Last week during the party of six debt ceiling talks Eric Cantor abruptly left the negotiations. Since then, there have been real fears that a compromise will not be made, which economists are predicting could cause our economy to sink into a depression.
This week it has come to light that Eric Cantor has a very big conflict of interest. It seems he is invested in a fund that stands to make profits if the debt ceiling does not get raised.
Cantor is invested in a fund called ProShares Trust Ultrashort 20+ Year Treasury EFT. Per the Washington Street Journal, they reported “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.).”
Jonathan Easley of Salon reported:
The fund hasn’t significantly spiked yet because many investors believe Congress will eventually raise the debt ceiling. However, since Cantor abruptly called off debt ceiling negotiations last Thursday, the fund is up 3.3%. Even if an agreement is ultimately reached before Aug. 2, the fund could continue to benefit between now and then from the uncertainty. (One tactic some speculators are using is to “trade the debt ceiling debate” — that is, to place short-term bets on prices as they fluctuate with the news out of Washington.)