Aug 15, 2012

Paul Ryan's Insider Trader Scandal May Blow Back onto Romney

Paul Ryan cashes in for $1,000s

This story is not just about Paul Ryan, Washington creature and pampered scion, caught downing two $350 bottles of wine with a hedge fund manager at a D.C restaurant.

This is a venal insider trading story that has the legs and potential to dominate the all-important news cycle for weeks moving past Labor Day.

"Over the weekend, the Richmonder blog broke what looked like a whopper of a story: that Republican vice-presidential hopeful Paul Ryan had lined his pockets from information he had obtained from a now-legendary meeting that took place on September 18, 2008," writes Lynn Parramore.

Parramore notes media avoidance of Ryan's many political problems thus far, as Paul Krugman notes this morning, likely won't persist.

Certainly this insider trading story is moving forward, no matter that some are buying the Romney campaign's knock down that Ryan's trades "were part of a Russell 1000 index fund that automatically traded stocks as part of a pre-set formula," as Benjy Sarlin asserts.

Brad DeLong, professor of economics at the University of California, Berkeley, scoffs at Sarlin's explanation.

Writes DeLong:

There is no way in hell--if you are rebalancing to try to track the Russell 1000 index--you make only 58 trades in a year, that you make 27 of those 58 in large money-center banks, and that 10 of those trades involve shifting your money from Citi to Goldman and back five times.

No way in hell.

I don't know what was going on. But it appears that Ryan's flacks are--for some reason--simply making s@#& up.

Romney and Ryan lying? No.
By Lynn Parramore

On [September 18, 2008], Fed Chairman Ben Bernanke and then-Treasury Secretary Hank Paulson broke the news to congressional leaders that they would have to approve a bailout to avert a complete meltdown of the financial system.

America was lurching toward catastrophe. But some folks were apparently thinking about their stock portfolios. Checking through Ryan’s financial disclosure reports, the Richmonder discovered that Ryan had sold the stocks of several major banks that day, while purchasing – surprise! – stock in Paulson’s old firm Goldman.
Check out the rest of Parramore's piece, because no way this story gets buried.

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