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July 12, 2011 at 04:24 AM
Is Eric Cantor the next Bond villain? As talks over the debt ceiling in Washington continue to sputter, the Huffington Post, the left-leaning website run by Washington insider Arianna Huffington, reports Democrats are accusing Rep. Cantor, R-Va., of a conflict of interest related to negotiations over the country’s debt ceiling, claiming he could profit from the country’s default.
The controversy stems from a June 17 Wall Street Journal article that reported the House majority leader “bought $15,000 in shares of ProShares Trust Ultrashort 20+ Year Treasury ETF (TBT) last December, according to his 2009 financial disclosure statement.”
The Journal notes that the exchange-traded fund “takes a short position in long-dated government bonds. In effect, it is a bet against U.S. government bonds—and perhaps on inflation in the future.”
Cantor spokesman Brad Dayspring told AdvisorOne that Cantor stands to lose much more if the government defaults, in part because of his investments in the Thrift Savings Plan portion of his congressional pension. The value of his investment in the ProShares fund is just 1% that of the value of his investment in the G Fund of government bonds, which would decrease significantly if the government defaults.
“The insinuation is so outrageous that it shows a fundamental lack of understanding about how the markets work, how the U.S. economy works,” Dayspring says. “For the conspiracy theorists—they would have to believe that Eric would want to lose hundreds of thousands of dollars to make a few thousands in return.”
