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Betting against The House

by on July 8, 2011

According to the Huffington Post,

House Democrats are circulating a resolution accusing House Majority Leader Eric Cantor (R-Va.) of having a conflict of interest in the debt ceiling debate.

The resolution goes after Cantor’s investment in ProShares Trust Ultrashort 20+ Year Treasury EFT, a fund that “takes a short position in long-dated government bonds.”

The fund is essentially a bet against U.S. government bonds. If the debt ceiling is not raised and the United States defaults on its debts, the value of Cantor’s fund would likely increase.

The article continues,

Cantor spokesman Brad Dayspring said Democrats have it backwards: The Majority Leader stands to lose much more money if Congress does not reach a deal on the debt ceiling and the U.S. defaults.

According to Dayspring, Cantor owns $3,327 in the ProShares trust. His congressional pension in the Thrift Savings Plan, on the other hand, is invested in the G Fund of government bonds and is valued at over $263,000. The value of his investment in the ProShares fund is highly variable and could change significantly if the government defaults.

The resolution is unlikely to be ruled valid by the House parliamentarian, but it could certainly create an uncomfortable bit of political theater when it’s read.

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From → US Politics

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