The media’s current hot story – this is written on the road on November 17th – is that various members of Congress and senators traded on insider information. Various commentators were agog at the idea that members of Congress and senators might game the system. Gee, is this behavior by politicians really a surprise?
This flap is because of a new book that wants us essentially to throw all current members of Congress and senators out of office.
Government information and briefings, presented to political leaders by Hank Paulson and Ben Bernanke during the 2007-2008 crisis, did not seem to me to be trading on “insider” information.
By definition, insider stuff relates to information provided by “insiders” at publically-traded companies or by investment professionals, market makers or traders who are members of the securities universe The briefings given by Paulson, Bernanke and others were said to not be about companies and traded securities. They apparently had to do with the economy and what might happen with the market.
The SEC is not in charge of managing information from briefings to Congress about the economy (or, probably not in charge of anything to do with the politicians who run our country).
Do we agree that both houses of Congress are not under the jurisdiction of the SEC (or FINRA)? If so, may we also agree that it is reprehensible that certain members of Congress and senators have taken advantage of advance information to make themselves wealthy (or wealthier) at the expense of citizens?
Clearly embarrassed politicians caught in the crossfire seem to have disingenuous ways of answering questions (Ms. Pelosi, the former speaker, as in one example of this phenomenon, answered questions with kind of “who me?” non-responsive queries, instead of actually saying: “I did it; I got rich by taking advantage, and I’m proud.” Answering hard questions with “who me?” questions seems to be a favorite trick of politicos when they get caught with hands in the cookie jar.)
It seems shameful for politicians to short the market when they know it is going down, down, down, and seems as wrong to accept special share pricing from IPOs and (what Ms. Pelosi is alleged to have done during the MasterCard IPO, a tactic that seems to be SOP for many in Washington).
I don’t want to pick only on Nancy Pelosi. One of the big problems Mr. Gringrich seems to be having is explaining away how he received $1 million for historical advice to Freddie Mac.
Have a great week, and stay away from promoting real insider info, in or out of Washington, OK?