Paul Ryan - insider trading from a Fed briefing

Duck Soup

Paul Ryan sold shares on same day as private briefing of banking crisis.

Vice-presidential candidate denies he profited from a 2008 meeting with Fed chairman in which officials outlined fears for financial crisis.

Paul Ryan, Mitt Romney's vice-presidential running mate, sold stock in US banks on the same day he attended a confidential meeting where top level officials disclosed the sector was heading for a deep crisis.

Public records show that on the same day as the meeting, Ryan sold stock in troubled banks including Wachovia and Citigroup and bought shares in Goldman Sachs, Paulson's old employer and a bank that had been disclosed to be stronger than many of its rivals.

http://www.guardian.co.uk/world/2012/aug/13/paul-ryan-sold-shares-banking-crisis

This story's not going to go away any time soon.

expectationlost

already debunked

20Cent

The debunking refers to the fact that the meeting was in the evening and Ryan sold his shares in Citigroup and JP Morgan then put the money into Goldman Sachs that morning.

This assumes that he only got the information at the meeting not before it. Even being invited to a meeting with Ben Bernanke, Hank Paulson, Nancy Pelosi, John Boehner and Harry Reid would set off alarm bells that something serious was up. Do you think he might have wondered whats this about, would he make some calls? Who knows if he was tipped off regarding what the meeting was going to be about?

You need to believe that the trading algorithm made such a great trade just hours before those companies tanked and that Ryan had no idea what this meeting he was going to was about!! Any meeting I've ever been to has an agenda ffs. Even if no agenda was sent it would be clear that some serious sh1t was about to hit the fan. Also it requires one to believe that Boehner wouldn't have discussed it beforehand with Ryan the Chair of the Budget committee.

Giving him the benefit of the doubt its still an amazing coincidence!

Eliot Rosewater

20Cent wrote: »

This assumes that he only got the information at the meeting not before it. Even being invited to a meeting with Ben Bernanke, Hank Paulson, Nancy Pelosi, John Boehner and Harry Reid would set off alarm bells that something serious was up.

Just to tease out your theory: even if we accept that Paul Ryan knew about the content of the meeting in advance, how is it that he knew exactly which shares to sell (Citybank) and which shares to buy (Goldman Sachs)?

Duck Soup

expectationlost wrote: »

already debunked

And then the debunking was debunked.

http://delong.typepad.com/sdj/2012/08/yes-paul-ryans-flacks-snookered-benjy-sarlin-republicans-lie-all-the-time-about-everything-blogging.html

To quote Brad de Long:

There is no way in hell - if you are rebalancing to try to track the Russell 1000 index - you make only 58 trades in a year, that you make 27 of those 58 in large money-center banks, and that 10 of those trades involve shifting your money from Citi to Goldman and back five times.

No way in hell.

I don't know what was going on. But it appears that Ryan's flacks are - for some reason - simply making shít up.

In other words, if you are using a broadly-based index fund working on an automatic algorithm, why are there are a relative handful of trades, about half of them involving major financial institutions of which Ryan had privileged information?

De Long now appears to accept that the explanation was accepted (himself included) without looking at the trading patterns closely.

Like I said, this one isn't going away.

Atlantis50

Duck Soup wrote: »

And then the debunking was debunked.

http://delong.typepad.com/sdj/2012/08/yes-paul-ryans-flacks-snookered-benjy-sarlin-republicans-lie-all-the-time-about-everything-blogging.html

To quote Brad de Long:



In other words, if you are using a broadly-based index fund working on an automatic algorithm, why are there are a relative handful of trades, about half of them involving major financial institutions of which Ryan had privileged information?

De Long now appears to accept that the explanation was accepted (himself included) without looking at the trading patterns closely.

Like I said, this one isn't going away.

Brad Delong is a liberal hack. Why should he be trusted as an objective source to do 'debunking'?

20Cent

Atlantis50 wrote: »

Brad Delong is a liberal hack. Why should he be trusted as an objective source to do 'debunking'?

Whats your explanation for it then?
Coincidence?

Duck Soup

Atlantis50 wrote: »

Brad Delong is a liberal hack. Why should he be trusted as an objective source to do 'debunking'?

You say liberal hack, others would say Professor of Economics at University of California, Berkeley. Note also that the initial 'debunking' came from the Romney-Ryan campaign itself, which is the very definition of party hackery.

The points DeLong and others raise remain. If it's automatic trading based on algorithms from a Russell 1000 fund, then (a) why aren't there many more trades across a broad spectrum of the top 1000 publicly quoted companies and (b) how did the automatic algorithms decide to shuffle money repeatedly between Citigroup and Goldman Sachs?

If it made sense to me - or I heard a reasonable explanation as to why automatic algorithms would become fixated on poorly performing banking stocks, giving poor returns - I would acknowledge that explanation explained the appearance of impropriety.

As it is, the most reasonable explanation is that Ryan was a (pretty lousy) hack day trader. He then got wind of what was rumoured to be in the pipeline in the banking sector and who was likely to fall and who to come out stronger. The day before the Fed briefing - with as much certainty as he could get without Bernanke telling him directly to his face - he dumped all his positions in Citigroup, Wachovia etc and went all in on Goldman Sachs.

Note that at the time as these trades were taking place, it wasn't illegal for politicians to use information gleaned from their work in Washington to benefit their portfolios. Nancy Pelosi did something similar with credit card stocks, as did countless others.

The difference is they're not running for vice-president and they've all acknowledged that the trades they made were deliberate and based on information arising from their political positions.

Channel Zero

Duck Soup wrote: »

Nancy Pelosi did something similar with credit card stocks, as did countless others.

That would seem to be the case alright.

Back in 2004, a study* considered by academics to be the baseline work in the field was published by researchers at four universities. These researchers, Alan Ziobrowski of Georgia State among them, found that during the boom years of 1993-'98, a majority of US senators were trading stocks -- and they were beating the market by 12 percentage points a year on average. Corporate insiders, on the other hand, only beat the market by 5 percent, and typical households underperformed by 1.4 percent. Interestingly, there were no differences found between Democrats and Republicans.
http://www.alternet.org/story/154189/can_rep._bachus_and_his_money-crazed_congressional_colleagues_be_stopped_from_insider_trading

Be like Nutella

I would be biased towards Dems and against Paul Ryan himself as I personally don't like the guy although he is clearly one of the smartest guys in the room (on the Rep side anyway) but this all seems too obvious and although it wasn't illegal the Dems and the fairly left leading media giants are going to drag this out I assume for weeks... as they should IF what happened can be proven... enough.

I actually think Paul Ryan has some dangerous ideals that he wants to realize and he's a young driven man with huge support on the right so I'd personally like to see him stopped in his tracks before he actualizes some extreme stuff... kinda reminds of a young Wolfowitz !

That IT WASN'T illegal at the time.. is just beyond comprehension... every congressman, Aide, Senator, Governor and those on subcommittees and oversight committees in Washington should provide the SEC with a whole lot of data when they start so that every one of them can be scrutinized at any given time to check for what is essentially direct insider trading and it's been going on for decades. Pure Corruption. Imagine the data you could gleam from analysing stock moves by those in Washington over the last decade? I'd say hundreds are guilty but that's just an opinion.

Amerika

Duck Soup wrote: »

Note that at the time as these trades were taking place, it wasn't illegal for politicians to use information gleaned from their work in Washington to benefit their portfolios. Nancy Pelosi did something similar with credit card stocks, as did countless others.

The difference is they're not running for vice-president and they've all acknowledged that the trades they made were deliberate and based on information arising from their political positions.

Not agreeing with you, but interesting that you draw a value line. So it’s okay for the Speaker of the House (third in line succession to the presidency) to do, but not okay for someone who could one day be vice president (second in line)? Would your argument preclude anyone who benefited from such information in a political position from ever running for president or vice president?

Permabear

This post has been deleted.

Valmont

Could someone look at this timeline and tell me the writing was not already on the wall.

There is too much evidence of corruption in American politics to try and make something weak like this stick.

edit: I'm still waiting for someone to try and rubbish Ayn Rand on the back of his VP announcement...

Permabear

This post has been deleted.

20Cent

Valmont wrote: »

Could someone look at this timeline and tell me the writing was not already on the wall.

There is too much evidence of corruption in American politics to try and make something weak like this stick.

edit: I'm still waiting for someone to try and rubbish Ayn Rand on the back of his VP announcement...

Didn't Paul Ryan rubbish her?

Mjollnir

Valmont wrote: »

Could someone look at this timeline and tell me the writing was not already on the wall.

There is too much evidence of corruption in American politics to try and make something weak like this stick.

edit: I'm still waiting for someone to try and rubbish Ayn Rand on the back of his VP announcement...

Really?

Duck Soup

Amerika wrote: »

Not agreeing with you, but interesting that you draw a value line. So it’s okay for the Speaker of the House (third in line succession to the presidency) to do, but not okay for someone who could one day be vice president (second in line)? Would your argument preclude anyone who benefited from such information in a political position from ever running for president or vice president?

I don't draw a value line. I draw an honesty line and make an observation on the political ramifications.

As I said, at the time Ryan, Pelosi and a few hundred others were profiting from privileged information, it wasn't illegal to do so. As is so often the case in politics, it's not the initial action that damns you, but the lies you put on top of it.

People can sometimes forgive a transgression, but it's rare (Bill Clinton was one of the few who could get away with it) to survive politically with a straight-out lie to the public.

Even just a week into his part in the campaign, Ryan's proved himself less than clear on the share dealings and a stone-cold liar on asking for stimulus funds when he said he hadn't asked for any.

It goes to the very character of the two people on the Republican ticket. Romney has previously been caught lying, during his run for governor of Massachusetts, saying he paid taxes as a Massachusetts resident when in fact his tax returns had him as a resident of Utah.

The problem is if Romney lied about being registered as a Massachusetts resident on his tax returns in 2002, why should anyone believe about his "you'll have to take my word for it" line about his tax returns in 2012?

If Ryan lied just this week about asking for $21m in stimulus funds for his district, why should anyone believe him about when he says he wasn't using inside information to improve his shares portfolio?

None of this is illegal - although the Guardian is now putting forward the theory that Romney may have voted in a Massachusetts election while registered as resident elsewhere, which is voter fraud and liable to prosecution - but as American political commentators say, it's 'bad optics'.

http://www.guardian.co.uk/commentisfree/2012/aug/17/mitt-romney-tax-returns-voter-fraud-theory

MadsL

Valmont wrote: »

edit: I'm still waiting for someone to try and rubbish Ayn Rand on the back of his VP announcement...

20Cent wrote: »

Didn't Paul Ryan rubbish her?

At an Atlas Society meeting celebrating Ayn Rand's life in 2005, Ryan said that "The reason I got involved in public service, by and large, if I had to credit one thinker, one person, it would be Ayn Rand",[18] and "I grew up reading Ayn Rand and it taught me quite a bit about who I am and what my value systems are, and what my beliefs are. It’s inspired me so much that it’s required reading in my office for all my interns and my staff."[19]

In response to criticism from Catholic leaders, in 2012 Ryan distanced himself from Rand's Objectivist philosophy, telling National Review that while as a young man he became interested in economics because of her novels, "It’s a big stretch to suggest that a person is therefore an Objectivist... I reject her philosophy. It's an atheist philosophy. It reduces human interactions down to mere contracts and it is antithetical to my worldview. If somebody is going to try to paste a person's view on epistemology to me, then give me Thomas Aquinas. Don't give me Ayn Rand."[20]

Removed from Wikipedia - Quoted for truth above.

Here's my original post. I guess the GOP wasted no time getting Wikipedia 'corrected' once the announcement was made.

poeticseraphim

Even right wingers should suspect his ability to contribute to a govt that could regulate an economy enough to prevent fraud.

It would be weak govt.

Not that Obama is much better.

On balance he shows little in the way of reform just cuts and that is really what both the public sector and private sector in the US needs.

The US spends more on healthcare than any other EU country by % of GDP, it is not funding that makes healthcare an issue but structure and performance.

The US is in many ways more socialized than other examples in terms of the amount of funding it gives.

It does appear his budget greatly improves things for people like himself ..he may not have acted illegally but he did use his position to his own financial benefit....and that is how many see his budget ...it makes cuts ..and yes cuts are necessary ...with little reform being demanded from the public or private sector ..it just slashes things it does not demand changes in practises which allowed their budgets to soar in the first place...how could voters trust a man who acted this way to tackle things like the libor scandl etc and prevent it..

It exposes him and his character.

Amerika

Duck Soup wrote: »

I don't draw a value line. I draw an honesty line and make an observation on the political ramifications.

As I said, at the time Ryan, Pelosi and a few hundred others were profiting from privileged information, it wasn't illegal to do so. As is so often the case in politics, it's not the initial action that damns you, but the lies you put on top of it.

People can sometimes forgive a transgression, but it's rare (Bill Clinton was one of the few who could get away with it) to survive politically with a straight-out lie to the public.

Even just a week into his part in the campaign, Ryan's proved himself less than clear on the share dealings and a stone-cold liar on asking for stimulus funds when he said he hadn't asked for any.

It goes to the very character of the two people on the Republican ticket. Romney has previously been caught lying, during his run for governor of Massachusetts, saying he paid taxes as a Massachusetts resident when in fact his tax returns had him as a resident of Utah.

The problem is if Romney lied about being registered as a Massachusetts resident on his tax returns in 2002, why should anyone believe about his "you'll have to take my word for it" line about his tax returns in 2012?

If Ryan lied just this week about asking for $21m in stimulus funds for his district, why should anyone believe him about when he says he wasn't using inside information to improve his shares portfolio?

None of this is illegal - although the Guardian is now putting forward the theory that Romney may have voted in a Massachusetts election while registered as resident elsewhere, which is voter fraud and liable to prosecution - but as American political commentators say, it's 'bad optics'.

Ahhhhh okay, but how about answering the question this time.

"Would your argument preclude anyone who benefited from such information in a political position from ever running for president or vice president?"

Or would it have been better if I asked if it only precluded Republicans from ever running?

Permabear

This post has been deleted.

Duck Soup

Amerika wrote: »

Ahhhhh okay, but how about answering the question this time.

"Would your argument preclude anyone who benefited from such information in a political position from ever running for president or vice president?"

Or would it have been better if I asked if it only precluded Republicans from ever running?

Apologies, I thought I had answered the question. I'll distill it down for you in the interests of clarity: benefiting from such information doesn't preclude anyone from anything - including running for vice president or president - because it's not illegal [or to be more precise, it wasn't previously but it is now].

However, and I'll be much more succinct this time, (a) it looks like shyte to the voters and (b) fess up ASAP if you want to minimize the issue.

On its own, it's not a dealbreaker with the electorate. But if it becomes part of a broader narrative about you as a candidate being less than candid, it can be damaging.

Amerika

Duck Soup wrote: »

Apologies, I thought I had answered the question. I'll distill it down for you in the interests of clarity: benefiting from such information doesn't preclude anyone from anything - including running for vice president or president - because it's not illegal [or to be more precise, it wasn't previously but it is now].

However, and I'll be much more succinct this time, (a) it looks like shyte to the voters and (b) fess up ASAP if you want to minimize the issue.

On its own, it's not a dealbreaker with the electorate. But if it becomes part of a broader narrative about you as a candidate being less than candid, it can be damaging.

Okay, then I guess what Vice-President Biden did was much worse and shytier (although not illegal) than what Ryan supposedly did, as Biden provided inside information to an outsider... his son Hunter, in order to increase the family fortune?