Pelosi and a lifetime of trading(unusualwhales.com) |
Pelosi and a lifetime of trading(unusualwhales.com) |
THEN maybe making money from stock options is actually better than taking money from lobbyists? Lawmakers can make money from both hurting and helping companies, so it doesn't create a particular incentive to go out and help PARTICULAR companies (that said, there is an incentive to create volatility, which isn't great). Meanwhile, lobbying tends to advantage some of the least ethical companies (e.g. Opiods, fossil fuels) because the only incentive is to HELP the company at the expense of customers.
To be clear, I don't think it's right for lawmakers to make any more by virtue of their position than the salaries set forth by the law. I'm just saying that of the several unethical ways they can make money, stock options have incentives least misaligned with the public good.
You are assuming that said laws are for the public good and not the good of lobbyists. I would guess this happens more often than not: politicians pass a law that is for lobbyists and against the public good, then make money buying stock against the reaction of said law.
"Never trust a politician," is probably as old as civilization, why do we think ours are any better?
Oh, and when the system finally crumbles from under all the rot, guess who suffers and who doesn't. I'll give a hint, the people who control the police and criminal justice system won't be the ones suffering.
The options contract market is massive, in the public markets they are fungible and actively tradeable. In private equity markets they are mostly limited to compensation mechanisms.
Not only can you buy options, you can also write the contract and sell it on the market.
https://www.investopedia.com/options-basics-tutorial-4583012
Gotta love financially illiterate HN. He made over 100% on the trade in something like 1 month. 100% * 12 is over 1000%
> In the House and the Senate reports Mr. Whale showed that both parties, no matter their allegiance, seem to be trading and often legislating to benefit their own positions.
But taxation (of rich people) without representation (for rich people)? Oh, intolerable! Better go to war over that injustice. Pay some poor people to kill each other over it (then forget to pay the bill, naturally).
250ish years later and rich people only de facto run the government, rather than de jure. Progress, I suppose.
The top 1% make 500k The top .01 make 18 million.
260 millions put Rick in a world of his own.
Only 16,000 families make at least 7 mlion a year.
Edit: Grammar and Spelling
It takes money to get elected and stay elected, so rich people get elected. While they take advantage of their political power while elected to make money, they also make money after being elected as well, through speaking and other means. The whole point of this process is to make money. Again, American, we like money.
So if you don't like all this, you're a socialist and bad person. Shame on you for being so un-American. Instead get some money and join the party!
Uh oh looks like Lockheed isn't getting any this year. Better divest!
https://www.snopes.com/fact-check/nancy-pelosi-crime-family/
>Was Nancy Pelosi’s brother, Franklin D. Roosevelt D’Alesandro, charged with lying during a rape trial? Status: MIXTURE The Facts: Nancy Pelosi’s brother, Franklin D. Roosevelt D’Alesandro, was charged with perjury during a rape trial in the 1950s. However, he was eventually acquitted of those charges
How is that a mixture? The poster claims he has been charged, not convicted, Snopes confirms he was charged but... Ends up labelling this as mixed? That's pure damage control from Snopes at this point
Reminds me of Hillary Clinton’s remarkable skill trading cattle futures. I suppose great politicians must also be great at reading the market. Incredible talent.
The Tea Act was (among other things) intended to, and probably did, lower the price of tea in America. It hurt smugglers and tea importers.
> I always assumed the Sons of Liberty had both wealthy and more middle class members.
Any non-landowners who participated (were there many?) got had, then, since they couldn't vote under the original constitution and state laws at the time. They also didn't get a say in the drafting of the constitution or in ratifying it (I mean, obviously, who wants them stinking up the place?)
"But they got representation—just not the right to vote, or to run for many offices" Sure, but that's awfully close to an argument from the other side of the Atlantic, that rich British citizens in America didn't find convincing when it was applied to them:
https://en.wikipedia.org/wiki/Virtual_representation
[EDIT] All I'm saying is, we're a country the founding principle of which is basically "it's not who your parents are that make you worthwhile—it's having money". That was the fundamental disagreement between the Colonies (that is: the people who drove us to war, and who formed the government afterward) and Britain. Given our veneration of that founding, it's unsurprising that a country still operating under a constitution drafted by slavers and drug smugglers would tend, perhaps even more than other places, to be run by particularly scummy rich people with little shame about the shady ways they make their money.
I don't know if a rollover into a blind trust has to involve a complete liquidation to cash to start off. That would make sense, since then there could be no assumptions about which securities the trust held.
I think you can't realistically (and shouldn't) block them from owning equities entirely though.
You don't need to block them having anything to do with the stock market; you just need to eliminate the presence and appearance of dirty play.
There was some reporting on this issue more broadly when Senator Burr seemed to place trades directly due to coronavirus information, which included Pelosi’s husband’s trades.
Edit to add: I would concur with others that we probably need to restrict trading for politicians and their family, the same way we do insiders at corporations. Index funds okay, specific stocks or perceived competition, no.
If Paul Pelosi really had that much alpha in quarterly moves in ultra-liquid stocks like Microsoft and Disney, he'd almost certainly be a hedge fund manager.
IMO employee insiders have restrictions to trading the stocks of their company. I don't think it's overly onerous to have congresspeople disallowed from direct control over their or their immediate family's portfolios. Does that make it difficult to work in congress and have a family member working in finance? Sure, but I think that's okay.
I think for people in high office, even controlling when to move in or out of index funds is also inappropriate. Congress has both information and makes choices which have broad impact across the economy.
But to your first point, that this "doesn't actually look suspicious", I'll only mention that classic "indicators of suspicion" in a criminal context are motive, means and opportunity, all of which seem to be present.
But to broaden the conversation, the main implied concern is did she profit through use of non-public information. While I think that's a worthy concern, I think perhaps the more important one is whether the holdings of congress overall tilt the policies they enact. This extends beyond stocks (where even members who are limited to index funds may be disinclined to, e.g. push for limits or rules surrounding buybacks etc), to areas like how real estate holdings impact housing policy stances.
The purchase was made 1 month before this story[1] broke, which was a significantly market moving announcement.
There's plausible deniability, of course.
[1] https://www.cnbc.com/2021/01/25/biden-plans-to-replace-gover...
Assuming yes, the disclosure report [1] says it was 25 calls with a strike price of $500 with expiration of 3/18/22 (so another long dated option). Tesla's share price that day was ~$650 [2] and the value of the 500 call went up (from ~$200 to $400) but has come right back down to ~$200 [3]. They have not exercised / sold the options (visit [4] and search for Pelosi in Filing Year 2021).
[1] https://disclosures-clerk.house.gov/public_disc/ptr-pdfs/202...
[2] https://finance.yahoo.com/quote/TSLA/history/
[3] https://finance.yahoo.com/quote/TSLA220318C00500000?p=TSLA22...
[4] https://disclosures-clerk.house.gov/PublicDisclosure/Financi...
[1] https://www.cbsnews.com/video/confronting-pelosi-on-insider-...
The consistent beating of the odds is what makes it suspicious.
If you roll 12 with two dice, it is not suspicious. If you do it 10 times in a row, my trust is gone!
I would argue this is an even bigger red flag. Professional traders are much more aware of subtle cause & effects within the markets.
i.e. Not-yet public info about reducing tariffs on imported wheat would lower raw-material cost for bread companies, then would lower the cost for McDonald's hamburger buns, then McDonalds makes more profit this quarter...and Pelosi's husband buys a bunch of options on McDonalds, then dumps the options immediately after the info goes public.
So insider information that seems innocuous to the average person could be used and abused like crazy by professionals like Pelosi's husband.
As others online have pointed out, despite an above average year, her portfolio is still underperforming an S&P 500 index fund with the dividends reinvested.
Should politicians be forced to put their assets in a blind trust while in office? Yeah, probably. But I don't think I will indict Pelosi's slightly above average year of investments as evidence of anything in particular.
Strange to compare against sp500 when her holdings are more aligned with NASDAQ, up ~50% from last June.
I mean, any other year and that'd be extraordinary, but I'm just some schmuck who put my 401k mostly in a high growth index fund and I got over 70% last year. I wasn't even trying.
The optics are bad, for sure.
https://www.bloomberg.com/news/articles/2021-07-10/pelosi-hu...
You would, so would I but history has shown he won't have to worry about that.
Even if you lose money, insider trading is still insider trading. Congress + senators 100% receive insider information. Even if its not near-term merger announcements or big federal contracts - they still have an extremely advantaged position and access to information that the general public doesn't have.
Its ridiculous that they can trade individual stocks, yet alone options.
They should be restricted from buying individual stocks, and should only be allowed to buy mutual funds and ETFs at a minimum. Pretty much any employee on Wall Street (even if "back-office") has similar restrictions.
I don't even know why this is a question - the optics of short-term levered bets from elected officials (or family of) is terrible. Completely ruins any resemblance of "public service."
Even with this, it might not be enough. Elected officials could still buy the TQQQ ETF (3x leverage on NASDAQ) prior to a stimulus bill passing. It would be too onerous to not allow any stock exposure, but maybe they should be required to disclose trades in real-time vs. at the end of every quarter.
IMHO the whole system needs a reformation. You should only be allowed to invest long-term, at least one month, probably years. Day trading and option contracts enable illegal insider trading.
Seems like the system is built in a way that encourages them to insider trade and throw kickbacks around to maximize their wealth while in power and after.
"Most of Pelosi's gains are quite interesting, given the timing of her plays. For example, she was able to get into TSLA, DIS around stimulus news, NVDA before American Semiconductor funding was announced, among a long list of interesting picks. Mr. Whale leaves it to the reader to check her transactions and the news around her purchases (all available for free on the platform). She also timed the NFLX buys on June 18th perfectly. It was released on July 14th that NFLX is entering the videogame space, causing the stock to rally significantly."
Basically, by assuming that all the trades were the maximum of the range (and per trade), it’s overweighting the PayPal and Crowdstrike performance and downweighting the MSFT and GOOG “under performance” (they bought GOOG near the top?).
I don’t follow why most of the Feb 20 options aren’t being valued either. Those were the “scandalous” trades. And they were all (IIRC), 1-year out LEAPs or something. Seemed a reasonable thing at the time! (“People are panicking, buy now and assume it’s back to normal in a year”).
Has someone done a more careful analysis? (At the very least, I strongly doubt that the positions would be the same between the crowd strike and MSFT shares, and that the MSFT shares were purchased alongside the MSFT options as a hedge).
Edit: And umm, all the options trades are listed explicitly as the number of contracts purchased. So people can easily look up the VWAP or similar for the purchase date and get a real number...
And they shouldn't be allowed to take jobs/money (including "speaking fees", a.k.a. bribes) from publicly owned corporations for 15 years after leaving public office.
I have made a lot of money following her trades, particularly when she jumped in on Crowdstrike right before the government security hacks.
This lady can tell the future. /s
Some random young representative from the middle of nowhere has almost no influence in congress. It takes years and powerful backers to develop that. Part of the argument for term limits is to prevent people from making a career out of being a representative or senator, which is what you need to do accumulate power.
Not only should politicians not be incentivized to select policies which benefit them specifically, but they should be incentivized to select policies which materially benefit the population overall.
"Her husband, Kurt DelBene, is Chief Digital Officer and EVP of Corporate Strategy, Core Services Engineering and Operations at Microsoft Corporation,[33] and led the effort to fix the Healthcare.gov website at the request of President Barack Obama.[34]"
Thanks for coming through on this ask. I'm having a hard time finding it, and it's a point of contention I plan on raising with Virginia legislators if any of them voted in favor.
I also think that the amount of nonpublic information that congresscritters have access to is substantially overblown. The fact that they can pass laws affecting the industries is a bigger lever, in my view.
My sense is that this is one of those feel-good things, like setting politician salaries to a low level, which doesn't actually do anything to improve the quality of government.
Unfortunately there is bleed through between these, and no good way to distinguish the two except ok a case by case basis, which seems to me like a credible argument for forbidding all trading.
Not all representatives enrich themselves like this.
Pretty much none of the political/self-dealing/disqualified person financial laws apply to spouses. (This is distinct from private sector insider trading laws)
It's super easy, barely an inconvenience!
It’s not even about evidence of illegal actions, she’s a public official and part of her job is to build trust with the public.
This is why avoiding the appearance of impropriety is almost as important as avoiding impropriety itself. When you do things that people might reasonably mistake for unethical, it contributes to the perception that such unethical behavior is commonplace. That, in turn, might inspire others to actually behave unethically, or alternatively to despair that they live in such a society. Either is socially harmful.
What is unusual about her spouse buying TSLA options? I'd say that the TSLA CEO has been more influential over the TSLA price than any new legislation.
I don't know if you're using this as an argument to favor Pelosi, because this, if anything, is only another conflict of interest on top of where she's currently at.
The disclosure and use of insider information from public companies can get you in big trouble, even if you're married to the people involved.
There's a reason why CEOs (and the like) take HUGE caution measures when liquidating stock and try to involve family as least as possible.
http://www.ginsglobal.com/articles/80-of-us-fund-managers-un...
They should probably teach FIRE in high school, but of course not you got to keep everyone enslaved to debt and learning about ancient history.
Can you expand on this? The article indicates her one year returns were considerably higher than the S&P 500 last year.
Does that mean majority of CEOs of investment firms "top[ped] the list for investments" during that time?
That her investments do so well? That's another story.
Oops. They do.
If you don't think this gives rise to the appearance of impropriety, then what precisely does?
The U.S. infrastructure deal was unanimously supported by all members of the house, not just the speaker.
This type of uncertainty/doubt argument can go both ways. Her spouse lost money on that specific option call, so that could also be proof she didn't use her influence.
No it wasn't. By all members with a (D) after the name who she leads, perhaps, and some others, but not all.
> that could also be proof she didn't use her influence
I don't find this a compelling enough argument that it would likely restore the public's lost trust in these institutions.
What about reduced regulation of the franchise car dealership model at the federal level?
Those might have a 'lil bit of an effect.
Just because Elon Musk has more power over the stock does not exonerate her from buying potentially massively lucrative options on a stock that she has power to affect. My understanding is she is not under the same restrictions as a CEO would be when trading that ticker, and she also has entirely different incentives than CEO's do. CEO's have the incentive to make the company perform well because their compensation is tied to the share price. Nancy Pelosi in this case has the incentive to rule favorably for Tesla because her options will benefit from it. Those incentives are very very different.
But on Monday, when the president signed a bill reversing big pieces of the law, the emailed announcement was one sentence long. There was no fanfare last week either, when the Senate and then the House passed the bill in largely empty chambers using a fast-track procedure known as unanimous consent.
https://www.npr.org/sections/itsallpolitics/2013/04/16/17749...
It's exceptionally unlikely that I'll be able to spur meaningful change, but I'll try to have an update in December. (Posting for accountability)
just like when someone says "bill clinton repealed glass stegal" no he signed it when it was passed through by veto proof margins with only 2 people dissenting in the senate... he just happened to be the president at the time.
Such a tool was actually used to disrupt a rice panic once. Without releasing any surplus, an announced joint intent to release surplus drove speculators out of the market. https://www.npr.org/sections/money/2011/11/04/142016962/the-...
Politicians suggesting things impacts the market all the time.
Which is precisely the point of how illogical it is.