Economists have said that failing to raise the debt ceiling could be catastrophic for the U.S. economy, but at least one lawmaker stands to gain financially if the country defaults on its debts.
House Majority Leader Eric Cantor's (R-VA) latest financial disclosure statement indicates that he owns up to $15,000 of ProShares Trust Ultrashort 20+ Year Treasury EFT, a fund that will likely skyrocket as U.S. debt becomes less desirable.
"If the debt ceiling isn’t raised, investors would start fleeing U.S. Treasuries," Motley Fool's Matt Koppenheffer told Salon. "Yields would rise, prices would fall, and the Proshares ETF should do very well. It would spike."
"Cantor's involvement in the fund and negotiations is not ideal," he added. "I don’t think someone negotiating the debt ceiling should be invested in this kind of an ultra-short... It looks pretty bad."
Cantor pulled out of negotiations to raise the debt limit last week saying, "Now is the time for these talks to go into abeyance."
Since that time, ProShares ETF is up 3.3 percent.
"Cantor's office claims the investment is simply part of a balanced portfolio," noted Washington Monthly's Steve Benen. "It's hardly a stretch, though, to suggest prominent officials should avoid these kinds of conflicts of interest."
1 comment:
You mean that Eric Cantor didn't walk out of the budget talks solely out of solidarity to the opppressed hedge fund millionaires, rock stars, oil company CEOs and other wealthy folk who face a small tax increase?
Maybe the rich need to rethink their support for him..http://gefiltebacon.blogspot.com/2011/06/open-letter-to-eric-cantor.html
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