[HN Gopher] All controversial trades by Senators in the 2020 Con...
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All controversial trades by Senators in the 2020 Congressional
insider trading
Author : chetangoti
Score : 182 points
Date : 2021-06-05 16:13 UTC (6 hours ago)
(HTM) web link (www.reddit.com)
(TXT) w3m dump (www.reddit.com)
| tedunangst wrote:
| The "nothing ever changes" people are aware Perdue is now a
| former senator, right?
| [deleted]
| ta1234567890 wrote:
| And nothing will ever come of this
| boublepop wrote:
| That's what people said before every single change that ever
| happened.
|
| One thing is for sure, apathy never lead to any change.
| mkhpalm wrote:
| I like to remind people that its not really illegal if you
| can't get caught.
| blamazon wrote:
| 2 of the 4 senators in this analysis were voted out of office
| in 2020. I voted for their replacements because of this
| bullshit.
| ipaddr wrote:
| It is crazy they allow sitting senators to buy and sell personal
| stock and then we ask them to make laws that affect stock prices.
| Force all assets into a blind trust while they are sitting.
| sergiomattei wrote:
| If you assume the position that politicians are inherently
| evil, having them do their lucrative activities publicly is
| better than having things happen under the shadows.
|
| The problem is public scrutiny. We don't scrutinize this
| behavior enough. Where is the outrage?
| ashneo76 wrote:
| Not evil. Conflict of interest.
| 8note wrote:
| No, there's an evil tradeoff, and a non-evil tradeoff.
|
| One of the choices in the conflict of interests is bad.
| rapind wrote:
| Why would we assume they are "evil"? We disincentivize bad
| behaviour (in terms of societal impact) all the time. For
| example, automotive laws don't assume all vehicle owners are
| "evil".
| akiselev wrote:
| Is it? The last four years seemed like impunity under
| constant scrutiny.
| dragonwriter wrote:
| > The last four years seemed like impunity under constant
| scrutiny.
|
| Are you referring to the scandal ridden Administration
| where many officials went down in disgrace before the
| Administration itself was defeated?
| akiselev wrote:
| That's one way to look at it. My take is that the
| corruption became so brazen and insidious that the
| political class had to make some symbolic sacrifices.
|
| It's as if we had 100 "[visible] units of corruption" per
| year before the last administration, with 1 or 2 lost to
| enforcement or scapegoating and afterwards, we had 200
| "units" per year with 10 lost to enforcement or
| scapegoating. Sure, it went from 1-2% to 5% which is
| enough to drown out everything else in 24/7 cable
| newsrooms but in absolute terms, the
| cost/damage/perception of corruption doubled. (Speaking
| in abstract terms to illustrate an opinion, not real
| data)
| williesleg wrote:
| So smart and lucky!
| bko wrote:
| I've looked at these data before and I wasn't convinced [0].
| Primarily because the amounts were relatively small and even with
| insider info, it's not easy to forecast stock prices.
|
| For instance, take David A Perdue
|
| > David Perdue sold 44 times ($3.49 MM) in the 33 days following
| the closed senate meeting. Interestingly James Inhofe only
| transacted 8 times but the combined value of shares he sold was a
| whopping $4.12MM.
|
| According to his spreadsheet, Perdue had one sale worth 3MM of
| CLDX on 1/23/2020 at $86.82 and on 3/23/2021 (?) the spreadsheet
| states it was $29.49. Today the stock is $98.96, so if he had not
| sold he'd be up 13%. There's no indication that he bought the
| stock back. The rest of the trades were a few thousand, which are
| tiny for someone worth $15MM.
|
| You can play all sorts of games when you look at individual
| trades. I don't think politicians are above reproach, but I think
| it's incredibly difficult to get some information and be able to
| execute and time the market. If you told me on January 2020 that
| there would be a global pandemic for the next 1.5 years, I would
| never guessed the stock market would be up 15% in 2020!
|
| [0] https://mleverything.substack.com/p/analyzing-us-senators-
| st...
| mirker wrote:
| Even if insider information gives you a small percentage
| advantage over uninformed trading, that still increases
| expected gains unfairly. A hedge fund would probably be quite
| happy with a 5-10% signal over random chance.
| throwaaskjdfh wrote:
| The question isn't whether they used insider information well,
| it's whether they used insider information at all.
|
| Using information gained through their political office to
| inform their personal trading is improper, even if they lose
| money.
|
| Just because many of these trades are bad or useless in
| retrospect doesn't mean that didn't _try_ to profit from
| insider information.
|
| EDIT: And I don't buy the argument that the small size of the
| trades relative to wealth implies that they're not using
| insider information. Martha Stewart went to jail over a
| $230,000 trade [0] at a point when her net worth was likely
| hundreds of times that amount.
|
| [0] https://en.wikipedia.org/wiki/ImClone_stock_trading_case -
| interestingly the loss she avoided was only $45,673
| akiselev wrote:
| The crime isn't "beating the market," it's "insider trading"
| because it's supposed to be a level playing field for the good
| of the system and the people in it. It seems self defeating to
| decide the fairness of an unfair advantage by whether or not it
| panned out - which we don't even know.
|
| The cohort is so small that there's a fair chance that the
| (vast, even) majority of Congressmen are really bad at trading,
| just due to random variation. Who's to say that without that
| insider information, the politicians wouldn't be homeless? The
| control group - say, all the people who can but have no chance
| at entering politics ever - tends to be very, very bad at
| investing and does worse than the market.
| gabereiser wrote:
| Right. It's not whether he was successful or not, it's
| whether he used knowledge not disclosed to the public to make
| his decisions.
| bko wrote:
| > Who's to say that without that insider information, the
| politicians wouldn't be homeless?
|
| Homeless people don't generally make it to Senator. Most of
| these people have wealth from the beginning, which is
| unfortunately required to invest so much time and money to
| attain the office.
|
| You have to show that they used insider information to make
| trades. Most senators have immense wealth and make trading
| decisions based on circumstances. For instance, if they have
| a large tax bill or need money for an investment or money to
| send their children to college, they may sell some stock.
|
| I just don't buy the narrative that someone worth tens of
| millions is trading a few thousand here and there to make
| some small return relative to their wealth. It just doesn't
| make sense.
|
| You can decide that senators shouldn't be allowed to trade
| stocks, but again that's impractical for anyone of means. You
| have to actively buy and sell stocks to meet personal
| liquidity needs or rebalance your portfolio. I think it would
| make more sense to limit them to ETF purchases, much like
| most employees at US banks have to do.
| akiselev wrote:
| _> Homeless people don 't generally make it to Senator.
| Most of these people have wealth from the beginning, which
| is unfortunately required to invest so much time and money
| to attain the office._
|
| That was a bit of cheeky hyperbole that got in the way of
| my actual point. People in power have been recorded using
| insider information in a general sense for profit since at
| least the early Romans so at this point it's pretty much
| baked into society and any extant political/upper class
| structures. Without resetting the world to zero, we have no
| idea whether the selective pressures on that class
| structure "converge" with the rest of the population. For
| all we know, the advantages of intergenerational wealth and
| power instill beliefs and habits that over generations
| makes them worse investors on average, propped up by access
| to easy capital and inside info. Intuitively it would make
| them better investors on average, but even then random
| variations mean that the probability of a long streak of
| incompetent and immoral politicians isn't astronomical.
| Maybe people from the political class are predisposed to
| successful investing thanks to better education, or that
| might not be a factor at all and their success could be
| predicated on access to existing family connections and
| wealth to bootstrap into a position with access to insider
| information. None of that precludes a natural turnover
| where, whether by luck or meritocracy, outsiders become
| wealthy enough to enter the political class before
| returning to the mean (or worse), now propped up by new
| access to insider information. Question is whats the
| balance between the groups?
|
| At the end of the day, this is a bunch of vague
| generalizations (what is the "political class?") and there
| are a lot of selective pressure of unknown strength. The
| sample size is so small it's probably random anyway but I
| enjoy the speculation :) Thank you for reading my off topic
| rant
|
| _> I just don 't buy the narrative that someone worth tens
| of millions is trading a few thousand here and there to
| make some small return relative to their wealth. It just
| doesn't make sense._
|
| Regardless of the accuracy of my speculation, I don't buy
| that having X amount of money fundamentally changes human
| nature, especially when the characteristic in question
| (greed) provides a significant competitive advantage for
| suppressing one's conscience and attaining that X. I don't
| believe it changes people's knack for obsessing over
| matters that are trivial in the grand scheme of things, nor
| reduce envy or competitiveness. I'm sure there are many
| exceptions to these generalizations, but I don't believe
| many of them want to (or can) be politicians. Humans are
| humans so hope for the best and expect the worst but don't
| project motives or perspectives.
| dalbasal wrote:
| I agree, but I think the point (beside being entertainment for
| degenerates) is to show the extent to which such things are
| open to abuse. Insider trading on their own accounts is just a
| small example.
|
| In any case, the rally Purdue missed on wasn't related to
| information that he had special access to. The crash was.
| Beyond that, you can't attribute any given trade to any
| specific reasoning without an admission.
|
| You don't have to know everything, for insider trading to work.
| For the most part, it's about frontrunning
| news/reports/announcements with fairly predictable day 1
| impacts.
| bko wrote:
| I agree that it's prone to abuse and restrictions are
| reasonable. But that's different from saying that US senators
| are abusing insider information to make a killing in the
| market. People are being dishonest when looking at this data
| and are cherry-picking examples or choosing arbitrary dates
| for comparison. For instance, they focus on Kelly Loeffler
| selling CTRX but not buying Discovery around the same time
| just before a 50% drop in price. If she was trading on
| insider info, I would imagine she wouldn't buy Discover, a
| stock that's highly sensitive to consumer loans immediately
| before a spike in unemployment.
| dalbasal wrote:
| Well... this is WSB, not the NYT. They're looking to get in
| on the action, not prevent it.
|
| That said, speculation is all you got. Like conflict of
| interest, insider trading has to be dealt with "upstream"
| or not at all.
|
| >> If she was trading on insider info, I would imagine she
| wouldn't buy Discover, a stock that's highly sensitive to
| consumer loans immediately before a spike in unemployment.
|
| Insider trading is not about knowing what the prices will
| be in advance and trading on everything... counterexamples
| don't mean much. Travel related trades, in advance of
| travel restrictions and such are more typical. Even so,
| _not_ doing a trade means even less then the speculative
| implications I sorta make.
| tolbish wrote:
| Historically, what are actual pragmatic ways to bring lawmakers
| to justice when those lawmakers themselves have made it
| impossible to improve things by voting?
| dahfizz wrote:
| Tarring and feathering used to serve us pretty well.
| rjtavares wrote:
| I highly recommend Mike Duncan's "Revolutions" podcast,
| starting with season 3 (the French Revolution). It is really
| interesting to see how sometimes the even the threat of
| revolution brings change.
| jdikatz wrote:
| Agreed. Currently devouring the Russian revolution series:
| concrete decisions on reforms are made based on elite opinion
| of conditions on the ground, and arguments to sway those
| opinions can turn on seemingly minor events / personalities
| craftinator wrote:
| The French peasantry came up with a method that was effective.
| tclancy wrote:
| No one ever credits the Irishman behind it all. Gil O'Tyne.
| baybal2 wrote:
| > when those lawmakers themselves have made it impossible to
| improve things by voting?
|
| If things can get to this point despite full availability of
| functioning voting booths, you need to seek the problem with
| voters themselves.
|
| 2020 elections in US were historic because they set a record
| for the most voted candidate, _and the second most voted one_
| at the same time.
|
| You know all well who that second most popular candidate was,
| who didn't make it past the finish line by a shoestring.
| tolbish wrote:
| That implies that voting is a fair system and corruption like
| gerrymandering has no effect.
| tedunangst wrote:
| Correct, gerrymandering has no effect on senate races.
| tolbish wrote:
| That's not true at all. A lot of Americans vote based on
| former politicians' recommendations (e.g. endorsements
| from the president, respresentatives, or other elected
| officials), or they just vote straight down the party
| line.
|
| In addition to elections themselves, gerrymandering
| effects the demographic makeup of your region.
| tedunangst wrote:
| So how should we redraw state lines so that presidential
| endorsements don't affect gerrymandered senate races?
| jrockway wrote:
| Redrawing state lines to affect the makeup of the Senate
| is definitely something that's been considered. DC
| statehood is an example, so is the proposal to split
| California into two states. (Then there are less serious
| proposals, like New York City seceding from New York
| State.)
|
| Trust me, if there's a plan to make "your guy" win,
| someone has seriously considered it.
|
| It is also worth noting that redrawing lines like this do
| have some real benefits beyond just making a certain
| party have more representation. A lot of people live in
| DC, and it's pretty unfair that they don't have voting
| power in the federal government. The only reason they
| don't get representation is that 50% of people don't
| agree with the way they vote, and you need more than 50%
| to admit a state. It is very awkward.
| tolbish wrote:
| State lines? No. But there are many ongoing efforts to
| fight gerrymandering if you are interested.
|
| However, that is one piece. I'm not sure how effective
| that would be in the short/medium term.
| ta988 wrote:
| Which is also why parties are fighting to make sure some
| people can't vote by making it much more complex for them.
| stevenicr wrote:
| Assuming you mean some repub states making so you have to
| show an ID, signatures need to be verified for mail ins..
| limiting early votes from months to weeks or days..
|
| Not sure what is 'more complex'?
|
| Consider the opposite... everyone in State G gets sent a
| check for 2,000 - you could not require ID or signature
| to cash it.. that might not affect people at all - but it
| might get some to try to take and cash other folks check.
|
| Sometimes it helps me to consider reverse things to see
| if they still make sense.
|
| Admittedly I have not read every line of every bill to
| know if there are more complexity add-in issues being
| passed.. but I've tried to hear and consider the talking
| points from several different news portals.. some types
| of portals get very specific about things and compare
| them - other party's news portals just talk very broadly
| about how things are so much harder.
|
| let's throw a wrench in both party's plans - if you don't
| want to show an ID when you vote, or have your signature
| verified - then you don't have to if you did not cash
| your payoff check.
| Larrikin wrote:
| Are you willing to have your taxes raised to guarantee
| everyone in your state gets a state ID including workers
| similar to census workers that go around helping people
| with less than stellar English, missing documents, or
| with out access to the internet.
|
| Are you willing to have your taxes raised to fund
| government buildings that have reasonable hours similar
| to a retail store so that all people have access?
|
| Would you be willing to have your taxes raised to fund a
| national ID or give passports to everyone at birth or
| upon becoming a citizen with a technological
| infrastructure that would make it simple to replace.
|
| In my experience when it comes to dealing with any kind
| of government services, the hours are meant to punish and
| discourage people from coming.
|
| When I needed to actually do something in person at the
| social security office they had ridiculous hours like
| closing at 3 or 4 and if you're lucky would open an hour
| or two before regular working hours, which would have
| masses of people in line if you weren't there an hour
| before. They exist to punish those who don't even want to
| be there but need to be.
|
| ID requirements without the infrastructure is just a good
| way to make sure that certain people can't vote. The laws
| never come with any way of making it easier to get an ID
| stevenicr wrote:
| -"willing to have your taxes raised to guarantee everyone
| in your state gets a state ID" -- yes, and the amount
| would not be much at all. I would also redirect all
| county and state tickets money to double the hours these
| places are open - and it may not raise taxes at all - in
| fact calculate the taxes lost as 1500 people per day need
| to take a day off work - it'll be a reverse wash.
|
| the state should provide these docs free of charge no
| matter how they are paid for.
|
| "o fund government buildings" this is changing - we now
| have digital kiosks in police stations and other places
| that can do most of the dmv work - many services no human
| required, some video conference.. no new building needed.
| Heck lyft can run a million dollar company out of the
| corner of a pep boys - surely there are more ways to
| provide more servicing without more buildings.
|
| "when it comes to dealing with any kind of government
| services, the hours are meant to punish and discourage
| people from coming." - this is something we the people
| can demand change and actually make it happen.
|
| Of course to save from blowing out state budgets we need
| to rehash how pensions and 401's with state workers are
| handled - if they continue to shake down the system like
| the post office, then the slow service is mainly to pad
| lifetime retirement gov cheese - regardless.
|
| "the social security office" here in my city last two
| visits has been very efficient - not sure the hours - but
| they can be run well - and hours could be extended easily
| if we further pursue the kind of video tech in ATM
| machines and similar. We can demand more infrastructure
| for id requirements - especially easy if there is no
| driver test needed - which for an ID it is not. Scaling
| the driving testing is quite challenging and not such an
| easy fix.
|
| Like I alluded to in my original comment, if you can cash
| a 2,000 check you already have the Id and whatever you
| need to vote in the most stringent voting law place.
| afaik.
|
| I've seen many people point to GA as hardcore voting
| 'restrictions' place and make similar points about costs
| - I just looked at their info, it says an ID card for 8
| years may be $32, yet they offer a free one if it just
| for voting, and if you are indigent they offer a $5
| option which may be waived and billed to/paid for by a
| shelter.
|
| I do not care for the 'Real ID' requirements and feel
| that is a hurdle - but that is from the feds, and it
| sucks - because having 2 docs say you live somewhere is
| not easy if you are roommates - but that is not a state
| mandating voting restriction - it's a dumb thing the feds
| are trying to get pinpoint proof of location for many
| people before they get checked to get on planes, and who
| knows what else.
|
| I am a 'no new tax ever' kind of person - so I feel the
| sentiment you raise, yet find when it comes to rights we
| have no choice but to provide what is needed from the
| state.
|
| Luckily many tech things, and the ability for people to
| more easily petition for expanded hours and such - it
| looks like these things will be getting easier and
| cheaper as time goes on.
|
| editing to add link to Ga Id fees I found / referenced in
| comment - https://dds.georgia.gov/identification-cards-
| fees
| toast0 wrote:
| Have you considered the difficulty of obtaining an ID if
| you don't have one?
|
| That is very complex, and out of reach for some.
| hokumguru wrote:
| Fun fact that somewhat swayed my opinion recently, we are
| essentially the only first world country that doesn't
| require ID of some kind to vote.
| morsch wrote:
| In Germany, you're required to submit your address of
| residence to a municipal office. When there's an
| election, you'll get a notification sent to this address.
| At your assigned polling station (which, at least for
| city dwellers, is usually within walking distance), you
| can just show the notification, no ID required. Or, if
| you forgot the notification card, you can show your ID,
| that works, too.
| stevenicr wrote:
| yes - I have helped a half dozen people get ID the past
| couple years.
|
| Unfortunately you need one to cash checks and do all
| sorts of important things - and it's a good way to
| prevent fraud / theft / underage activities, etc.
|
| The good thing is that I've been seeing digital kisoks
| popping up at more locations that can handle this sort og
| thing, and take some of wait times away from the main dmv
| places.
|
| Not long ago my city also opened up all county clerk
| desks and some other places to help people get the 'real
| ID' stuff together and submitted.
|
| So there is progress in making it easier / better /
| cheaper.
|
| That being said - if you are from one state to another
| and license was expired and you have to get special
| papers to show a divorce and name change - le suck!
|
| If you have roommates and don't have utility bills in
| your name for Real Id - what a stupid setup the feds came
| up with no-fly plane with real proof you are Real..
|
| I expect more people to come up with more ways to make
| these things better.
|
| I expect to see more places like GA offer ID for free for
| voting, only $5 for indigent people.
|
| It can be complex in weird situations, but I believe for
| most people it's just not as much fun as playing a
| playstation. I have seen it out of reach for a 70 year
| old divorcee' - but we all finally found a way to get the
| docs needed from another state and it all came together
| finally - most people would not have the same kind of
| problem however, I'd guess 99.5%
| whateveracct wrote:
| This is a well-trodden topic. Maybe you should ask
| questions instead of spout answers :thonk:
| tamaharbor wrote:
| Almost every other democratic country in the world has
| some form of voter ID. Why is the United Stated one of
| very few exceptions?
| creato wrote:
| Insider trading was already made illegal once:
| https://en.wikipedia.org/wiki/STOCK_Act
|
| We could just vote for politicians like those that passed that
| law the first time around.
|
| Defeatism in politics is really annoying. The last several (and
| ongoing) serious attempts at extra-political change in this
| country are likely the polar opposite of what you want. Be
| careful what you wish for.
| tolbish wrote:
| That's a bit of a nonsensical argument. You fear extra-
| political change because you assume the worst. And whatever
| it is you're afraid of, there is more alternatives than that
| to make change. Aside from that, you suggested voting...
| _which is exactly what was attempted to make insider trading
| illegal in the first place_.
| creato wrote:
| > Aside from that, you suggested voting...which is exactly
| what was attempted to make insider trading illegal in the
| first place.
|
| ... And succeeded. That was the whole point.
| bedhead wrote:
| "Controversial" has no meaning in this context and I dislike the
| framing. Insider trading is defined as both material and non-
| public. The notion that a senate briefing about COVID by some
| random person about their _personal opinion_ on what _might_
| happen doesn 't even come close to qualifying as material.
| Nowhere close, not even in the universe of material. People might
| not like it, but not only were these stock sales 100% legal, they
| weren't even controversial.
| hartator wrote:
| The thing they will decide policies that will influence
| markets. So it's material and non-public if they make trades
| before an announcement.
| kortilla wrote:
| Nope. That's not enough.
|
| This happens many times a year with company buyouts where
| many shares are accumulated first, then a buyout is
| announced, which boosts the share price further.
| ProjectArcturis wrote:
| The Senate is never briefed by "some random person." These were
| expert virologists and epidemiologists testifying in a closed
| door session. Absolutely material, absolutely nonpublic.
| Absolutely obscene that Burr in particular would publicly say
| that everything is fine while selling off most of his stocks.
| reasonabl_human wrote:
| They weren't given financial data from company execs...
| instead a research report on pathology / virology. Cut and
| dry, not insider trading. Vote to pass new / other
| legislation if it bothers you that politicians can trade
| stocks freely.
| ViViDboarder wrote:
| Sorry, that's not how it works. The people who are doing it
| are the ones that can vote to pass new / other legislation.
| kortilla wrote:
| Unless the information is from someone with a fiduciary duty
| to the company, it does not count as insider trading.
|
| Information that will impact a company or many companies that
| is the result of research is _never_ insider trading, at
| least not by any legal definition.
|
| Millions of investors do private analysis on things that
| could impact securities, trade on that info, and share that
| info with others to trade on. Just being information not
| publicly available doesn't make it "non-public" for the legal
| definition of "material non-public information".
| ProjectArcturis wrote:
| The fact that this behavior may not meet the legal criteria
| for an insider trading charge does not make it morally
| right.
| kennywinker wrote:
| You're really fixating legal definitions on insider
| trading. Oddly enough, we're discussing the activities of
| the people WHO MAKE THOSE DEFINITIONS.
|
| I think most americans are pretty uncomfortable with our
| leaders profiting off their own decisions and information
| they have access to but we don't. Those briefings were
| private. It's also deeply troubling that they were saying
| one thing, and privately doing another
| LatteLazy wrote:
| It's "controversial" because people don't like when politicians
| use their positions to make private profits. That it isn't
| insider trading in the strictly legal sense doesn't really
| change that it is questionable behaviour...
| lgats wrote:
| feed of senate stock disclosures https://sec.report/Senate-Stock-
| Disclosures
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(page generated 2021-06-05 23:01 UTC)