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As Covid hit, Washington officials traded stocks with exquisite timing

381 points by lxm 4y ago

Relive3778 4y ago
https://archive.ph/Zlhkj https://archive.ph/Zlhkj
ChuckNorris89 4y ago
Wasn't this the biggest wealth transfer in current history?
- Mikeb85 4y ago
  Yup. However not just because of insider trading... Governments around the world mandated that (mostly) small businesses have to close and that blue collar work had to halt (due to relying on in-person interaction), all while pumping up the value of equities and real estate through monetary expansion. Then of course the smart money jumps out leaving the middle class holding the bag.
  - MichaelCollins 4y ago
    > Governments around the world mandated that (mostly) small businesses have to close This was really insidious. Small shops selling [widget] were forced to close because the shop was non-essential. But walmart selling [the exact same widget] was allowed to keep doing business because they also sold groceries and were therefore essential. Could they have forced Walmart to cordon off the non-essential aisles while keeping grocery section open? Could they have taxed walmart more to support the small businesses which were being strangled? Maybe they could have, but of course they didn't.
    - Mikeb85 4y ago
      Not to mention, closing so many stores, forcing curfews, etc... just packed more people into the same store at the same time. Literally the opposite of social distancing. I used to always shop for groceries at 10pm because the store was mostly empty. The officials near me in their infinite wisdom decided stores have to close by 6 so they were packed all day long...
    - fleddr 4y ago
      The businesses you mention, small shops depending on electronic components, continue to suffer. They're last in line in the supply chain shortages, and many are disappearing.
    - jokethrowaway 4y ago
      Governments do whatever they want and then find a PR friendly way of saying things. Of course we're not shutting down all the small businesses who compete with Walmart's! We're saving your life from the flu!
- whimsicalism 4y ago
  > Wasn't this the biggest wealth transfer in current history? What does that even mean? What constitutes a "wealth transfer" as a single category? My guess is "salaries and wages paid" constitutes the largest wealth transfer every year.
  - ChuckNorris89 4y ago
    Paying salaries and wages are not a wealth transfer, but a transaction, i.e. I give 8 hours of my day to my employer and receive cash in exchange. In this context the wealth transfer means devaluing wages and cash while inflating assets. The wage earning class got shafted losing purchasing power while the asset owning class made bank. All through the stroke of a pen, basically overnight.
    - whimsicalism 4y ago
      > In this context the wealth transfer means devaluing wages and cash while inflating assets. How was this done?
  - BlueTemplar 4y ago
    and what is "current history" ?
- jokethrowaway 4y ago
  Of course, never let a good crisis go to waste
greatpostman 4y ago
- shmatt 4y ago
  This is March 2020, When Fauci was on TV claiming 200,000 Americans will die, even though we didn't see those numbers just yet If you chose not to sell at that time, that's on you, but his subordinates believed him according to the article
imwillofficial 4y ago
Hmmm it’s as if those in power aren’t looking out for us, but only their wallets. On both the left and the right…
- Uehreka 4y ago
  I’m not gonna say that no Democrats do this (because it would be clearly untrue, see Nancy Pelosi). But I do think it’s pretty notable that this year a Democrat Senator proposed a bill to rein this in, and got 15 co-sponsors, all of whom were Democrats. As far as I can tell, the bill doesn’t seem to have any culture war or partisan poison pills, so it seems pretty odd that a big chunk of the Democrats are co-sponsors (many more may still vote for it if it comes to a vote) and zero Republicans are. https://www.congress.gov/bill/117th-congress/senate-bill/3494/cosponsors https://www.congress.gov/bill/117th-congress/senate-bill/349...
  - MichaelCollins 4y ago
    I think this is because Democratic voters are more in tune to these issues than Republican voters. Not because Democratic politicians are intrinsically more honest, they're just responding to voter pressure. Get more Republican voters to recognize these issues and you may see more Republican politicians responding in kind. My reason to believe this is Democratic politicians weren't addressing these problems until after Democratic voters started to perceive the problem and apply pressure. The point being, politicians won't regulate themselves spontaneously; their feet need to be held to the fire by voters.
    - jokethrowaway 4y ago
      Conservatives and Libertarian circles consistently make fun of Nancy Pelosi's blatant insider trading so I wouldn't be so sure. It's basically a meme. That said, additional legislation is unlikely to fix the issue, I'm sure Nancy will find another way to bypass any kind of checks coming their way (eg. setting up a company wherever in the world and trading through that). No, legislating this kind of things can just create additional work for the accountants of the powerful but it will never fix the problem. The only real change can come from removing power from a few hands and decentralise, giving it back to the people.
nyc_data_geek1 4y ago
At this point it's pretty much common knowledge that legislators engage in insider trading using nonpublic, oftentimes classified information and intelligence gathered on the taxpayer dime routinely and with no fear of political or legal repercussions. They're not particularly motivated to close this loophole either, for reasons which should be obvious. This should be a much bigger issue, IMO. We the People need to make them understand this blatant self dealing will not be tolerated.
- bamboozled 4y ago
  While you’re at it, lobbying should be completely and utterly outlawed, anyone found taking money for political influence should be handed a hefty jail term or worse. It’s absolute filth.
  - PaulDavisThe1st 4y ago
    OK, so let's say you strongly believe in the mission of CampaignForFooBarForAll. You've raised money for them, you've been on the marches, you've done the phone tree. But you want to do more. Someone suggests you head to DC, and start talking to congresscritters (or their aides) about the message of CampaignForFooBarForAll. You'd love to do this. But you need to pay the rent, and for food, and other regular expenses. Someone in the campaign suggests that they could pay for you to do this for 1 month a year. Shall we send you to jail? Let's suppose that you say "yes". Now consider Jan Lobbier, who works for BigMega Corp. Jan is employed there full time, with various duties. Among them are trips and calls to DC to put the company's position in front of The People Who Matter. This is not Jan's only job, just a part of their job duties. Should Jan go to jail? What you're suggesting would mean that lobbying could only be done by the financially independent (i.e. can lobby because they don't need to work), and that seems like a bad idea for everyone.
    - bamboozled 4y ago
      I'm talking about politicians accepting donation money. Not the lobbyist themselves. If politicians didn't accept "donations" they wouldn't have a role. Politicians receive a salary, that should be enough, if the salary for a congress person isn't high enough, then we can talk about that at the next election, they also might be better at managing the economy and dealing with things like inflation because it would be a harsh reality for them, like it is for everyone else.
TotoHorner 4y ago
Shaming people for purchasing/selling S&P 500 mutual funds is really dumb. Expected better from the WSJ. But yeah, trading individual stocks is highly suspect and should be illegal.
- dereg 4y ago
  If you have the knowledge that Congress does, the S&P 500 is the only instrument you need to do very well for yourself
  - shaburn 4y ago
    Incorrect. Rarely, if ever, does any congress person have any insight or control into detrimental effects that would cause a market wide bear market or correction. If the do, it is even more unlikely the certainty of timing would be an advantage.
    - freeplay 4y ago
      > Rarely, if ever, does any congress person have any insight or control into detrimental effects that would cause a market wide bear market or correction Rarely like a once in a lifetime global pandemic? Control like the ability to force shut downs of businesses across the country?
- eloff 4y ago
  If you're going short or long the entire index on non public information, is that really innocent?
  - deleted 4y ago
    [deleted]
  - xboxnolifes 4y ago
    Shorting? Maybe not. But I would think we want congress to be long on the S&P, even if it also benefits them.
whimsicalism 4y ago
Washington Officials to me means officials in the state of Washington. It's compounded by the fact that most people who live in Washington, DC won't say they are "from Washington." It's exclusively a media phenomena. Is saying "Federal officials" so hard?
- affinepplan 4y ago
  > anyone who lives in Washington, DC won't say they are "from Washington." not true. source: I live there
  - whimsicalism 4y ago
    You say you "live in Washington" without DC suffixed? If so, this is a new trend from transplants - lived there for 20 years and pretty much never heard that from anyone local. And such a usage contributes to the confusion, in my opinion.
    - MichaelCollins 4y ago
      Your experience matches mine, people who live in or near DC say "DC". Sometimes "Washington, DC." Politicians and media say simply "Washington" because it sounds more formal or powerful. It's kind of like how everybody in Pennsylvania says "PA" in casual conversation. It just rolls off the tongue easier.
    - esprehn 4y ago
      I grew up there and live there currently. Everyone I know either says "DC", "the district" or "the city" depending on the context. Never heard anyone say "from Washington" who didn't mean the state.
eej71 4y ago
If you want the money to stop flowing into politicians, you have to be willing to revoke the power they have over your economic liberties.
boomskats 4y ago
When I saw this headline, I assumed it would be an article discussing the military stock trading activity of members of Congress in the week or two prior to to Russia's surprise unilateral decision to invade Ukraine.
- huevosabio 4y ago
  This wouldn't be much surprise though, right? The President had been quite vocal of the imminent invasion, it just that a lot of people decided not to believe it.
  - boomskats 4y ago
    I mean, you could say the same thing about COVID. The fact that the relevant stock stayed flat & didn't skyrocket until the day of the actual invasion suggests that there was some surprise.
  - BlueTemplar 4y ago
    Yeah, some of my family members were sounding the alarm late December already...
akudha 4y ago
lol. For every person doing it blatantly, there must be more people doing it quietly? Like letting a friend of a friend in another state/country trade on the info? Are there ways to track these trades too?
tb_technical 4y ago
"We know that they are lying, they know that they are lying, they even know that we know they are lying, we also know that they know we know they are lying too, they of course know that we certainly know they know we know they are lying too as well, but they are still lying. In our country, the lie has become not just moral category, but the pillar industry of this country." -Aleksandr Solzhenitsyn
adabyron 4y ago
I think the best fix I've heard is that their trades need to be digitally announced immediately (within a few minutes of execution). There are currently fines for not reporting that often get waived. Even if they did make the fines legit, it becomes very difficult to track & indict them for tipping off friends or non-family members unless it's a very large amount worth many millions. Though to counter this argument the article mentions a few cases. North Carolina Sen. Richard Burr was not mentioned but he is still being investigated for what seemed like very obvious trading based on knowledge gained & tipping off family members. Alabama Sen. Tuberville is another good one to watch for trades in my opinion. He's very active. Last year he put out some big tech puts on MSFT that were very OTM (out of the money) for the spring of this year. Rep. Pelosi is overrated a bit in my opinion but is often the joke of these talks. Her husband Paul (a VC) most likely does all the trading & he seems to have just benefitted from using calls on stocks that are already ITM (in the money) & far dated. He's probably not a good person to use if you're working in tech in my opinion as your job & personal knowledge probably make you overweight in tech risks. Anyone mentioning Pelosi should also probably not be considered knowledgeable on this subject since she's 99% of the noise on it & very little substance. - Edit - It should be noted, anyone frequenting investment forums probably made a lot of these Covid trades before the dates many of these senators did. Not defending the senators but also the Covid thing was gaining a lot of traction in January & February. Many senators & reps didn't trade on it until March.
- fabatka 4y ago
  > I think the best fix I've heard is that their trades need to be digitally announced immediately (within a few minutes of execution). Apart from the announcement, I'd add a delay of one day to the execution of said trades.
social_quotient 4y ago
Does the SEC not still have some domain scope here? Why are different laws needed for a different class of citizen?
- shaburn 4y ago
  The SEC has a budget determined by Congress.
PragmaticPulp 4y ago
> That same day, while the stock market remained lofty, Dr. Auchincloss reported selling $15,001 to $50,000 of a stock mutual fund. Days later he sold two more mutual funds and a stock > Dr. Auchincloss disclosed six sales of mutual funds that day, totaling between $111,006 and $315,000 in value. And > The rate cuts hadn’t immediately calmed investors. Stock trading was halted for 15 minutes on the morning of March 16 when the S&P 500 fell 7%, triggering a so-called circuit breaker. The index staggered to the closing bell, down 12%. > That same day, Ms. Chao, the transportation secretary, made three purchases in stock funds that track the S&P 500 and the U.S. stock market broadly, totaling between $600,003 and $1.2 million, according to her financial disclosures. Every time I click on one of these articles, I expect to find some individual stock trading related to specific companies on the receiving end of government action. However, when it ends up being vague examples of officials buying and selling broad-market or S&P index funds, it's much harder to see where the "insider trading" angle comes from. Especially when we have examples of officials trading in March, a full month after the viral panic had already spread through even public forums like Twitter. The line needs to be drawn somewhere, and I'm not convinced that forbidding public officials from buying and selling generic index and mutual funds is really that big of a concern, IMO. Now if someone can find evidence of government officials buying something like Moderna stock ahead of the FDA approval, then by all means let's prosecute with stiff consequences.
- selectodude 4y ago
  If you know about an imminent bill that, say, is going to inject fiscal stimulus to the tune of 10 percent of GDP and will reverse those stock market declines and then some, that's a pretty big reason to trade.
  - googlryas 4y ago
    Wouldn't you leverage up e.g. with options though, instead of just buying stock?
- fnikacevic 4y ago
  It's not strictly about actual unethical behavior. It's also about not ever creating the appearance of unethical behavior which erodes trust in government institutions. It's half of any ethics course on the job. My friend who is a lowly public servant is not allowed to hold anything besides index/mutual funds already and has to report any trades of those before they happen. This is for an individual with no tangible insider info. Elected officials with significant insider info need to be held to a much higher standard.
JumpCrisscross 4y ago
There are two kinds of problematic trading by members of Congress: 1. Straight-up insider trading. Buying or selling shares in individual stocks based on inside information. This is flagrantly illegal [1]. There are bills seeking to go further, banning the trading of individual stocks by Congressmen [2]. While we have limited evidence of this being a widespread problem, it's a good measure for public trust purposes. But this article is not about that! It's about: 2. Insider trading on indices. This is also illegal! The FBI subpoenaed a sitting Congressman's phone [3] when investigating concerns around this. But absent an incriminating text or e-mail, it's difficult to convince a jury the sales were made because of insider information versus because they felt like selling that day. Fortunately, this is an old problem with an old solution: 10b5-1 plans [4]. These are not without issue [5]. But given the power and insider access a sitting Congressman has relative to most public company CEOs, it makes sense to implement. To my knowledge, nobody has suggested a 10b5-1 analogue for public officials. [1] https://en.wikipedia.org/wiki/STOCK_Act https://en.wikipedia.org/wiki/STOCK_Act [2] https://www.congress.gov/bill/117th-congress/senate-bill/3494 https://www.congress.gov/bill/117th-congress/senate-bill/349... [3] https://en.wikipedia.org/wiki/2020_congressional_insider_trading_scandal https://en.wikipedia.org/wiki/2020_congressional_insider_tra... [4] https://corpgov.law.harvard.edu/2016/03/24/a-guide-to-rule-10b5-1-plans/ https://corpgov.law.harvard.edu/2016/03/24/a-guide-to-rule-1... [5] https://www.wsj.com/articles/executive-stock-sales-are-under-scrutiny-heres-what-regulators-are-interested-in-11628682985 https://www.wsj.com/articles/executive-stock-sales-are-under...
pstuart 4y ago
This is a bipartisan problem and should hopefully unite us in demanding an end to the practice. A more problematic issue is legalized bribery via campaign contributions -- our representation should improve when officials are not owned by their patrons.
seventytwo 4y ago
Want to fix it? You have to set the expectation and vote for the people who want to make government work. You can’t expect to somehow curtail corruption by voting a bunch of people who want to dismantle the government into the government.
papito 4y ago
The concept of "public service" is being slowly erased. The United States is becoming just like any other country, where people will do anything to get to power to get to the trough - it's the fastest way to get rich. Obviously has been happening for a long time. but there was some discretion to it. Now it's blatant and shameless.
coffeeblack 4y ago
Your president has been in federal positions of power for 50 years. Same for the speaker of Congress and many others. Why is anybody surprised that this is the outcome? That’s what the “swamp” was all about.
- prewett 4y ago
  So you want a bunch of people with no experience running the country? How many times in history has that not been a disaster? Merely being in power for a long time does not create a "swamp", bad ethics does. Bad ethics is known to be enabled by secrecy and inhibited by transparency. The solution needs to address the actual cause, not some unverified assumption, so more transparency is far likelier to actually reduce corruption. (And the guy who was going to "drain the swamp" was the swampiest guy around. Turns out he fights tooth and nail against any transparency into his affairs. Huh.)
  - coffeeblack 4y ago
    Are you really defending politicians staying in power for decades? Wow. What ideology does to people. The reason democracy has been so successful throughout the world is that it provides a peaceful way to remove people from power after a few years.
ISL 4y ago
Medical officials selling in March 2020 makes, um, sense? The pandemic's potential for destruction was massively clear to medical-professionals by mid-February. It is easy to believe that those making the trades were acting primarily on information known widely to the public. Washington State announced its first deaths in late February [1] It isn't that hard to put two and two together and expect that at least a fraction of skilled medical professionals will react. I'm a physicist and I was still able to recognize by late Feb/early March that we were headed for trouble. Similarly, just before the Federal government stepped in with stimulus in late March/early-April 2020, as a value-investor, I'd just begun to feel that the markets had fallen enough to begin buying equities again after a multi-year hiatus. Trading on both signals (imminent pandemic, increasingly-reasonable trailing P/E ratios) will look "exquisite", but required nothing but reading the news and making sober assessments of both situations. One may also be able to look at the same trading data and find officials who made exquisitely-terrible trades, especially after late-March 2020, where volatile markets created outsized losers and winners. [1] https://en.wikipedia.org/wiki/COVID-19_pandemic_in_Washington_(state) https://en.wikipedia.org/wiki/COVID-19_pandemic_in_Washingto...
- deleted 4y ago
  [deleted]
- Zanneth 4y ago
  The problem was that these medical officials were complicit in the economic destruction. They recommended to policymakers that the country take an extreme position on the virus and shutdown nearly everything. Hindsight is 20/20 of course, but now it is becoming clear that such an extreme reaction was not necessary, especially when comparing with countries like Sweden who focused on protecting the elderly and vulnerable and more or less left everyone else alone. So, they made a mistake, and the fact that they also profited from that mistake is where we should be worried.
robg 4y ago
I was in the executive branch in 2020, there was no mobilization until March.
jallen_dot_dev 4y ago
This article does an annoying thing where it gives you stats without proper comparison so you can't tell if the numbers are actually out of the ordinary. > A deputy to top health official Anthony Fauci reported 10 sales of mutual funds and stocks totaling between $157,000 and $480,000 that month. Impossible to tell if that's suspicious without knowing how much that deputy normally trades. > officials at another health agency, Health and Human Services, reported 60% more sales of stocks and funds in January than the average over the previous 12 months A better comparison would be to January 2019 to account for seasonality. Maybe people rebalance/reevaluate their investments at the start of the year. > Then-Transportation Secretary Elaine Chao purchased more than $600,000 in two stock funds Again, impossible to tell if that is unusual without comparison. Apparently she is worth 10s of millions of dollars. > Nearly 400 officials across 50 agencies reported owning stocks in airline, resort, hotel, restaurant and cruise companies in early 2020, the review found. Okay...? > [March] was the most active for trading by officials across the federal government, including at HHS March was the most active for trading, period. Because the markets were melting down. Also, by March the impact was more widely known to the public. There's more stuff below the fold but this is getting tedious.
- deleted 4y ago
  [deleted]
- tootie 4y ago
  Meanwhile this 1000x worse thing happened: https://www.nytimes.com/2022/10/20/business/economy/james-bullard-citi-private-event.html https://www.nytimes.com/2022/10/20/business/economy/james-bu...
cafard 4y ago
I don't know. "His January sales amounted to the largest number of transactions he had reported for a single month since 2018, according to his financial disclosures." Perhaps we could rephrase this as "His January sales amounted to more transactions than he had reported for any month in the preceding year." Or, if the that higher month in 2018 was early on, then "in the preceding n months". And for that matter, what was the dollar volume? "On March 13, then-President Donald Trump announced a federal partnership with the private sector to increase the nation’s testing capability for Covid, inviting top executives at 10 companies, including Target Corp., Walmart Inc., CVS Pharmacy Inc. and Walgreens Boots Alliance Inc., to the White House for the announcement. Roughly 300 federal officials reported owning stock in at least one of the 10 companies at the time, their financial disclosures show." OK, but did they buy that stock the week before? Full disclosure: I own stock in CVS and Boeing, or maybe I don't. Like many rational and only moderately prosperous Americans, I have investments in mutual funds. I'll save the next statement and see how exquisite my timing has been.
nightski 4y ago
Honestly just making them disclose trades before they make them would be a huge step forward. This wait 30 days nonsense is ridiculous.
neilv 4y ago
It might simplify anti-corruption compliance for certain lawmakers, if investments by Congresspersons and other upper officials were required to follow Bogleheads good practice conventions: "You're permitted investment in one primary home, one vacation home, a 6-month emergency fund, and everything else in a specific asset allocation of index funds (your-age-in-bonds percent US total-market bonds index fund, and the rest divided 4/5 total-US-stock-market and 1/5 total-international-stock-market index funds)." "This rule will help you to be aligned with citizens' interests in their retirement accounts, while suppressing the unfair advantage of unprecedented clairvoyant genius market-timing that you discovered shortly after gaining office."
NickC25 4y ago
Immediate disclosure of all trades (and reasons for the trade) needs to be the absolute minimum we have to push for as a society. Otherwise, all federal officials and their families should be completely banned from owning any kind of publicly available equity whatsoever for the entirety of the term.
Aperocky 4y ago
Should just have trade windows, preferably during recess. This has been proven to work (and even applies to plebs like me) so why not implement it there? Mr. Senator big brain going to take advantage of the 2 week recess to trade - go for it.
qclibre22 4y ago
"Unknown to the public". Not true. People that read the news knew something was up and that they couldn't control the spread. Some smart money was trimming stock positions before the Senators.
matt3210 4y ago
We could all see it happening in china but said "it won't happen here!" Lawmakers might have timed well, but they aren't the ONLY ones who did.
- tootie 4y ago
  It's true. Most of the info they supposedly traded on just wasn't secret. Most people and even most investors probably don't sit around reading CDC and WHO press releases but anyone could have found this info and made the same conclusion.
none_to_remain 4y ago
Kinda feeling like our rulers have lost the Mandate of Heaven
BlueTemplar 4y ago
I pretty much have to also point out two bigger conspiracies (or at best, unconscious ass-covering, which is still bad) : - "Masks do not work" - "The lab leak theory is not to be taken seriously" Where specialists with a conflict of interest and governments pushed both really hard, against specialist(-without-conflict-of-interest-the-only-one-that-matters) opinion.

381 points by lxm 4y ago

Relive3778 4y ago

https://archive.ph/Zlhkj https://archive.ph/Zlhkj

ChuckNorris89 4y ago

Wasn't this the biggest wealth transfer in current history?

Mikeb85 4y ago
Yup. However not just because of insider trading... Governments around the world mandated that (mostly) small businesses have to close and that blue collar work had to halt (due to relying on in-person interaction), all while pumping up the value of equities and real estate through monetary expansion. Then of course the smart money jumps out leaving the middle class holding the bag.
- MichaelCollins 4y ago
  > Governments around the world mandated that (mostly) small businesses have to close This was really insidious. Small shops selling [widget] were forced to close because the shop was non-essential. But walmart selling [the exact same widget] was allowed to keep doing business because they also sold groceries and were therefore essential. Could they have forced Walmart to cordon off the non-essential aisles while keeping grocery section open? Could they have taxed walmart more to support the small businesses which were being strangled? Maybe they could have, but of course they didn't.
  - Mikeb85 4y ago
    Not to mention, closing so many stores, forcing curfews, etc... just packed more people into the same store at the same time. Literally the opposite of social distancing. I used to always shop for groceries at 10pm because the store was mostly empty. The officials near me in their infinite wisdom decided stores have to close by 6 so they were packed all day long...
  - fleddr 4y ago
    The businesses you mention, small shops depending on electronic components, continue to suffer. They're last in line in the supply chain shortages, and many are disappearing.
  - jokethrowaway 4y ago
    Governments do whatever they want and then find a PR friendly way of saying things. Of course we're not shutting down all the small businesses who compete with Walmart's! We're saving your life from the flu!
whimsicalism 4y ago
> Wasn't this the biggest wealth transfer in current history? What does that even mean? What constitutes a "wealth transfer" as a single category? My guess is "salaries and wages paid" constitutes the largest wealth transfer every year.
- ChuckNorris89 4y ago
  Paying salaries and wages are not a wealth transfer, but a transaction, i.e. I give 8 hours of my day to my employer and receive cash in exchange. In this context the wealth transfer means devaluing wages and cash while inflating assets. The wage earning class got shafted losing purchasing power while the asset owning class made bank. All through the stroke of a pen, basically overnight.
  - whimsicalism 4y ago
    > In this context the wealth transfer means devaluing wages and cash while inflating assets. How was this done?
- BlueTemplar 4y ago
  and what is "current history" ?
jokethrowaway 4y ago
Of course, never let a good crisis go to waste

greatpostman 4y ago

shmatt 4y ago
This is March 2020, When Fauci was on TV claiming 200,000 Americans will die, even though we didn't see those numbers just yet If you chose not to sell at that time, that's on you, but his subordinates believed him according to the article

imwillofficial 4y ago

Hmmm it’s as if those in power aren’t looking out for us, but only their wallets. On both the left and the right…

Uehreka 4y ago
I’m not gonna say that no Democrats do this (because it would be clearly untrue, see Nancy Pelosi). But I do think it’s pretty notable that this year a Democrat Senator proposed a bill to rein this in, and got 15 co-sponsors, all of whom were Democrats. As far as I can tell, the bill doesn’t seem to have any culture war or partisan poison pills, so it seems pretty odd that a big chunk of the Democrats are co-sponsors (many more may still vote for it if it comes to a vote) and zero Republicans are. https://www.congress.gov/bill/117th-congress/senate-bill/3494/cosponsors https://www.congress.gov/bill/117th-congress/senate-bill/349...
- MichaelCollins 4y ago
  I think this is because Democratic voters are more in tune to these issues than Republican voters. Not because Democratic politicians are intrinsically more honest, they're just responding to voter pressure. Get more Republican voters to recognize these issues and you may see more Republican politicians responding in kind. My reason to believe this is Democratic politicians weren't addressing these problems until after Democratic voters started to perceive the problem and apply pressure. The point being, politicians won't regulate themselves spontaneously; their feet need to be held to the fire by voters.
  - jokethrowaway 4y ago
    Conservatives and Libertarian circles consistently make fun of Nancy Pelosi's blatant insider trading so I wouldn't be so sure. It's basically a meme. That said, additional legislation is unlikely to fix the issue, I'm sure Nancy will find another way to bypass any kind of checks coming their way (eg. setting up a company wherever in the world and trading through that). No, legislating this kind of things can just create additional work for the accountants of the powerful but it will never fix the problem. The only real change can come from removing power from a few hands and decentralise, giving it back to the people.

nyc_data_geek1 4y ago

At this point it's pretty much common knowledge that legislators engage in insider trading using nonpublic, oftentimes classified information and intelligence gathered on the taxpayer dime routinely and with no fear of political or legal repercussions. They're not particularly motivated to close this loophole either, for reasons which should be obvious. This should be a much bigger issue, IMO. We the People need to make them understand this blatant self dealing will not be tolerated.

bamboozled 4y ago
While you’re at it, lobbying should be completely and utterly outlawed, anyone found taking money for political influence should be handed a hefty jail term or worse. It’s absolute filth.
- PaulDavisThe1st 4y ago
  OK, so let's say you strongly believe in the mission of CampaignForFooBarForAll. You've raised money for them, you've been on the marches, you've done the phone tree. But you want to do more. Someone suggests you head to DC, and start talking to congresscritters (or their aides) about the message of CampaignForFooBarForAll. You'd love to do this. But you need to pay the rent, and for food, and other regular expenses. Someone in the campaign suggests that they could pay for you to do this for 1 month a year. Shall we send you to jail? Let's suppose that you say "yes". Now consider Jan Lobbier, who works for BigMega Corp. Jan is employed there full time, with various duties. Among them are trips and calls to DC to put the company's position in front of The People Who Matter. This is not Jan's only job, just a part of their job duties. Should Jan go to jail? What you're suggesting would mean that lobbying could only be done by the financially independent (i.e. can lobby because they don't need to work), and that seems like a bad idea for everyone.
  - bamboozled 4y ago
    I'm talking about politicians accepting donation money. Not the lobbyist themselves. If politicians didn't accept "donations" they wouldn't have a role. Politicians receive a salary, that should be enough, if the salary for a congress person isn't high enough, then we can talk about that at the next election, they also might be better at managing the economy and dealing with things like inflation because it would be a harsh reality for them, like it is for everyone else.

TotoHorner 4y ago

Shaming people for purchasing/selling S&P 500 mutual funds is really dumb. Expected better from the WSJ. But yeah, trading individual stocks is highly suspect and should be illegal.

dereg 4y ago
If you have the knowledge that Congress does, the S&P 500 is the only instrument you need to do very well for yourself
- shaburn 4y ago
  Incorrect. Rarely, if ever, does any congress person have any insight or control into detrimental effects that would cause a market wide bear market or correction. If the do, it is even more unlikely the certainty of timing would be an advantage.
  - freeplay 4y ago
    > Rarely, if ever, does any congress person have any insight or control into detrimental effects that would cause a market wide bear market or correction Rarely like a once in a lifetime global pandemic? Control like the ability to force shut downs of businesses across the country?
eloff 4y ago
If you're going short or long the entire index on non public information, is that really innocent?
- deleted 4y ago
  [deleted]
- xboxnolifes 4y ago
  Shorting? Maybe not. But I would think we want congress to be long on the S&P, even if it also benefits them.

whimsicalism 4y ago

Washington Officials to me means officials in the state of Washington. It's compounded by the fact that most people who live in Washington, DC won't say they are "from Washington." It's exclusively a media phenomena. Is saying "Federal officials" so hard?

affinepplan 4y ago
> anyone who lives in Washington, DC won't say they are "from Washington." not true. source: I live there
- whimsicalism 4y ago
  You say you "live in Washington" without DC suffixed? If so, this is a new trend from transplants - lived there for 20 years and pretty much never heard that from anyone local. And such a usage contributes to the confusion, in my opinion.
  - MichaelCollins 4y ago
    Your experience matches mine, people who live in or near DC say "DC". Sometimes "Washington, DC." Politicians and media say simply "Washington" because it sounds more formal or powerful. It's kind of like how everybody in Pennsylvania says "PA" in casual conversation. It just rolls off the tongue easier.
  - esprehn 4y ago
    I grew up there and live there currently. Everyone I know either says "DC", "the district" or "the city" depending on the context. Never heard anyone say "from Washington" who didn't mean the state.

eej71 4y ago

If you want the money to stop flowing into politicians, you have to be willing to revoke the power they have over your economic liberties.

boomskats 4y ago

When I saw this headline, I assumed it would be an article discussing the military stock trading activity of members of Congress in the week or two prior to to Russia's surprise unilateral decision to invade Ukraine.

huevosabio 4y ago
This wouldn't be much surprise though, right? The President had been quite vocal of the imminent invasion, it just that a lot of people decided not to believe it.
- boomskats 4y ago
  I mean, you could say the same thing about COVID. The fact that the relevant stock stayed flat & didn't skyrocket until the day of the actual invasion suggests that there was some surprise.
- BlueTemplar 4y ago
  Yeah, some of my family members were sounding the alarm late December already...

akudha 4y ago

lol. For every person doing it blatantly, there must be more people doing it quietly? Like letting a friend of a friend in another state/country trade on the info? Are there ways to track these trades too?

tb_technical 4y ago

"We know that they are lying, they know that they are lying, they even know that we know they are lying, we also know that they know we know they are lying too, they of course know that we certainly know they know we know they are lying too as well, but they are still lying. In our country, the lie has become not just moral category, but the pillar industry of this country." -Aleksandr Solzhenitsyn

adabyron 4y ago

I think the best fix I've heard is that their trades need to be digitally announced immediately (within a few minutes of execution). There are currently fines for not reporting that often get waived. Even if they did make the fines legit, it becomes very difficult to track & indict them for tipping off friends or non-family members unless it's a very large amount worth many millions. Though to counter this argument the article mentions a few cases. North Carolina Sen. Richard Burr was not mentioned but he is still being investigated for what seemed like very obvious trading based on knowledge gained & tipping off family members. Alabama Sen. Tuberville is another good one to watch for trades in my opinion. He's very active. Last year he put out some big tech puts on MSFT that were very OTM (out of the money) for the spring of this year. Rep. Pelosi is overrated a bit in my opinion but is often the joke of these talks. Her husband Paul (a VC) most likely does all the trading & he seems to have just benefitted from using calls on stocks that are already ITM (in the money) & far dated. He's probably not a good person to use if you're working in tech in my opinion as your job & personal knowledge probably make you overweight in tech risks. Anyone mentioning Pelosi should also probably not be considered knowledgeable on this subject since she's 99% of the noise on it & very little substance. - Edit - It should be noted, anyone frequenting investment forums probably made a lot of these Covid trades before the dates many of these senators did. Not defending the senators but also the Covid thing was gaining a lot of traction in January & February. Many senators & reps didn't trade on it until March.

fabatka 4y ago
> I think the best fix I've heard is that their trades need to be digitally announced immediately (within a few minutes of execution). Apart from the announcement, I'd add a delay of one day to the execution of said trades.

social_quotient 4y ago

Does the SEC not still have some domain scope here? Why are different laws needed for a different class of citizen?

shaburn 4y ago
The SEC has a budget determined by Congress.

PragmaticPulp 4y ago

> That same day, while the stock market remained lofty, Dr. Auchincloss reported selling $15,001 to $50,000 of a stock mutual fund. Days later he sold two more mutual funds and a stock > Dr. Auchincloss disclosed six sales of mutual funds that day, totaling between $111,006 and $315,000 in value. And > The rate cuts hadn’t immediately calmed investors. Stock trading was halted for 15 minutes on the morning of March 16 when the S&P 500 fell 7%, triggering a so-called circuit breaker. The index staggered to the closing bell, down 12%. > That same day, Ms. Chao, the transportation secretary, made three purchases in stock funds that track the S&P 500 and the U.S. stock market broadly, totaling between $600,003 and $1.2 million, according to her financial disclosures. Every time I click on one of these articles, I expect to find some individual stock trading related to specific companies on the receiving end of government action. However, when it ends up being vague examples of officials buying and selling broad-market or S&P index funds, it's much harder to see where the "insider trading" angle comes from. Especially when we have examples of officials trading in March, a full month after the viral panic had already spread through even public forums like Twitter. The line needs to be drawn somewhere, and I'm not convinced that forbidding public officials from buying and selling generic index and mutual funds is really that big of a concern, IMO. Now if someone can find evidence of government officials buying something like Moderna stock ahead of the FDA approval, then by all means let's prosecute with stiff consequences.

selectodude 4y ago
If you know about an imminent bill that, say, is going to inject fiscal stimulus to the tune of 10 percent of GDP and will reverse those stock market declines and then some, that's a pretty big reason to trade.
- googlryas 4y ago
  Wouldn't you leverage up e.g. with options though, instead of just buying stock?
fnikacevic 4y ago
It's not strictly about actual unethical behavior. It's also about not ever creating the appearance of unethical behavior which erodes trust in government institutions. It's half of any ethics course on the job. My friend who is a lowly public servant is not allowed to hold anything besides index/mutual funds already and has to report any trades of those before they happen. This is for an individual with no tangible insider info. Elected officials with significant insider info need to be held to a much higher standard.

JumpCrisscross 4y ago

There are two kinds of problematic trading by members of Congress: 1. Straight-up insider trading. Buying or selling shares in individual stocks based on inside information. This is flagrantly illegal [1]. There are bills seeking to go further, banning the trading of individual stocks by Congressmen [2]. While we have limited evidence of this being a widespread problem, it's a good measure for public trust purposes. But this article is not about that! It's about: 2. Insider trading on indices. This is also illegal! The FBI subpoenaed a sitting Congressman's phone [3] when investigating concerns around this. But absent an incriminating text or e-mail, it's difficult to convince a jury the sales were made because of insider information versus because they felt like selling that day. Fortunately, this is an old problem with an old solution: 10b5-1 plans [4]. These are not without issue [5]. But given the power and insider access a sitting Congressman has relative to most public company CEOs, it makes sense to implement. To my knowledge, nobody has suggested a 10b5-1 analogue for public officials. [1] https://en.wikipedia.org/wiki/STOCK_Act https://en.wikipedia.org/wiki/STOCK_Act [2] https://www.congress.gov/bill/117th-congress/senate-bill/3494 https://www.congress.gov/bill/117th-congress/senate-bill/349... [3] https://en.wikipedia.org/wiki/2020_congressional_insider_trading_scandal https://en.wikipedia.org/wiki/2020_congressional_insider_tra... [4] https://corpgov.law.harvard.edu/2016/03/24/a-guide-to-rule-10b5-1-plans/ https://corpgov.law.harvard.edu/2016/03/24/a-guide-to-rule-1... [5] https://www.wsj.com/articles/executive-stock-sales-are-under-scrutiny-heres-what-regulators-are-interested-in-11628682985 https://www.wsj.com/articles/executive-stock-sales-are-under...

pstuart 4y ago

This is a bipartisan problem and should hopefully unite us in demanding an end to the practice. A more problematic issue is legalized bribery via campaign contributions -- our representation should improve when officials are not owned by their patrons.

seventytwo 4y ago

Want to fix it? You have to set the expectation and vote for the people who want to make government work. You can’t expect to somehow curtail corruption by voting a bunch of people who want to dismantle the government into the government.

papito 4y ago

The concept of "public service" is being slowly erased. The United States is becoming just like any other country, where people will do anything to get to power to get to the trough - it's the fastest way to get rich. Obviously has been happening for a long time. but there was some discretion to it. Now it's blatant and shameless.

coffeeblack 4y ago

Your president has been in federal positions of power for 50 years. Same for the speaker of Congress and many others. Why is anybody surprised that this is the outcome? That’s what the “swamp” was all about.

prewett 4y ago
So you want a bunch of people with no experience running the country? How many times in history has that not been a disaster? Merely being in power for a long time does not create a "swamp", bad ethics does. Bad ethics is known to be enabled by secrecy and inhibited by transparency. The solution needs to address the actual cause, not some unverified assumption, so more transparency is far likelier to actually reduce corruption. (And the guy who was going to "drain the swamp" was the swampiest guy around. Turns out he fights tooth and nail against any transparency into his affairs. Huh.)
- coffeeblack 4y ago
  Are you really defending politicians staying in power for decades? Wow. What ideology does to people. The reason democracy has been so successful throughout the world is that it provides a peaceful way to remove people from power after a few years.

ISL 4y ago

Medical officials selling in March 2020 makes, um, sense? The pandemic's potential for destruction was massively clear to medical-professionals by mid-February. It is easy to believe that those making the trades were acting primarily on information known widely to the public. Washington State announced its first deaths in late February [1] It isn't that hard to put two and two together and expect that at least a fraction of skilled medical professionals will react. I'm a physicist and I was still able to recognize by late Feb/early March that we were headed for trouble. Similarly, just before the Federal government stepped in with stimulus in late March/early-April 2020, as a value-investor, I'd just begun to feel that the markets had fallen enough to begin buying equities again after a multi-year hiatus. Trading on both signals (imminent pandemic, increasingly-reasonable trailing P/E ratios) will look "exquisite", but required nothing but reading the news and making sober assessments of both situations. One may also be able to look at the same trading data and find officials who made exquisitely-terrible trades, especially after late-March 2020, where volatile markets created outsized losers and winners. [1] https://en.wikipedia.org/wiki/COVID-19_pandemic_in_Washington_(state) https://en.wikipedia.org/wiki/COVID-19_pandemic_in_Washingto...

deleted 4y ago
[deleted]
Zanneth 4y ago
The problem was that these medical officials were complicit in the economic destruction. They recommended to policymakers that the country take an extreme position on the virus and shutdown nearly everything. Hindsight is 20/20 of course, but now it is becoming clear that such an extreme reaction was not necessary, especially when comparing with countries like Sweden who focused on protecting the elderly and vulnerable and more or less left everyone else alone. So, they made a mistake, and the fact that they also profited from that mistake is where we should be worried.

robg 4y ago

I was in the executive branch in 2020, there was no mobilization until March.

jallen_dot_dev 4y ago

This article does an annoying thing where it gives you stats without proper comparison so you can't tell if the numbers are actually out of the ordinary. > A deputy to top health official Anthony Fauci reported 10 sales of mutual funds and stocks totaling between $157,000 and $480,000 that month. Impossible to tell if that's suspicious without knowing how much that deputy normally trades. > officials at another health agency, Health and Human Services, reported 60% more sales of stocks and funds in January than the average over the previous 12 months A better comparison would be to January 2019 to account for seasonality. Maybe people rebalance/reevaluate their investments at the start of the year. > Then-Transportation Secretary Elaine Chao purchased more than $600,000 in two stock funds Again, impossible to tell if that is unusual without comparison. Apparently she is worth 10s of millions of dollars. > Nearly 400 officials across 50 agencies reported owning stocks in airline, resort, hotel, restaurant and cruise companies in early 2020, the review found. Okay...? > [March] was the most active for trading by officials across the federal government, including at HHS March was the most active for trading, period. Because the markets were melting down. Also, by March the impact was more widely known to the public. There's more stuff below the fold but this is getting tedious.

deleted 4y ago
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tootie 4y ago
Meanwhile this 1000x worse thing happened: https://www.nytimes.com/2022/10/20/business/economy/james-bullard-citi-private-event.html https://www.nytimes.com/2022/10/20/business/economy/james-bu...

cafard 4y ago

I don't know. "His January sales amounted to the largest number of transactions he had reported for a single month since 2018, according to his financial disclosures." Perhaps we could rephrase this as "His January sales amounted to more transactions than he had reported for any month in the preceding year." Or, if the that higher month in 2018 was early on, then "in the preceding n months". And for that matter, what was the dollar volume? "On March 13, then-President Donald Trump announced a federal partnership with the private sector to increase the nation’s testing capability for Covid, inviting top executives at 10 companies, including Target Corp., Walmart Inc., CVS Pharmacy Inc. and Walgreens Boots Alliance Inc., to the White House for the announcement. Roughly 300 federal officials reported owning stock in at least one of the 10 companies at the time, their financial disclosures show." OK, but did they buy that stock the week before? Full disclosure: I own stock in CVS and Boeing, or maybe I don't. Like many rational and only moderately prosperous Americans, I have investments in mutual funds. I'll save the next statement and see how exquisite my timing has been.

nightski 4y ago

Honestly just making them disclose trades before they make them would be a huge step forward. This wait 30 days nonsense is ridiculous.

neilv 4y ago

It might simplify anti-corruption compliance for certain lawmakers, if investments by Congresspersons and other upper officials were required to follow Bogleheads good practice conventions: "You're permitted investment in one primary home, one vacation home, a 6-month emergency fund, and everything else in a specific asset allocation of index funds (your-age-in-bonds percent US total-market bonds index fund, and the rest divided 4/5 total-US-stock-market and 1/5 total-international-stock-market index funds)." "This rule will help you to be aligned with citizens' interests in their retirement accounts, while suppressing the unfair advantage of unprecedented clairvoyant genius market-timing that you discovered shortly after gaining office."

NickC25 4y ago

Immediate disclosure of all trades (and reasons for the trade) needs to be the absolute minimum we have to push for as a society. Otherwise, all federal officials and their families should be completely banned from owning any kind of publicly available equity whatsoever for the entirety of the term.

Aperocky 4y ago

Should just have trade windows, preferably during recess. This has been proven to work (and even applies to plebs like me) so why not implement it there? Mr. Senator big brain going to take advantage of the 2 week recess to trade - go for it.

qclibre22 4y ago

"Unknown to the public". Not true. People that read the news knew something was up and that they couldn't control the spread. Some smart money was trimming stock positions before the Senators.

matt3210 4y ago

We could all see it happening in china but said "it won't happen here!" Lawmakers might have timed well, but they aren't the ONLY ones who did.

tootie 4y ago
It's true. Most of the info they supposedly traded on just wasn't secret. Most people and even most investors probably don't sit around reading CDC and WHO press releases but anyone could have found this info and made the same conclusion.

none_to_remain 4y ago

Kinda feeling like our rulers have lost the Mandate of Heaven

BlueTemplar 4y ago

I pretty much have to also point out two bigger conspiracies (or at best, unconscious ass-covering, which is still bad) : - "Masks do not work" - "The lab leak theory is not to be taken seriously" Where specialists with a conflict of interest and governments pushed both really hard, against specialist(-without-conflict-of-interest-the-only-one-that-matters) opinion.