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It's interesting that Senators do better than people in the House of Representatives[1]. It's exactly what you would expect if they were trading on inside knowl
by jquery 7y ago
It's interesting that Senators do better than people in the House of Representatives[1]. It's exactly what you would expect if they were trading on inside knowledge. In my opinion, everyone in Congress should be required to invest in a blind trust, if they want to invest at all. They should not be allowed to pick individual stocks. The temptation to enrich themselves is too great.
[1] https://investmentu.com/why-congressional-insider-trading-legal-profitable/ https://investmentu.com/why-congressional-insider-trading-le...
- cryptonector 7y agoThey should not even get to invest in Treasury notes. Greenspan famously only invested in Treasury notes. (Un)surprisingly t-bills did quite well during his time.
- whatshisface 7y agoThat might bias policy in a way that raised T-bill rates above the best value just so Congress could make more money.
- alkibiades 7y agocorrect me if i’m wrong but i believe the rates are set by the Fed, which is independent in theory.
- jquery 7y agoT-bill returns shoot way up when interest rates are dropped, because now your T-bill is throwing off more money than a new T-bill. This is how a given T-bill mutual fund might go up 50% YoY. The reverse happens when interest rates rise. Even though the Fed is independent in theory, Congress surely has some influence and perhaps insider knowledge.
- cryptonector 7y agoThe inverse. Lower rates -> higher bond value. Bonds work like that. Greenspan held bonds. He worked rates lower. That made the bonds he held more valuable because those were paying higher interest than new bonds. Now mind you, lower interest rates was a very good thing in the 80s. Whether you think lower is better even now, one thing is certain: Greenspan did have a conflict of interest even as he showed how much he didn't.
- nordsieck 7y ago> In my opinion, everyone in Congress should be required to invest in a blind trust, if they want to invest at all. We already have TSP[1]. That seems sufficient. ___ 1. https://www.tsp.gov/index.html https://www.tsp.gov/index.html
- harikb 7y agoCan you explain what TSP is? The link goes to a login page.
- nordsieck 7y agoI guess wikipedia [1] has a better explanation. The short version is, TSP is a small series of extremely well run index funds that are only available to government employees. ___ 1. https://en.wikipedia.org/wiki/Thrift_Savings_Plan https://en.wikipedia.org/wiki/Thrift_Savings_Plan
- jquery 7y agoAt the Congressional level, I’m not sure even TSP is sufficient. They simply wield too much power. It would be better if they didn’t know how their money was invested at all. Seems like a fair trade off for all the power they wield. They shouldn’t know what levers to pull to increase their returns.