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!
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.
> 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.
> 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.
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.
> used insider information well, it's whether they used insider information at all.
it'd be impossible to detect inaction as a result of insider info. For example, if someone were originally planning on selling, but based on some insider info, changed their mind to not do anything.
So - the point i'm trying to make is that if they _profited_ from insider info, rather than just merely utilizing it, then it should be prosecuted. But if they are stupid and did the "wrong" thing with insider info, i don't see why there needs to be any effort trying to prosecute. They got their just punishment by losing money already.
The trade was relevant because it's what she was lying to protect. My point still stands: people will take a large risk for a gain that is negligible relative to their net worth.
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.
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.
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.
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.
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.
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?
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)
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”.
Even this is a conflict of interest. They could sell out the long term interest of the country in the short term interest of large businesses via any number of levers they control, e.g. harmful deregulation.
Historically, what are actual pragmatic ways to bring lawmakers to justice when those lawmakers themselves have made it impossible to improve things by voting?
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.
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.
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.
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
Gerrymandering isn’t corruption. You should probably read up on this subject; I assumed gerrymandering was inherently bad until I actually heard an intelligent discussion of it.
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.
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.
There’s actually an incredibly simple solution: allow DC residents to vote as part of Virginia or Maryland, for the purposes of congressional races. There, problem solved.
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.
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
-"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.
That's all well and good, but are any of the people talking about requiring voter ID also talking about reform to make it easier to obtain voter ID? If not, why not, and does it call their motivation into question?
short answer yes - they are talking about the free voter Id option (which is going to cost precious state resources! haha-laughing voice) and the $5 option
- there is also discussion about using the mobile app to get most of the process pre-done before you arrive at a DMV to finish.
motivation - I think it's obvious push back to a bunch of low-level tactics that were used to change the playing field for getting votes in in several places - things that were unexpected and unplanned for by many - and some of those things that could indeed be used for a lot of fraud - so they are tightening up the many of the abuse angles.
At least the playing field is basically leveled at this point - people have 2 or 4 years to get an ID - it shouldn't take that long, it shouldn't take 9 months or 3 days (events I have personally witnessed)
- I'd love some hard numbers on how many adults in GA don't have a pic ID,
And maybe it's time for an APP I was thinking about many years ago.
A DMV shame app
- where people could take a pic upon arrival and share a location showing they were still at DMV X number of hours later.. and then combine that with data about income loss and tax revenue to the local and state - loss - and multiply it by the number of other suspected waiting individuals - and use it to help people find best DMV, and best times to go - but also to notify the Governors about the losses they are creating.. along with link to petitions to change / hire more - expand staff / locations.. and show alternative options is available, like county clerks, apps, digital kiosks.. I'd still love for such a thing, maybe it'd get more traction with all the hubbub about IDs these days.
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%
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.
The better route would be to eliminate the methods that allow injustice. For example, instead of delegating decision authority to a politician retain all decisions as a popular vote in a basket of decisions put to voters at a certain tempo, say weekly. Voting for a politician has too high latency between voter decision and effective decision.
I actually copied 'Gil O’Tyne' to Google it, then as soon as I pasted it in the search box, realised what a fool I'd been.
.
And yes, I appreciate that I could have just right-clicked the selection to Google it direct, but my brain doesn't work that way.
- ed
And I'd write it "Gil O'Teen' which whilst a bit more obvious, is a bit more Irish-looking, rather than the confusing ScotsIrish-Northumbrian name you came up with! :)
I dare say the underlying issue hasn’t been addressed and Perdue’s loss is due to a confluence of other factors. Most senators get re-elected in each election cycle.
"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.
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.
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”.
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
There is no other definition. It’s not “insider trading” anymore if it’s just people with private information because anyone can come up with private information that might be useful to trade on.
An excellent weather forecaster can make a fortune in the natural gas market, could trade fruit company stock, etc. and there is nothing wrong with that.
You have a problem with Congress using their access, that’s fine. But let’s not call it something it’s not because that hurts your cause.
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.
Yes. That’s exactly my point. We don’t have a direct democracy so then it fea that people should stop complaining and “just vote” is ignorant of how change happens. You have to get a loud enough voice to make representatives to take up this action in the first place.
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...
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.
> 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.
I don’t think you’ve thought that through. This is how it works for everyone who promotes something they have a vested interest in.
Professors who promote their own research programs. Surgeons who come up with new techniques, etc.
There is nothing wrong with coming out and saying, “we really like this company so we bought 5% of the shares and intend to take it fully private at $X/share” if the rest of the share holders are interested.
Yeah, and I didn’t even need a secret congressional briefing to know that I should be selling hand-over-fist when it became clear that the virus was pandemic-bound.
I know I personally advised friends and colleagues to dump hard somewhere around Feb 22nd, as the spread appeared to be unstoppable. I’ve played pandemic board game, am familiar with the infect cities phase of play.
Further, if we held our elected officials to their word there would be considerably more turnover.
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...