Throw them all out

You have to be a freaking genius to be a member of Congress. In a single day they prove it's possible to get rich trading options without knowing about technical analysis. They always get out of the market just before TSHTF, and additional funding is always available for your personal business at the drop of a hat. Or one's trousers. So goes a new book by Peter Schweizer "Throw Them All Out"

If I weren't already a Declinist, this book would make me so. If I was able to go to the election booth, I wouldn't see the option, "None of the above," below the candidate names. If Peter Schweizer's research is correct, I never stood a chance anyways in picking someone without a financial interest in abusing me.

How do our nation's top politicians exit office with millions more dollars in the bank than those accrued from their salaries, massive benefits unholy perqs and perhaps some patient/prudent investing? 


Nobody has directly and fully answered that question in one book until Throw Them All Out was published.

The club Schweizer calls the `Permanent Political Class' makes rules for itself. Members with no time to meet small business constituents do not have any trouble legally enriching themselves and those that vote for them through earmarks, real estate deals, securities violations, trading on inside information, self-dealing with stimulus funds and literally every budget item.

DC is a profit center for them and all that support them in various capacities. They use government to enforce sophisticated pay-to-play and don't-make-waves rules. There is little incentive for them to leave Washington, which is one reason they became the permanent political class.

Schweizer cites popular officials that play the IPO (Initial Public Offering) game. For example, he shows how Nancy Pelosi, the 60th Speaker of the United States House of Representatives with an estimated net worth of $58 million, bought 5,000 shares of V (Visa) at the privileged IPO price $44. This trade showed a profit immediately. The shares reached about $88 in a matter of days. 


Funny enough, Pelosi was working on related legislation that would have hampered the card brands and this legislation was eventually watered down until it was meaningless. This helped avoid a strong negative affect on the price of the stock, and she benefited. The rest of us can't do it because we're subject to conflict of interest rules, unlike lawmakers. 


Plus, we're not invited to participate in IPOs until after the price is run up. Plus, we aren't engaged in activities that would run up the price!

Schweizer points out that if you're an elected official and you sit on an important committee, you are allowed to trade on information that comes your way. These officials can even help shape decisions that have economic consequences and then participate in the winnings. It stands to reason that if you're on the banking committee, you probably trade bank stocks, playing it both long and short. If you're a staffer, you may accumulate sensitive non-public information and sell it to hedge funds.

One Congressman used a private meeting with Fed Chair Bernanke and Treasury Secretary Paulson to further his cause.He was in the role of Ranking Member on the House Financial Services Committee and used the dire information presented to him in this meeting to bet heavily that the market would go down, and made a killing using short sale option trades. Using "insider info" this elected official bet against American business and made a killing. 
Congressmen are big winners in the stock market. They cultivate companies in their loyalty structure from whom they get insider information often at the committee level. There are many ways they get rich while serving constituents, especially if you know what big deal Warren Buffett will do next and when. Many names are given in this book of successful inside information operators within Congress.

This book kills off my idea of the Congressman as a prudent, ethical spokesperson for the people of this fine country. I am shocked that they would stoop to such activities.


Okay, I can't write any more with a straight face. I ain't be no suprised at all. Dem be some smart mudders up dere in Washington.