221–230 of 232 posts
Have to ask how this wasn't instituted in the first place, excluding the "well it's corruption, obviously" answers. Every single financial job in the private sector has extreme guidelines around this, the Fed is like a buyside firm with ultimate private information access.
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It is instituted. I work at the Fed in a relatively junior role. I can't buy bank stock, or for any practical purposes any financial firm stock (or bonds). I can't buy funds finance-focused mutual funds or any kind. I can't buy stocks of any firm where I have any sort of insider trading, such as contractors. Lastly, there's a window around FOMC meetings where anyone with any sort of insider knowledge is prohibited to…
Fellow economist here… I would have thought this rule would be irrelevant to us! I don’t think most of us think we can beat the market. I hold index funds only. (To be clear: I think this rule is a good idea and should apply to anyone with any serious role there. I’m just a little surprised it’s binding on anyone.) Edit: clicked on your profile. Thanks for writing reghdfe. I use it with some coauthors on a project on…
And it would be perfectly rational for an economist (or someone else) to trade a single stock if they had non-public information and there was no downside. Right now the downsides (it’s unethical / a gray area but depending on one’s position not always illegal) are not fully baking in the costs to society (e.g. a trader with non-public knowledge can get ahead of the broader market, impacting the ability to have a “fair” market and increasing costs for other investors).
I strongly believe that policy makers need to be indexed with broad exposure across, at a minimum, industry sectors but more preferably the US economy (or a state’s economy if they are a state representative). There is too much room for misaligned incentives (buy our depressed stock, pass this bill, make a couple million) that should be removed.
Have to ask how this wasn't instituted in the first place, excluding the "well it's corruption, obviously" answers. Every single financial job in the private sector has extreme guidelines around this, the Fed is like a buyside firm with ultimate private information access.
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Even if they could ban them, it probably wouldn't curb their behavior. It's trivial to obscure trades. A better approach, IMHO, is to make their trades available to the public as quickly as possible, and force brokers to mandate trading grace periods for elected officials. At least then, the public has a chance to get in on the action. So if a corrupt-ass senator on the house foreign intelligence committee buys up so…
The higher ups in the fed, under the plan reported in the article, will still be able to do things like invest in a mutual fund. Applying that rule to elected officials would seem to be a good first step toward getting or obviating the type of transparency you are looking for.
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Hi Senator, congratulations on the election results! I'm u/mywittyname with Beutsche Dank I run an index fund for senators. How it works is, you give me a call anytime you hear about an opportunity and my team of crack investors will look into it, making the trade if we feel it is a good fit. We currently have 200 congresspeople on board and have been beating the S&P500 benchmark by 500% annually. It's a $1,000,000 m…
Index funds are typically passively managed unlike mutual funds. I'm not saying what you are suggesting is impossible, but generally it would go against the definition of an index fund.
Trading options on sure things can easily generate >10,000% returns in a matter of days if the swing is large enough. All it takes is a few of these sure things a year to generate staggering returns.
Imagine what you could do with $100,000 in options contracts if you knew about the next Lehman Brothers collapse. That particular event turned a $0.01 option into $50-75, the on the flip side, the manager could offer OTM puts on existing holdings that would practically nullify any loses. Granted, you don't get a LB-level event every year, but there's always a few pretty good ones each year.
If you read past the headline to just the first bullet point, you don't even have to go past there: > The Federal Reserve announced sweeping new rules for its top officials Thursday, banning trading in individual stocks and bonds. The top officials of the Fed. not congress people. The comments thread here is making me wonder if all HN comment threads are made up mostly of posters who haven't read beyond the headline.
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Why would an ambitious person run for office if the pay is low? We’ve already tried this experiment with government industries like teaching, and then we wonder why American educational policy is loosing global competitiveness.
175k/year isn't low for most of America. Not even half of that is considered low in most areas.
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just to expand, indeed their salaries are relative average. But, their benefits package both during and after tenure is generous. Their package include health & life insurance outside the general public market, social security, FERS, CSRS, personnel & office and mail allowances, office space, furniture, office equipment, food, laundry, and much more. It will definitely not make them millionaires, but will allow them…
Listen, I know we're all senior developers working at a FAANG, making between $300k-500k/year in total compensation, but $160k/yr is a giant pile of money for many, many Americans. The fact that it's $160k + health insurance plan that qualifies as "really fucking good" makes that $160k far more than the already-above-average Joe's 160k.
Quoting what I wrote about "some of _us_", as I am unclear if you are being tongue in cheek, or seriously think I think they are underpaid.