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Why A Hedge Fund Comprised Of Junior Congressional Democrats Should Outperform The Market By 9%

Tyler Durden's picture





 

That insider trading in Washignton occurs with a greater frequency than at Galleon is no secret. Courtesy of various loopholes, members of both the House and Senate have long been allowed to trade on inside information, something that grabbed the media's attention when back in November 2005 someone, somewhere sent the stock of USG Corp., W.R. Grace & Co., and Crown Holdings higher even though there was no public information. Only later would it become known that then-Senate Majority Leader Bill Frist would deliver a speech announcing new legislation to relieve companies of asbestos litigation. Subsequent studies (such as Ziobrowski et al's 2004 paper “Abnormal Returns from the Common Stock Investments of the United States Senate.”) confirmed substantial market outperformance by members of Senate. A few days ago, Ziobrowski et al, have released a follow up study "Abnormal Returns From the Common Stock Investments of Members of the U.S. House of Representatives" which confirms that not only do congressional critters consistently outperform the market, but does a granular analysis of just who it is in congress that should consider leaving the public arena, and raising capital to start their own hedge fund: simply said, junior, democratic congressmen beat the market by roughly the same amount, with the same consistency (and probably with the same Sharpe ratio) that allows SAC to charge 3% and 35%.

In a nutshell, the latest stereotype is that if one is a junior democrat in Congress, and one trades for their own discretionary account, one most likely is doing so using insider information.

From the authors:

We find that stocks purchased by Members of the U.S. House of Representatives earn statistically significant positive abnormal returns. The returns outperform the market by 55 basis points per month (over 6% annually). As additional evidence of information advantage, the trade-weighted portfolio of purchased stocks significantly outperforms the equal-weighted portfolio indicating that Representatives invested much larger amounts in those stocks that performed best. The regression coefficients also suggest that House Members favor the common stocks of smaller growth companies with slightly above-average risk.

Who is a better daytrader: republican or democrat?

When stock purchases are equal-weighted we find no significant abnormal returns for either Democrats or Republicans. When the  portfolios are tradeweighted, the samples of both Democrats and Republicans produce positive, statistically significant CAPM alphas. Only the Democratic, trade-weighted portfolio yields a significant positive Fama-French alpha. Furthermore, the nested test for significance of party affiliation indicates that the Democratic sample significantly outperformed the Republican sample. The Democratic sample beat the market by 73 basis points per month (nearly 9% annually) versus only 18 basis points per month (approximately 2% annually) for the Republican sample.

One explanation for this bias:

Given the almost folkloric belief that Wall Street invariably favors Republicans, the superior performance of trades made by Democratic Representatives may seem surprising. However, it should be noted that Democrats controlled the House for 10 of the 17 years covered by this study. Furthermore, Democrats were deeply entrenched in the leadership of the House for decades prior to the study. Thus when Republicans finally took control in 1995, they arguably had far less experience at handling the reins of power and may therefore have been unable to immediately enjoy all its perquisites.

Additionally, greedy junior politicians are more adept at "beating" the market than more senior ones.

In addition, stocks purchased by Democratic Representatives significantly outperform stocks purchased by Republican  Representatives. Stocks purchased by Representatives with the least seniority significantly outperformed stocks purchased by Representatives with the most seniority.

The explanation: risk versus return:

Again we find this result counterintuitive. In theory, Representatives with the most seniority possess the most power and thus should have the greatest opportunity to trade with an informational advantage. However, although the most senior Members may have the most opportunity, they may lack the strongest motive. It is no secret that money is the lifeblood of politics. Whereas Representatives with the longest seniority (in this case more than 16 years), have no trouble raising funds for campaigns, junkets and whatever other causes they may deem desirable owed to the power they wield, the financial condition of a freshman Congressman is far more precarious. His or her position is by no means secure, financially or otherwise. House members with the least seniority may have fewer opportunities to trade on privileged information, but they may be the most highly motivated to do so when the opportunities arise.

The conclusion.

In sum, the findings from this study of the U.S. House of Representatives’ common stock transactions are generally supportive of the previous study of the U.S. Senate. We find strong evidence that Members of the House have some type of nonpublic information which they use for personal gain. That having been said, abnormal returns earned by Members of the House are substantially smaller  than those earned by Senators during approximately the same time period. These smaller returns are due presumably to less influence and power held by the individual Members. The nature and source or sources of information is unknown, but clearly further research is warranted. We recommend that congressional committees should be studied for abnormal returns and indications that members of those committees may favor stocks in industries their committees oversee. Abnormal returns associated with the common stocks of specific industries or companies should be investigated for patterns of potential misconduct. We suggest the examination of the relationships between campaign contributions, common stock acquisitions, and abnormal returns.

In other words, everyone is trading on inside information, but nobody more so than those who write the laws that determine just what is considered Insider information, and the penalties associated with it. In the meantime, let the public lynching spectacles of such prominently irrelevant fund managers as Raj Raj continue: the people need their bread and circuses. Especially as fund of funds round up all junior democrats and start roadshowing them to yield-hungry QIPs.

Full report:


Abnormal Returns

 


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Sun, 05/29/2011 - 00:37 | Link to Comment Ahmeexnal
Ahmeexnal's picture

Off with their heads!!!!

Endgame is fast approaching:

http://www.prisonplanet.com/when-faith-in-u-s-dollars-and-u-s-debt-is-de...

Sun, 05/29/2011 - 02:08 | Link to Comment I am Jobe
Sun, 05/29/2011 - 10:02 | Link to Comment 66Sexy
66Sexy's picture
"When you see that trading is done, not by consent, but by compulsion—when you see that in order to produce, you need to obtain permission from men who produce nothing—when you see that money is flowing to those who deal, not in goods, but in favors — when you see that men get richer by graft and by pull than by work, and your laws don't protect you against them, but protect them against you—when you see corruption being rewarded and honesty becoming a self-sacrifice—you may know that your society is DOOMED." - Ayn Rand Atlas Shrugged
Sun, 05/29/2011 - 11:05 | Link to Comment Muir
Muir's picture

 Ayn Rand: the intellectual patroness of wannabe dickheads, professional amateurs, miseducated autodidacts, soi-disant contrarians, aging arrested adolescents, and subliterate cognoscenti.

Sun, 05/29/2011 - 11:28 | Link to Comment ColonelCooper
ColonelCooper's picture

Doesn't make the quote any less relevant.

Sun, 05/29/2011 - 14:15 | Link to Comment Quixotic_Not
Quixotic_Not's picture

Rule #1:

Never respond to trolls that dissemble while using meat-on-a-hook avatars to appeal to the base nature of uninitiated ZH viewers...

Sun, 05/29/2011 - 17:33 | Link to Comment ColonelCooper
ColonelCooper's picture

Not everyone who disagrees with one's point of view is a troll.  If Muir (who has been here a LONG effing time btw) has a trollish side, it certainly isn't overbearing to the point that I even picked up on it.  Rand has a most devoted following among some of her readers.  Some simply take it as a good book with some rather ironic prophesizing.  Others think it is over written drivel.

I tend to fall somewhere in the middle of all three camps. 

But thanks for the lesson. 

 

Sun, 05/29/2011 - 11:34 | Link to Comment Smiddywesson
Smiddywesson's picture

" Ayn Rand: the intellectual patroness of wannabe dickheads, professional amateurs, miseducated autodidacts, soi-disant contrarians, aging arrested adolescents, and subliterate cognoscenti."  - Muir

Listen to the guy with the bouncing boobs for his avatar.  That's a tell for real intelligence.  LOL

No offense Muir, just joking, but the left attack Ayn Rand so much, I avoid those debates.  Politics is a game to hide the real game, taking money from the weak and ignorant by force.


Sun, 05/29/2011 - 12:05 | Link to Comment Muir
Muir's picture

-

There!!!

-

Sun, 05/29/2011 - 12:47 | Link to Comment Smiddywesson
Smiddywesson's picture

LOL, +2

Sun, 05/29/2011 - 13:37 | Link to Comment Pegasus Muse
Pegasus Muse's picture

A most enlightening documentary. 

The Money Masters - How International Bankers Gained Control of America

 "The powers of financial capitalism had a far-reaching plan, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole...Their secret is that they have annexed from governments, monarchies, and republics the power to create the world's money..." THE MONEY MASTERS is a 3 1/2 hour non-fiction, historical documentary that traces the origins of the political power structure that rules our nation and the world today. .... " 

http://video.google.com/videoplay?docid=-515319560256183936#

Sun, 05/29/2011 - 00:39 | Link to Comment CrownThomas
CrownThomas's picture

Really, "off with their heads" -- wow.

Sun, 05/29/2011 - 08:56 | Link to Comment Long-John-Silver
Long-John-Silver's picture

When the US Dollar becomes confetti the TEA Party will be replaced by the Guillotine party.

Sun, 05/29/2011 - 00:43 | Link to Comment Quixotic_Not
Quixotic_Not's picture

Objectivism says there are only two kinds of people in this world; creators and parasites.

Sun, 05/29/2011 - 00:51 | Link to Comment Jasper M
Jasper M's picture

Oddly, so does Marxism. Or maybe not so oddly. 

"Us" is always much better defined in the presence of a "Them". Thus those seeking to unify a cult, er, belief system gravitate towards such dichotomies. 

as for the Congresscritters, LBJ famously defined the diferennce between House and Senate as "chicken salad, and chicken shit" – but seems to me a reliable 9% ain't chicken shit. Or even chicken feed. 

Sun, 05/29/2011 - 09:46 | Link to Comment tmosley
tmosley's picture

Not exactly.  Marxism divides the rich from the poor.  Thing is, there are both poor and rich creators, and poor and rich parasites.  Further, his proposals allow the parasites to take over at ALL levels.

This topic was covered extensively by FOFOA, in what is my favorite commentary from him, possibly my favorite of all time: http://fofoa.blogspot.com/2010/07/debtors-and-savers.html

Sun, 05/29/2011 - 11:06 | Link to Comment Muir
Muir's picture

on objectivism in general:

“There are two novels that can transform a bookish 14-year-kid's life: The Lord of the Rings and Atlas Shrugged. One is a childish daydream that can lead to an emotionally stunted, socially crippled adulthood in which large chunks of the day are spent inventing ways to make real life more like a fantasy novel. The other is a book about orcs.”

Sun, 05/29/2011 - 11:40 | Link to Comment Ahmeexnal
Ahmeexnal's picture

Idiocy has no boundaries. 

Tolkien's works are more than meet the eye.  The fact that you were only able to grasp the "dragon, elf, hobbit, orc, dwarf" context should be enough proof about your poor/lacking analytical skills.  Try re-reading Tolkien with open eyes. "Farmer Giles of Ham" is a short story, an anarchist's guidebook on how to take a stand against authoritatian fascist rule.

Atlas Shrugged is a book TPTB don't want the sheeple to read and UNDERSTAND, the reason being it lays the foundation for their collapse.  But as in AS, you don't need the masses in order to bring the system down. It only takes what Toffler termed a "pivotal minority".

Sun, 05/29/2011 - 12:02 | Link to Comment Muir
Muir's picture

"tlas Shrugged is a book TPTB don't want the sheeple to read and UNDERSTAND"

You fucking ignorant transexual.

__

TBTB are Atlas Shrugged!!!

Alan Greenspan was an acolyte of hers, for heavens sake.

 

Just how stupid are you?

_

edit: question was rhetorical

Sun, 05/29/2011 - 12:08 | Link to Comment Ahmeexnal
Ahmeexnal's picture

Wrong.

TPTB hijacked AS.

Just like the church of Rome hijacked the teachings of Jesus (if such a person did in fact exist, which is highly debatable).

Once again, you are living proof that idiocy has no boundaries. And your insults give a clear insight into your own sexual demons.  Now we all know the origin of your fake bouncing boobs avatar. 

 

 

Sun, 05/29/2011 - 14:20 | Link to Comment Quixotic_Not
Quixotic_Not's picture

The *truth* is always visible to the initiated...

But the soul which has been polluted, and is impure at the time of her departure, and is the companion and servant of the body always, and is in love with and fascinated by the body and by the desires and pleasures of the body, until she is led to believe that the truth only exists in a bodily form, which a man may touch and see and taste and use for the purposes of his lusts -- the soul, I mean, accustomed to hate and fear and avoid the intellectual principle, which to the bodily eye is dark and invisible, and can be attained only by philosophy -- do you suppose that such a soul as this will depart pure and unalloyed? ~ Plato

Sun, 05/29/2011 - 12:28 | Link to Comment disabledvet
disabledvet's picture

you forgot to add "Penthouse."

Sun, 05/29/2011 - 06:55 | Link to Comment Medea
Medea's picture

Stupid people say there are only two kinds of people in this world. Go ahead and bag that pseudo-intellectual gibberish.

Sun, 05/29/2011 - 10:56 | Link to Comment DeadFred
DeadFred's picture

There are only two types of people, people who put people into types and those that don't.

Sun, 05/29/2011 - 15:42 | Link to Comment S.N.A.F.U.
S.N.A.F.U.'s picture

There are only 10 types of people in the world: Those who understand binary, and those who don't.

Sun, 05/29/2011 - 00:51 | Link to Comment Anonymouse
Anonymouse's picture

Looking forward to reading this. It is highly offensive (and dangerous to the republic) how the laws we must live be do not apply to our "leaders and role models"

A couple of years ago, I started playing around with capturing numbers from congressional personal investment disclosure, but as it is all scanned pdf, would be a highly manual process and since holdings and net worth are reported in wide ranges, would be difficult to determine true performance or to aggregate.  In the long haul taking the range mid-point would be reasonable, but not in the short run.  Of course, you also would have to adjust for spousal income, outside business income, books, etc., that could legitimately (or illegitamately) affect changes in net worth.  You also would only know of holdings on an annual-ish basis.  And of course there always is Charlie Rangel risk (e.g., timeliness and accuracy of reporting).

Definitely interested in this report and how it was done.  I have no doubt there is significant graft and corruption, but how to wash out the noise to determine trends and indictable offenses is another question altogether.

Sun, 05/29/2011 - 01:10 | Link to Comment Quixotic_Not
Quixotic_Not's picture

The state of nature has a law of nature to govern it, which obliges every one: and reason, which is that law, teaches all mankind, who will but consult it, that being all equal and independent, no one ought to harm another in his life, health, liberty, or possessions ~ John Locke 1690


Whenever the legislators endeavor to take away and destroy the property of the people, or to reduce them to slavery under arbitrary power, they put themselves into a state of war with the people, who are thereupon absolved from any further obedience. ~ John Locke 1690

Which manifested as this:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.

Perhaps common sense will arise from the ashes, and the dogfood cans?

NAH....

Sun, 05/29/2011 - 10:09 | Link to Comment DaveyJones
DaveyJones's picture

my favorite law professor was a bit of an anarchist and swore that most modern legislation was nothing more than someone trying to get a buck out of someone else often the taxpayer. This was in the eightees and I used to debate him. Used to.

Sun, 05/29/2011 - 12:19 | Link to Comment aerojet
aerojet's picture

It's the surest game in town--make car seats and then go lobby Congress to make sure every kid must sit in one.  Or force people to install sprinkler systems, not have lead paint in their houses.  I'm surprised that hair salons don't have lobbyists getting laws passed to prevent bad hair days.

Sun, 05/29/2011 - 15:31 | Link to Comment knowless
Sun, 05/29/2011 - 07:05 | Link to Comment beastie
beastie's picture

There is a way to do what you want to do. Head over to screwtapefiles.blogspot.com and ask Warren how he sucks the SLV pdf files into a database which he has made available to the public.

Sun, 05/29/2011 - 01:04 | Link to Comment holdbuysell
holdbuysell's picture

Write your representatives to request a congressional investigation. (sarc)

 

Sun, 05/29/2011 - 01:59 | Link to Comment I am Jobe
I am Jobe's picture

LOL. They self govern and abide by ethics.

Sun, 05/29/2011 - 01:15 | Link to Comment Vuvuzela
Vuvuzela's picture

Legal Bribe

Sun, 05/29/2011 - 01:23 | Link to Comment Maddeafandblind
Maddeafandblind's picture
Why A Hedge Fund Comprised Of.....etc

 

"comprised of"

 

why don't you learn English?

 

 

Sun, 05/29/2011 - 01:47 | Link to Comment holdbuysell
holdbuysell's picture

Pedantic. Your eye is clearly off the ball.

http://www.merriam-webster.com/dictionary/comprised

 

Sun, 05/29/2011 - 07:07 | Link to Comment Bendromeda Strain
Bendromeda Strain's picture

Your eye is clearly off the ball.

Of course it is - he's mad, deaf & blind. Unfortunately, WebMD reports that it is likely too late for penicillin.

Sun, 05/29/2011 - 03:29 | Link to Comment Maddeafandblind
Maddeafandblind's picture

er, no.

comprise: to include; contain; to constitute the whole of; consist of

ergo: "comprised of"'s synonym would therefore be "consists of of"

I realise of course that correct English usage is an almost insurmountable hurdle for most Americans.

To say that something "wrong" becomes "right" because everybody's doing it is sloppy in the extreme.

Innit.

Sun, 05/29/2011 - 06:37 | Link to Comment Anonymouse
Anonymouse's picture

It's fair to say you are missing the forest for the trees.  Irregardless (;-)), acc to Meriam-Webster:

3: compose, constitute <a misconception as to what comprises a literary generation — William Styron> <about 8 percent of our military forces are comprised of women — Jimmy Carter>
Usage Discussion of COMPRISE Although it has been in use since the late 18th century, sense 3 is still attacked as wrong. Why it has been singled out is not clear, but until comparatively recent times it was found chiefly in scientific or technical writing rather than belles lettres. Our current evidence shows a slight shift in usage: sense 3 is somewhat more frequent in recent literary use than the earlier senses. You should be aware, however, that if you use sense 3 you may be subject to criticism for doing so, and you may want to choose a safer synonym such as compose or make up.
p.s. I read this while eating at my favorite restaurant "The La Trattoria"
Sun, 05/29/2011 - 07:27 | Link to Comment Sean7k
Sean7k's picture

Well played. The grammar nazi's can be a real annoyance. 

Sun, 05/29/2011 - 08:27 | Link to Comment Sean7k
Sean7k's picture

The use of that is superfluous, but you're an expert, no?

Sun, 05/29/2011 - 10:16 | Link to Comment NotApplicable
NotApplicable's picture

Speaking of standards, your ID is an incoherent mess. MadDeafAndBlind or Mad_deaf_and_blind are both an acceptable form to replace the gibberish you've chosen to represent yourself.

Please learn (and use) Netiquette.

kthxbye

Sun, 05/29/2011 - 10:20 | Link to Comment ColonelCooper
ColonelCooper's picture

I have an idea.  Why don't you try to crank out about six or seven new articles on a holiday weedend Sunday morning, so that your readers won't get bored with dead threads?  In doing so, see if you manage a typo or two, or perhaps mix up a their/there/they're; maybe an its/it's? 

I have another idea.  Pull that rough cut two by four out of your ass and club yourself over the head with it.

Douchebag.

Sun, 05/29/2011 - 10:38 | Link to Comment Sisyphus
Sisyphus's picture

Thank you for that explaination. I waited with baited breast to learn about the correct usage.

Sun, 05/29/2011 - 12:34 | Link to Comment disabledvet
disabledvet's picture

i love baited breasts myself.  "like a fish...i swim towards them!"

Sun, 05/29/2011 - 11:22 | Link to Comment serotonindumptruck
serotonindumptruck's picture

For all intensive purposes, it is a mute point. Proper grammer will be the death nail for the interwebs.

Sun, 05/29/2011 - 15:39 | Link to Comment knowless
knowless's picture

You mean intensive porpoises right?

Sun, 05/29/2011 - 10:54 | Link to Comment traderjoe
traderjoe's picture

Wow, you've been here for a year - and that's what you care about? Fucktard.

Sun, 05/29/2011 - 01:35 | Link to Comment I am Jobe
I am Jobe's picture

Is there a market for The Guillotine ? I think this would be the best investment there is.

Sun, 05/29/2011 - 08:59 | Link to Comment Long-John-Silver
Sun, 05/29/2011 - 09:27 | Link to Comment Dugald
Dugald's picture

 

Can be built by any handyman with basic materials, and be operated by any moron....what more could one ask?

Sun, 05/29/2011 - 01:41 | Link to Comment Quixotic_Not
Quixotic_Not's picture

Watching the looting, thuggery and idiocracy over the last  twenty years, somehow reminds me of this:

http://www.youtube.com/watch?v=Zkox6niJ1Wc

You are about to enter another dimension, a dimension not only of sight and sound but of mind. A journey into a wondrous land of imagination. Next stop, the Twilight Zone!

Sun, 05/29/2011 - 01:43 | Link to Comment I am Jobe
I am Jobe's picture

More like 30 years, dosen't matter, after all these years the masses are still brinwashed and continue to live the idiotic lifestyle by relecting the same a holes. Look at Nevada, harry Reid.

Sun, 05/29/2011 - 06:16 | Link to Comment Mec-sick-o
Mec-sick-o's picture

Standing Waves.

It is not obscure, just not straight evident.

http://en.wikipedia.org/wiki/Standing_wave

Sun, 05/29/2011 - 02:04 | Link to Comment rich_wicks
rich_wicks's picture

You mean our legislative lawmakers are breaking the law?

What a shock.

Being a criminal is a bullet point on any congressional member's resume.

Sun, 05/29/2011 - 02:07 | Link to Comment I am Jobe
I am Jobe's picture

Shocking and unbelievable. More like a skill set that is essential in a Senator and Congress. Should read I love to loot and screw people over. No different if this was a President. It used to be a time these guys and their speeches meant something, anymore a hog wash and lies is all one hears. Let the lynching begin, no way out of this mess in the USA.

Sun, 05/29/2011 - 02:16 | Link to Comment I am Jobe
I am Jobe's picture

When Americans No Longer Own America 

http://www.pushhamburger.com/who_ownes_america.htm

Sun, 05/29/2011 - 02:17 | Link to Comment I am Jobe
I am Jobe's picture

The Corporate Control Of Society and Human Life
http://www.pushhamburger.com/may_08.htm

Sun, 05/29/2011 - 02:15 | Link to Comment BlackholeDivestment
Sun, 05/29/2011 - 02:23 | Link to Comment I am Jobe
I am Jobe's picture

You are right. Rules are different for Congress.

Sun, 05/29/2011 - 02:19 | Link to Comment I am Jobe
I am Jobe's picture

Congress: America's Criminal Class: Part I

http://www.pushhamburger.com/dec_pearl.htm

Sun, 05/29/2011 - 03:54 | Link to Comment I am Jobe
I am Jobe's picture

79 Senators vote to trash the Constitution: The “War of Terror” on the US grows

 

http://www.activistpost.com/2011/05/79-senators-vote-to-trash-constituti...

Sun, 05/29/2011 - 05:44 | Link to Comment Oh regional Indian
Oh regional Indian's picture

I remember Big Bertha Murtha. How he rose like colossus to defend some stupid lie/excess etc.

Hero/Vet, this that.

Few months later, whores on his boat, graft, pork, general skullduggery. Now dead.

Such a strange bag, politics, world over. All the same, in the US they just dress well and avoid all confrontation.

ORI

http://aadivaahan.wordpress.com/2011/05/26/the-video-trailer/

Sun, 05/29/2011 - 06:17 | Link to Comment I am Jobe
I am Jobe's picture

Nice music and well made video might I add. The sheeples in the USA are ignorant and will and have no guts or crtical thinking skills left to ensure their survival. As long as the TV is filled with crap and MCD server up the big macs they are happy and accept anything at face value with no questions asked . You can see the dumbness as you walk past a SBUX and hear the stupidity and see the stupidity as well. Well USA is at the cross roads of either adopting socialism outright or more socialism.

"We can't expect the American People to jump from Capitalism to Communism,
but we can assist their elected leaders in giving them small doses of Socialism,
until they awaken one day to find that they have Communism."
by: Nikita Khrushchev

Sums it all up for the sheeples are going to be led to the slaughter house by first controlling thru money and debt and then thru the NSA and Facebook. Gone are the days of the USA which was proud and what she stood for. Politicians kept selling birth certificates of US born citizens and created debt and want more debt. Time will tell where America will be. meanwhile China, India and Brazil are taking the lead to ensure the mistakes are not made.

Sun, 05/29/2011 - 12:34 | Link to Comment aerojet
aerojet's picture

I doubt that people are any smarter in China, India, or Brazil, quite frankly.  People are mostly ignorant, fearful, herd animals wherever you go.

Sun, 05/29/2011 - 06:31 | Link to Comment topcallingtroll
topcallingtroll's picture

I am going to send a copy of the study to the senators and house members in arkansas. I ask the rest of you to send copies of the studies to your congress critters.

We should make this information more publicly available also. Link it in various websites. Email friends and associates, and help this go viral.

Sun, 05/29/2011 - 07:17 | Link to Comment I am Jobe
I am Jobe's picture

Its one big revolving door might I add. SEC, FINRA, Congress, the good ole boys network............ Once these guys get out of office, they have bigger perks waiting as lobbyists. Now you tell me how can America ever solve anything if the good ole boys club is how biz is done.

Sun, 05/29/2011 - 08:22 | Link to Comment chemystical
chemystical's picture

...and that revolving door leads straight to the synagogue of satan.

 

for example, Mary Schapiro (whose grandfather was in business with Bernie Maddoff) is guarding the SEC henhouse...

or Gary Gensler at the CFTC

or Timmy and the Bernankster diluting your purse while handing money mostly to their co-religionist cronies and telling you to "stfu and trust them"...

or Sheila Bair who will ensure that your deposits of Bernankster Bucks are "safe" (because Ben and Timmy will just print more of them to pay you back when one of their member synagogues, er, uh, banks, can't produce enough to meet the depositors' side of the ledger)

One reason for the statistically anamolous returns for junior (D) Congresspersons might be that they receive their investment advice from their $$ patron Irving Goldman Kikestein if not their Uncle Irving.

Sun, 05/29/2011 - 07:20 | Link to Comment I am Jobe
I am Jobe's picture

"When you see that in order to produce, you need to obtain permission from men who produce nothing - When you see that money is flowing to those who deal, not in goods, but in favors - When you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you - When you see corruption being rewarded and honesty becoming a self-sacrifice - You may know that your society is doomed." -- Ayn Rand, "Atlas Shrugged", 1957

Sun, 05/29/2011 - 07:38 | Link to Comment Sean7k
Sean7k's picture

Nice quote for a sunday morning. +10.

Sun, 05/29/2011 - 07:04 | Link to Comment Kokulakai
Kokulakai's picture

Only 9%; with the info avaliable to them?

Their intelligence is clearly on display.

Sun, 05/29/2011 - 09:47 | Link to Comment Dugald
Dugald's picture

 Just how many voters understand the term "Mea culpa". They had to be voted in...Every election, you, the people, have had the chance to make a difference...and each time you have fudged it!   Election time is nothing but 'hoopdedoo and circus', and what an awful price you are paying for it. It is staggering to comprehend what you the people,have done to a great nation. And, I believe, to your undying shame.

 

Sun, 05/29/2011 - 10:24 | Link to Comment Sean7k
Sean7k's picture

Your naivete is a classic response of someone blaming others from his supposedly superior perch above the world.

One, all politicians must have the approval of their local, state and national party machines before they receive support- financial support essential to win an election. This is why voting is useless and all candidates are the same.

Two, the extensive use of psychology to direct the people through media and created crisis causes people to revert back to their programming. By hitting the right buttons, the elite control behavior. 

Three, when a government lies to it's people about eveything under the sun, with no transparency to make a good decision from, the people are kept from the tools they need to make an informed choice.

Four, blaming the people, the vast majority whom have average intelligence and little motivation to constantly educate themselves to the tyranny being inflicted upon them, educated by a state system that has clouded their ability to think and re-written the history they have as a baseline; shows a staggering amount of ignorance coupled with a paucity of compassion for the plight of your fellow citizens.

It is the Elites that are to blame and only the Elites. 

 

Sun, 05/29/2011 - 12:16 | Link to Comment aerojet
aerojet's picture

Maybe locally, but at the federal level elections are comletely inconsequential.  It's a big dog and pony show and that's it.

Sun, 05/29/2011 - 07:20 | Link to Comment I am Jobe
I am Jobe's picture

"The more corrupt the state, the more numerous the laws." - Cornelius Tacitus (55 - 117 A.D.)

Sun, 05/29/2011 - 08:29 | Link to Comment ??
??'s picture

"Woe to those who call evil good and good evil, who put darkness for light and light for darkness, who put bitter for sweet and sweet for bitter."  Isa. 5:20

TSA Molests 3 Year Old Child at Chattanooga Metro Airport

http://www.youtube.com/watch?v=T6ByKOhAhsU

Sun, 05/29/2011 - 07:42 | Link to Comment ??
??'s picture

If VOA is reporting this it must be very bad

 

Officials in southern Afghanistan say a NATO airstrike has killed 14 civilians - all women and children. 

http://www.voanews.com/english/news/14-Civilians-Killed-in-NATO-Airstrik...

 

edit

 

and sure enough some other reports with 4x the number of civilians killed

http://au.news.yahoo.com/thewest/a/-/world/9538918/afghans-say-nato-air-...

Sun, 05/29/2011 - 13:17 | Link to Comment trav7777
trav7777's picture

"regrettable collateral damage."

I'm sure there must have been at least ONE legitimate target in the WTC on 911, no?

It's all just a slippery slope

Sun, 05/29/2011 - 08:08 | Link to Comment overmedicatedun...
overmedicatedundersexed's picture

one post above: we keep electing these people example Harry Reid..well the next logical step is DO YOU THINK ELECTIONS are exempt from the criminality of these sociopaths??

Selected Not Elected..see Gov race in Wash state as one of the most blatant stealing of an election in modern times..or Mccains sudden win in the GOP primary run in 08. 

Sun, 05/29/2011 - 09:31 | Link to Comment tom a taxpayer
tom a taxpayer's picture

 

The bigger and more fundamental problem is conflict-of-interest. Members of Congress may use inside information to trade stocks when the opportunity arises. However, in developing or voting on every proposed legislation, members of Congress consider not only how it will affect the public interest but also their private interest including stocks. In other words, whether it is inside information or public information, members of Congress have a much deeper conflict of interest because of their ability to shape legislation or simply vote yes or no on legislation that affects their personal stock holdings.

 

Sun, 05/29/2011 - 10:22 | Link to Comment ColonelCooper
ColonelCooper's picture

Thanks, TD.  You manage to dig up the best shit to harass my Representatives.

Sun, 05/29/2011 - 13:18 | Link to Comment High Plains Drifter
High Plains Drifter's picture

didn't they give bibi  , 19 standing ovations the other day when he spoke before both houses?  sir, they are not our reprentatives and probably never were. on that same note, on this memorial day, our soldiers are not our own either. but i digress.

Sun, 05/29/2011 - 10:20 | Link to Comment Muir
Muir's picture

I love the smell of corruption in the morning.

___

On the bright side, as Kokulakai pointed out, they are not good traders are they?

Sun, 05/29/2011 - 10:29 | Link to Comment High Plains Drifter
High Plains Drifter's picture

bill frist, brokeback mountain and barack obama.

http://www.thedcpost.com/?p=7913

its amazing how much of this crap is going on in washington , dc.

the mossad loves it.......makes their extortion and blackmailing jobs so easy for them.

Sun, 05/29/2011 - 10:56 | Link to Comment Muir
Muir's picture

Wow, even by the standards of ZH inbred, retarded, doomsday occultist morons, you set a new low.

Let me guess, you drifted to this site from some doomsday/Free Americans to --->some PMs will be your saviour site to ---> ZH.

 

Sun, 05/29/2011 - 11:39 | Link to Comment High Plains Drifter
High Plains Drifter's picture

well you sir, are most welcome to have your own opinion. i really don't care what you think really. i saw the name bill frist and i remembered something i read about him. i found it interesting since on the suface one might gather , that he is not like this, but in the dark , he becomes someone else. homosexuality is widespread in washington dc. of course most amerikans don't know this. it is recorded by secret service logs, that bush has late night visits by a known homosexual prositute by the name of gannon, over 200 times and this was known as gannon gate, but it never got much press either. right now, obama has a "personal" assistant named reggie love (of all things) and he is called obama's body man (again whatever that means) and to my way of thinking on this, i think that title is appropriate. the truth is the truth, whether we like to hear it or not. i have been on this blog now for what appears to me, a very long time. i have never, ever lasted long before i get the boot. i realize this is the way things are. i have no regrets. i will continue to speak out. yes , i am a metal head and no , i do not have any qualms about pm's being my savior as you put it. there has been only one Savior and He died on a Cross over 2000 years ago and to Him,  i give my allegence and my faith in the things to come.

Sun, 05/29/2011 - 10:44 | Link to Comment gwar5
gwar5's picture

.. ditto

Sun, 05/29/2011 - 10:44 | Link to Comment gwar5
gwar5's picture

My favorite political cheats that make you go, hmmm...... : 

--Soros owns $321 million of Monsanto, & special provisions in the Food Safety Act gives them a monopoly on their seeds

--Soros owned 10K shares of the TSA naked body scanner company which was mandated for use. Our granny genital gropes are courtesy of Soros power with the dems.

--Anthony Weiner, D-NY Manhatten district, threatening to introduce legislation to stop the "unscrupulous" market for coins and scrap gold he says was hurting the "moms and pops" when it's his very own massive spending deficits creating the market for alternative stores of value

--legislation to stop private online publicly traded schools, like Phoenix University, was sponsored and preceded by Wall Street short sellers of their stock. 

Sun, 05/29/2011 - 11:43 | Link to Comment High Plains Drifter
High Plains Drifter's picture

http://www.sourcewatch.org/index.php?title=Monsanto

monsanto, a very, very dangerous illuminati company.

Sun, 05/29/2011 - 12:14 | Link to Comment aerojet
aerojet's picture

I am 100% positive that the underwear bomber incident that led to the widespread adoption of the naked scanners was a false flag.  It was just too easy to pull off--get one guy on a plane with a bomb and sell billions of dollars of equipment that was, until that point, completely unpopular and not selling well.  It was a huge win for the powers that be at our expense.  And I fucking resent the hell out of it and yes, it makes me want to kill them--it's dangerous to fuck with people the way they do.

Sun, 05/29/2011 - 13:14 | Link to Comment High Plains Drifter
High Plains Drifter's picture

yes it was a false flag. a man in a suit  was seen by witnesses , two people from chicago if you remember, who said they saw the underwear bomber shepherded through security onto the plane......who was the guy in the suit?  well where did the plane take off from?  Amsterdam?  Who runs security there?  A Israeli company.  now flash back to 911. who ran security at boston logan or in cleveland and who still runs security there ? ICTS?

http://www.americanfreepress.net/html/underwear_bomber__206.html

http://portland.indymedia.org/en/2006/05/339320.shtml

who pushes the body scanner scam ?

comrade chertoff?

http://www.youtube.com/watch?v=KcznNy3-9xE

so what happens nowadays, if you refuse to be felt up and you refuse to be scanned? what then?

Sun, 05/29/2011 - 13:20 | Link to Comment trav7777
trav7777's picture

never impute conspiracy to something explicable by incompetence.

Someone in Intel was trying to make their career by busting his "cell" here in the USA.  They knew he was a terrorist; they listened to his dad and all the rest of the crap.  They were hoping they could follow him here and make a big splash with his contacts in the US.

I mean, think about it- it'd be UNPRECEDENTED for them to actually bust some terrorists, wouldn't it?  Because they haven't busted a goddamned ONE, besides lone disgruntled tools of whom the cell was 3/4 FBI agents and one ME fall guy.

Instead, they almost made the plane splash on the tarmac.

Sun, 05/29/2011 - 13:46 | Link to Comment High Plains Drifter
High Plains Drifter's picture

well first off, the boy's father is a big mossad /cia operative in nigeria. he turns in his own son, which is kind of weird. then the bomb he had was not that poweful anyway and would not have done any severe damage. the boy was set up from the word go and the father set him up and now he spends his life in prison......another useful idiot. then we have the fact mind you, the fact that the israeli company mentioned above , is in charge of security at the amerstam airport and then come to find out, they are the same company  that was charged with security at boston logan and at cleveland on 911. so travis, no conspiracies here, just cold hard facts....of course it might have  been more the way you are talking about. either way, the mission was accomplished. was it not?  of course i don't know all of this for sure. i just read things and try to make a educated guess on what is going on and try to connect the dots as much as possible.

Sun, 05/29/2011 - 11:09 | Link to Comment NERVEAGENTVX
NERVEAGENTVX's picture

You sure can tell who knows what kind of returns have to be got in order to outpace the real rate of inflation.

Sun, 05/29/2011 - 11:20 | Link to Comment Temporalist
Temporalist's picture

On a similar note:

Fox in Henhouse' At Nasdaq Guilty

http://online.wsj.com/article/SB1000142405270230452080457634774245104293...

"Donald Johnson, 56 years old, pleaded guilty to one count of criminal securities fraud on Thursday in federal court in Virginia related to a series of stock trades in companies that, among things, make solar panels, market drugs and sell pet food."

Maybe Leo knows this guy.

Sun, 05/29/2011 - 11:40 | Link to Comment Sizzurp
Sizzurp's picture

Power corrupts.  It's a natural law of human nature.  No way to stop it other than to keep gov. small and as limited as possible, which thus keeps the corruption as small and as limited as possible.  There is only one person running for president that comes close, and I suspect you all know exactly who that is.

Sun, 05/29/2011 - 12:07 | Link to Comment aerojet
aerojet's picture

Instead of trying to stop insider trading, which is impossible (especially in the days of instant messaging) why don't we require that all people in these positions must publish their trades and money moves so that we can all benefit?  Total transparency.

Sun, 05/29/2011 - 12:13 | Link to Comment Smiddywesson
Smiddywesson's picture

The study is worth discussing.

While House members outperformed the markets by 6%, senators outperformed by 10%.  That's an AVERAGE outperformance.  Junior senators outperformed everyone.  Imagine what the performance of the best of them was?

There are two types of insider trading.  Passive insider trading where you just hear something actionable in your committee work and you trade it.  Active insider trading is where you are taking a bribe and drycleaning it through your trading account.  That can be done either by the corporation paying the bride moving the market in your favor, or by having a broker fraudulently assigning trades to the senators account.  The Hillary Clinton cattle futures scam is a good example.  She turned $1000 into $100k in nine months.  She started with ten contracts in a $1000 account, and was down $100k at one point, but never received a margin call.  Her trades were 80% successful and usually had entries at the best prices of the day.  Furthermore, she made money on the short side during a bull market.  How'd those shorts go for you last year?

The point isn't that Hillary is good or bad, the point is that these transactions are sometimes used to funnel money to congress.  The study in question covered a period from 1985 to 2001.  The study looked at congress members who traded individual stocks.  The Abscam prosecutions concluded in 1980.  The part of the study that shocked me was how fast the number of congressmen trading individual stocks ramped up after Abscam.  Gee, probably a coincidence.  There were only 41 House Reps buying individual stocks in 1985, but there were 117 in 1999.  After the tech stock bubble, the number fell to 91, so I guess these politicians gave back some profits along with the rest of use.  The point is that Congressmen trading individual stocks doubled after Abscam.

Another interesting point was that both Reps and Senate members experienced great returns, usually based on fortuitious entries, but House Reps usually mistimed their exits, missing substantial returns by cutting their winners short.  However, in the Senate, this was not the case.  The expertise of their exits led them to substantially outperform their peers in the House.  Not only that, but the level of participation in the Senate greatly outstripped the House.  I can't remember the figure, but it was a substantial number of Senators participating in the trading of individual stock and that just wasn't so with the House.

My interpretation is that passive insider trading is rampant in both the Senate and the House.  You don't get your hand held in timing entries and exits by picking up tips on the job.  That's why House Reps had great entries and lousy exits, they aren't traders and don't know how to mange their trades.  On the other hand, active insider trading provides wonderful guidance to a member of Congress.  Someone wanting to grease their palms would be able to tell them exactly where to enter and exit.  Where is power concentrated in the Congress?  In the Senate.  Where do we see perfect entries and exits?  In the Senate.  I would speculate that a study of key committee heads in the House would see those exits improve a bit, but that's just cynical me speaking.

Mon, 05/30/2011 - 21:52 | Link to Comment shesalive
shesalive's picture

+very interesting

Mon, 05/30/2011 - 22:25 | Link to Comment Anonymouse
Anonymouse's picture

Very interesting take.  Clearly there is corruption (whether legal or not).  And I am sure you are right about the Senate getting better tips given their concentrated power.

Another possibility (which doesn't negate the corruption thesis), is that the majority of tips are related to buys rather than sells, though there are some of each.

Senators generally are older and wealthier (prior corruption?) than Congressmen.  Even if neither got a sell tip, Senators likely would perform better due to presumed greater experience and (especially) greater risk tolerance given their higher net worth.

I suspect your thesis is the primary factor, and offer my comments as an amendment to yours that might eliminate some noise in the results.

On the other hand, Hillary did read the Wall Street Journal, so that probably accounts for her success (despite the fact that her broker Red Bone had been disciplined by the Merc before and after the Hillary event for allocating trades, that is ex post facto assignment of winning trades to some clients and losing trades to others).  That's one impressive paper!

Sun, 05/29/2011 - 12:39 | Link to Comment disabledvet
disabledvet's picture

"You're already super-rich.  Why do still want more?"

"Just keeping score."

"Well, what how will do it with this market then?"

"I'm running for Congress.  I don't plan on spending a dime for it, either."

Sun, 05/29/2011 - 14:02 | Link to Comment friendly manitoba
friendly manitoba's picture

hmmm -- 1000 congressman and senators and only 9% can equal hedge fund perforance  -- im guessing that the really rich and smart ones have access to some pretty awesome advisors -  most are under-performing  , therefore this story of insider info and frontrunning could be a bit much ... id say they arent taking advantage of the info ..

 

pls excuse any spelling and grammar errors 

 

 

Mon, 05/30/2011 - 22:26 | Link to Comment Anonymouse
Anonymouse's picture

Always good to consider all sides of the question (including the non-corrupt thesis), but you clearly mis-read the study.  It said the Democratic congressmen outperformed the market by 9%, not that 9% of congressmen outperformed the market.

That's a huge difference

Sun, 05/29/2011 - 15:55 | Link to Comment espirit
espirit's picture

It is not so surprising those in government are able to outperform with the information given them by the people.  Just for instance, say one (or several) major automotive manufacturers entering into reorganization (i.e. bankruptcy) being able to write off or ignore any prior litigation pending against the company(s).

What's that worth?  I say what's right would be to liquidate those holdings with the courts paying off those harmed first, not paying off the legislators able to profit from favorable bankruptcy agreements.

Bah! They're all crooked.

Mon, 05/30/2011 - 22:45 | Link to Comment joiceca
joiceca's picture

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