source saying she was against stimulus? Because her continued and unwavering support for the HEROES act suggest she was always pro-stimulus.
The top article in your Google search (lol) link is the Sun. A British tabloid with the same owner as Fox News.
Also calling me “r****” is definitely against HN civility rules.
You know the entire establishment media is owned by a select few people right?
She was very clearly against stimulus before election because she didn't want to give a win to her political opponent.
We can say whatever we want about her political opponent but he had made it very clear on Twitter that he would instantly sign a stimulus only bill without pork if it's brought to him. Pelosi on the other hand played politics and blamed it on her political opponent as she didn't want cheques with his name going out before elections.
Here's her interview with CNN's Wolf Blitzer criticized by the left:
> House Speaker Nancy Pelosi ripped into the White House's latest $1.8 trillion coronavirus relief offer during a combative interview with CNN's Wolf Blitzer, accusing President Trump of only wanting to send out a second round of stimulus checks to juice the economy and boost his election odds.
> The Trump administration's proposal -- its largest yet -- drew criticism from both Republicans and Democrats, dimming the odds of another round of emergency aid before the Nov. 3 election. It was expected to include a second round of direct payments of up to $1,200 for adults and $1,000 for children; expanded unemployment benefits at $400 per week and additional funding for state and local governments.
> Blitzer pressed Pelosi about her decision to reject the deal, even as some Democrats, including former presidential candidate Andrew Yang and California Rep. Ro Khanna, urged her to accept the offer. (Khanna tweeted that Pelosi should "make a deal & put the ball in McConnell court").
The criticism linked in those articles was there wasn’t enough stimulus. She passed the massive stimulus bill of the HEROES Act that the Republicans senate refused to even put up for a vote. She never changes her opinion on more stimulus. She was never against stimulus. She criticized a particular Trump White House plan as not having enough stimulus; a Trump plan that Senate Republicans were against.
Do you have a direct quote from her that says she doesn’t want stimulus compared to the avalanche of quotes supporting more stimulus?
You seemed to ignore all the sources in my comment.
> “If I am sent a Stand Alone Bill for Stimulus Checks ($1,200), they will go out to our great people IMMEDIATELY. I am ready to sign right now. Are you listening Nancy?” Trump tweeted.
> House Speaker Nancy Pelosi ripped into the White House's latest $1.8 trillion coronavirus relief offer during a combative interview with CNN's Wolf Blitzer, accusing President Trump of only wanting to send out a second round of stimulus checks to juice the economy and boost his election odds.
> The Trump administration's proposal -- its largest yet -- drew criticism from both Republicans and Democrats, dimming the odds of another round of emergency aid before the Nov. 3 election. It was expected to include a second round of direct payments of up to $1,200 for adults and $1,000 for children; expanded unemployment benefits at $400 per week and additional funding for state and local governments.
So clearly she didn't want any stimulus before elections. Else she would have gotten the $1200 stand alone bill done and signed instantly.
Once the elections were over:
> Trump calls for $2,000 stimulus checks as $600 payments start being deposited
> Pelosi says $600 stimulus payment after 8 months is SIGNIFICANT
> We also have in the legislation, uh, direct payments which were not in the Republican bill, to America's working families. I would have liked them to be bigger, but they are significant and they will be going out soon."
This is obviously a lie since her political opponent had tweeted several times "If I am sent a Stand Alone Bill for Stimulus Checks ($1,200), they will go out to our great people IMMEDIATELY. I am ready to sign right now. Are you listening Nancy?" and "$2,000 stimulus checks"
Is $600 more significant than $1200 or $2000? Is that "not having enough stimulus"?
And now her party holds all 3 - house, senate and presidency and yet there's no $2000 cheques. If her political opponent was willing to give $1200 and then $2000 and yet her own party hasn't gotten that done, then who's worse?
None of those are quotes from Pelosi where she is against stimulus.
Here is an actual quote from her which is a direct response to a Trump tweet:
“Republicans repeatedly refused to say what amount the President wanted for direct checks. At last, the President has agreed to $2,000 — Democrats are ready to bring this to the Floor this week by unanimous consent. Let’s do it!”
It's even more odd to see the, "if you disagree you're alt-right/ a Nazi" mentality on HN.
You believing that "right-wing conspiracies" automatically means ties to "alt-right/Nazis", I think this says more about your personal biases than the person you are responding to.
>Her husband buys deep ITM TSLA and AAPL calls that day.
Stupid question: if you were expecting an upswing in a stock, wouldn't you get the most returns from an out of the money option? For a deep ITM you're paying the same as the underlying stock plus a tiny premium -- you might as well just buy the stock.
It's not stupid. I'm questioning whether the original person understands what a deep itm call means. If you knew a stocks gonna move, you buy at the money or out of the money. Never would you buy _deep_ in the money. Makes no sense.
A large swing increases the IV which increases the premium (since the stock is now more likely to swing back down). Also decreases the risk in case the trade moves against you.
If the bet is wrong, OTM options expire worthless. ITM options give you less risk, but for a premium (you buy fewer contracts with the same amount of money). But still with more leverage than outright buying the stock.
This is captured in the concept of Delta one of the “greeks” which is a parameter in the black scholes equation and solution that tries to measure the pricing movement of the option relative to the price movement of the stock. Owning stock has a delta of 1. ITM options have a delta closer to 1 but not exactly 1, OTM options have a delta closer to 0, but not exactly 0. ATM options of a delta around .5.
An insider trade like this isn't about managing risk and things expiring worthless, it's about maximizing expected value while not making it too sus.
If you bought a deep itm call, it would behave almost exactly like owning a share. The stock goes up 5% , your call goes up 5% + 1% let's say for the increased iv.
If you felt like there was a 75% chance it would go up 5% and a 25% chance it goes flat or down, then your best expected value would be buying a otm call. The math would look something like ev= .75 * 400% + .25 * -100%
And even then, nobody holds an option that went the wrong way to 0, so the -100% term would be less as well.
I don’t think it was an insider trade. But to use the articles example, Microsoft is so large and diversified that the headset contract news might not swing the stock price. Especially if there is broader negative market news.
Fair enough, but then if you’re having to hedge that much against downside risk, it doesn’t feel like insider trading. The whole problem with insider trading is that have special knowledge of which way it’s going to go. At the point where you’re having to protect against the possibility of being so wrong, that doesn’t feel like acting on insider knowledge, and it’s more like “interested outsider” trading.
hah! I am sympathetic -- the U.S. corruption is definitely more impactful to the world, and on a much greater scale. But it is also more covert and _usually_ doesn't creep into the level of person to person bribery in everyday interactions (IME).
Is it possible to see how much has each member of congress profited/lost doing trading over time?
We can build a tool like this right? As all the data in public?
Yep. The very people we elected and who are supposed to answer to us are fleecing the American public. This needs to be investigated further by the SEC.
To provide an additional example. Unelected ex-senator Kelly Loeffler's husband is chairman of the New York Stock Exchange. She made trades using non-public information. How is this sort of conflict of interest legal?
But this is so cynical. Not to be naive, but if we can't at least start from the framework that the government should serve primarily the interests of the people and be outraged when it doesn't, then the American project is pretty much over
But Washington also shocked the ruling elites of the world by stepping down when he did. Clearly, he was cut of a different cloth than other largest landowners in their respective countries.
Right, and in the very beginning, only some single-digit percent of the people living in the US were eligible to vote. Women, slaves, non-landowners, etc. did not have the right to vote.
The idea that the US was originally founded "by the people, for the people" is not at all what happened. I guess we could say that the government they created was progressive for its time, at least.
> Right, and in the very beginning, only some single-digit percent of the people living in the US were eligible to vote. Women, slaves, non-landowners, etc. did not have the right to vote.
Slaves would not have been a large proportion of the country as a whole--about 20% at their height. While the early US did require landownership for adult free males to vote, the US also had unusually high landownership rates. It's estimated that ~60% of free adult males had the right to vote (contemporary Britain had about 15-20% of free adult males having that same rate). So ultimately you end up with about 25% of the current franchise rate, or somewhere in the mid-high teens after taking into account the existence of children who still cannot vote.
The US was more democratic after the revolution than before. Since then the trend has been in that direction, largely because those kinds of principles are baked into the constitution.
If you work in private equity, it's the worst. Your company isn't actively trading stock, but you still get banned from options, shorts, and need pre-clearance for every single trade. So you end up long SPY... even if you derive independent utility from actively managing your portfolio.
The law doesn't require this of course, but basically all money managers get their insider trading compliance program from the same 3 outside law firms.
Dec 22 democrats had reached an agreement to provide $600 in stimulus, this was an agreement that had buy in and should have been pushed forward.
Dec 23 Trump announced support for a $2000 stimulus, changing the political calculus, in favor of democrats, who did eventually push through the remaining $1400 in a separate package.
Pelosi's strategic change is not a change that happened in a vacuum. Trump's announcement was all over the news and was the single most important event in the political world that day, not Pelosi's husband buying calls. Contextualizing this event around Pelosi's husband is misleading.
Ok downvote my comment all you want but this is well documented and was less than 6 months ago, and frankly it's surprising that people forgot how impactful this event was. People are still criticizing Biden over the additional check being 1400 instead of 2000.
As a member of Congress she has much better colour on what's about to happen than everyone else. She can basically count up the votes before before anyone else.
I'd rather live in a world where reps are squeaky clean. It's much better than one where we make up some rules where people who come right up to the line end up smelling bad, and then everyone is born complaining about the corruption and enduring it with no recourse.
Ultimately it's a rules vs discretion (aka judgement) question.
Ok yes she did count the votes, determine that this was the highest number that could be negotiated, and then she worked to push the bill forward as she should have. And then the president tweeted out of nowhere which changed things. Trump's unpredictability is well known for anyone who has read the news at least once in the past five years. All of this is above board. What do you want her to do? Forget all of her policy goals and act against all of her stated interests because her husband bought calls the previous day?
I don't know if you remember, but the amount of stimulus remained 600, so Pelosi was on money on what was politically possible. The remaining 1400 only was possible after the slimmest of senate majorities after the Georgia runoffs.
I'd want her to not speculate on the event, it looks bad. The system doesn't just depend on people not cheating, it depends on confidence in the system, judged by people who aren't experts in either trading or politics.
Isn't that completely fake though? Pelosi was pushing stimulus for months. And the negotiations were all very public. Trump and McConnell were holding it up.
Pelosi is a master politician and the pandemic has been a fast moving situation. I could see Pelosi being against the stimulus and then fast switching based on changing currents in the minds of voters.
> Congressman Gottheimer is absolutely an incredible options trader. He’s been selling calls at peaks on $MSFT all 2021, & seemingly buying back the contracts on dips. This in blocks of $250,000 - $5,000,000, which is incredible size given the amount of $MSFT shares he owns. For ex, on 02-12 he sold 500k $MSFT $160 strike expiring 06/18/2021. On that same day, he bought deep ITM calls of $1M-5M at $145 expiring 03/19/2021. The whale caught both of his movements as well.
This is fucking unreal.