Last week with much fanfare House Majority Leader Eric Cantor pulled out of the negotiations on the debt ceiling. He said it was all the Democrats fault because they insisted that revenues had to be raised. Apparently stomping his feet and holding his breath until he turned blue wasn’t working. Could Cantor have another motive for pulling out of the talks besides love of rich people and hatred of taxes?
Last year the Wall Street Journal reported that Cantor, the No. 2 Republican in the House, had between $1,000 and $15,000 invested in ProShares Trust Ultrashort 20+ Year Treasury EFT. The fund aggressively “shorts” long-term U.S. Treasury bonds, meaning that it performs well when U.S. debt is undesirable. (A short is when the trader hopes to profit from the decline in the value of an asset.)
According to his latest financial disclosure statement, which covers the year 2010 and has been publicly available since this spring, Cantor still has up to $15,000 in the same fund. Contacted by Salon this week, Cantor’s office gave no indication that the Virginia Republican, who has played a leading role in the debt ceiling negotiations, has divested himself of these holdings since his last filing. Unless an agreement can be reached, the U.S. could begin defaulting on its debt payments on Aug. 2. If that happens and Cantor is still invested in the fund, the value of his holdings would skyrocket.
“If the debt ceiling isn’t raised, investors would start fleeing U.S. Treasuries,” said Matt Koppenheffer, who writes for the investment website the Motley Fool. “Yields would rise, prices would fall, and the Proshares ETF should do very well. It would spike.”
Gee, what a coincidence, Proshares ETF stock is up more than 3% since Cantor tanked the talks. By now we’ve all heard the Republican presidential candidates with their gloom & doom about America’s future. Democrats have carefully tip-toed into saying perhaps Republicans want to sabotage the economy on purpose. Until now it looked like the motive was to get rid of the president, but could personal financial gain be another one?