The Jubilee

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CNBC: Congressman Ron Paul is a big fat fraud!!

Posted by Alex Krainer on June 20, 2010

Anyhow, that’s what CNBC would have you believe, hoping that you are as gullible and airheaded as they must assume you are. Working in the financial industry, I have the unhappy privilege of having CNBC running continuously on TV screens scattered around the office.

Last Monday (14 June 2010), the network’s sexy mouthpiece Becky Quick announced that Texas Congressman Ron Paul, best known for pushing for a return to the gold monetary standard, has invested his personal wealth into stocks of gold-mining companies. Oh, and to be fair and impartial as CNBC invariably is, Ms. Quick also added that Dr. Paul’s investments don’t violate any laws…

She left it at that – a Quick smear just making sure you know what a greedy slime-bucket Dr. Paul really is. In case you thought his 20+ years’ crusade to set the United States back on a sound money standard was motivated by anything more than personal greed, CNBC did its bit to set you straight. Thank you CNBC.

My only regret is that CNBC did not extend the journalistic excellence we’ve all come to know and admire to other us Congressmen (and women). But you have to understand, they have so much news to cover in a short 24-hour period… So in my humble attempt to make the world a better – or at least, a more informed – place, I’ll briefly fill in the bit of context they had to leave out due to the obvious time constraints. Here’s a paragraph from my up-coming book on investing that CNBC, the excellent, informative, probing, supersonic network with all-handsome, all-sexy cast from their super-technological studios all around the world had to omit:

Researcher Alan Ziobrowski of Georgia State University looked into the stock-trading performance of US Senators over the period from 1993 through 1998. He became intrigued with the subject after reading in a report that three out of every four members of the US Congress who traded stocks had investments in companies directly affected by their legislative activity. In an eight-year collaborative effort with researchers from three other universities, Ziobrowski found that US Senators beat the markets on average by 12 percentage points per year. That was even better than corporate insiders who only beat the markets by 5 percent, not to mention the Senators’ typical constituents who on average underperformed by 1.4 percent.

Of course, Senators wouldn’t be Senators if they were stupid. So, as a smart group of people, you’d expect that they’d outperform their, on average, dumber constituents. But still: the ability to systematically beat the markets is very difficult and very unlikely for any group of investors. Doing so over a 5-year period by a whopping 12 percentage points per year is beyond the reach of even the best professional investment managers. Ziobrowski found that the Senators, “had an uncanny ability to pick the right things on the right days.” And yes, Ms. Quick is correct: it isn’t against the law for Congressmen to trade the firms they regulate. It is they who write the laws, after all.

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2 Responses to “CNBC: Congressman Ron Paul is a big fat fraud!!”

  1. seincire said

    Love Ron Paul!

  2. Dr_Snooz said

    Ron Paul is always so careful to avoid saying anything truly dangerous. He confines his efforts to impossible tokenism. He’s all talk and no action. Other than a lot of hot air, his contribution to history has been…what? That’s actually a good thing, because he’s clueless about finance. A gold standard does not ensure sound monetary policy. Nixon abandoned gold because he had been pursuing a sloppy policy for years prior. Globally, a gold standard will ensure a return to the mercenary monetary policies of mercantilism. Ron Paul’s popularity is really a sad commentary on just how easily fooled Americans are.

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