Trading on the stock market is commonly referred to as legalized gambling. Traders buy and sell stocks, essentially betting that they will rise or fall. If they think it will rise, they buy stocks. If they think it will fall, they buy "futures", or as it is also known: selling short. In this case, they agree to sell the stock at today's price, and agree to "buy" it in the future at whatever price it happens to be. If the price falls, they make a profit. This is the yin and yang of the stock market.
The stock market has grown beyond simply trading in stocks of companies, however. Investment firms have special funds called hedge funds
, which are composed primarily of short sales and derivatives. During the housing bubble, many banks actually bought derivatives that paid out if their own investments failed. That generated a lot of outrage.
The stock market has really stepped squarely into Offtrack Betting territory with funds like Media Derivatives
, which are bets on whether certain movies will succeed or fail. Can you imagine if a movie producer bought shares that paid off if his movie failed? It would be like Pete Rose betting against his own team, since in both cases not only is failure rewarded, the person is in a position of power to allow (or encourage) failure.
So what to make of ProShares Trust Ultrashort 20+ Year Treasury ETF
? This is an investment fund which profits when treasury bonds perform poorly (in other words: when America fails financially). What do you call someone who bets against the success of America, and is in a position of power to move America in the direction of failure (or stymie success)? You could call him House Minority Whip Eric Cantor
Putting his money where his mouth is? Eric Cantor, the Republican Whip in the House of Representatives, bought up to $15,000 in shares of ProShares Trust Ultrashort 20+ Year Treasury ETF last December, according to his 2009 financial disclosure statement. The exchange-traded fund takes a short position in long-dated government bonds. In effect, it is a bet against U.S. government bonds...
So essentially: Eric Cantor is the Pete Rose of Congress. While ostensibly working for government to ensure that America prospers, he is betting that we won't. Calling this unpatriotic doesn't seem like a strong enough epithet.
I can imagine some right-wing pundits and pols will argue that this is okay, because they believe the Democrats (in general, and President Obama in particular) are sending America down the toilet, so why not make some money off of it if they can't do anything about it? That would be like Pete Rose justifying betting against his own team because he felt like the team's owners were making bad decisions.
However, in both cases, these men actually ARE in a position to encourage success. House Minority Whip is a powerful appointment - he is the one that gets his party's votes to the floor. How he uses that power is up to him and his party. I find it hard to believe that Eric Cantor is driven to ensure America's success, however, when he is selling America short, both literally and figuratively.