Enter senators, and returns go sky-high

[Judi Lynn]

INTERNATIONAL
Enter senators, and returns go sky-high
November 8, 2005

By Katherine Griffiths

New York -

~snip~
They are US senators who, when they are not doing their day job running the country, are rather talented at investing. Senators beat the stock market annually by 12 percent on average, the first comprehensive study of share trading by members of the US's upper house has found.

That is an impressive performance, as fund managers are thought to have the Midas touch if they regularly outperform by about 3 percent, and even hedge funds - which charge steep fees for performance - are now on average only 6 percent better than the market.

The academics who conducted the study looked at 6 000 stock transactions made by senators between 1993 and 1998. They noted that the senators did an especially good job of picking up stocks at just the right time - their buys were typically flat before they bought them, but beat the market by 30 percent, on average, in the year after.

However, it seems the senators might have been given a helping hand. Alan Ziobrowski, a professor at Georgia State University, and his colleagues concluded that at least some senators must have been trading "based on information that is unavailable to the public".
(snip/...)

http://www.busrep.co.za/index.php?fArticleId=2984593&fSectionId=613&fSetId=662

[texpatriot2004]

1. Gee, is that "insider trading"? nm

[54anickel]

2. Hey, isn't that what Martha went to jail for?...Oh, nevermind! Yes, by

all means, let's privatize SS, the markets make us all such "fair game". :eyes:

[rodeodance]

4. she was not charged with insider trading-just lying (as I recall-right?)

[54anickel]

6. Yea, guess you're right, securities fraud was thrown out

We need to get David Kelley on the horn and see if his statement still stands.

"The word is -- beware -- and don't engage in this type of conduct because it will not be tolerated," David Kelley, U.S. attorney for the Southern District of New York, said outside the courthouse.

http://money.cnn.com/2004/03/05/news/companies/martha_verdict/

[Captain Hilts]

27. It wasn't even lying, it was dissembling and being evasive...

about something that wasn't a crime!

[niallmac]

23. I thought Martha went to jail for this also.

Oh yeah. She's an uppity successful female who deserves the animosity of the working proles. Senators? We can't go around applying justice blindly.

[tblue37]

24. She also is a generous donor to Democratic candidates and causes. (eom)

[knowbody0]

3. wow, lucky investments

this is criminal.

[fed-up]

5. Insider trading and 9/11 from Cooperative research timeline

http://cooperativeresearch.org/timeline.jsp?timeline=complete_911_timeline&before_9/11=insiderTrading


http://cooperativeresearch.org/timeline/2001/reuters092001.html

http://cooperativeresearch.org/timeline/2001/ap100201.html
by Marcy Gordon
The Associated Press
October 2, 200
Early September 2001: NYSE Sees Unusually Heavy Trading in Airline and Related Stocks
The Securities and Exchange Commission (SEC) later announces that they are investigating the trading of shares of 38 companies in the days just before 9/11. The San Francisco Chronicle reports that the New York Stock Exchange sees “unusually heavy trading in airline and related stocks several days before the attacks.” All 38 companies logically stand to be heavily affected by the attacks. They include parent companies of major airlines American, Continental, Delta, Northwest, Southwest, United, and US Airways as well as cruise lines Carnival and Royal Caribbean, aircraft maker Boeing and defense contractor Lockheed Martin. The SEC is also looking into suspicious short selling of numerous insurance company stocks, but, to date, no details of this investigation have

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/09/22/BU27558.DTL
Early September 2001: Sharp Increase in Short Selling of American and United Airlines Stocks
There is a sharp increase in short selling of the stocks of American and United Airlines on the New York Stock Exchange prior to 9/11. A short sell is a bet that a particular stock will drop. There is an increase of 40 percent of short selling over the previous month for these two airlines, compared to an 11 percent increase for other big airlines and one percent for the exchange overall. A significant profit is to be made: United stock drops 43 percent and American drops 39 percent the first day the market reopens after the attack. Short selling of Munich Re, the world's largest reinsurer, is also later noted by German investigators. Inquiries into short selling millions of Munich Re shares are made in France days before the attacks. Munich Re stock will plummet after the attacks, as they claim the attacks will cost them $2 billion. There is also suspicious trading activity involving reinsurers Swiss Reinsurance and AXA. These trades are especially curious because the insurance sector “is one of the brightest spots in a very difficult market” at this time. There is also a short spike on Dutch airline KLM stock three to seven days before 9/11, reaching historically unprecedented levels.
People and organizations involved: American Airlines, New York Stock Exchange, United Airlines, Munich Re, Swiss Reinsurance been released.
People and organizations involved: New York Stock Exchange, Securities and Exchange Commission

[The_Casual_Observer]

7. You think that they might deny this?

[Carolab]

8. PIGS.

Why don't they invest taxpayer money this way?

Oh that's right, I forgot, they don't CARE about us.

[oregonindy]

9. grrrrrrrrrrrrrrrrrrrrrrrr

I think thomas jefferson and quite a few others would just cry when they hear how we've turned out. :(

[GoddessOfGuinness]

10. The article only mentions Frisht

Who else?

[Judi Lynn]

11. Haven't been able to find out, yet, but another article says there are 62

of them!

Apparently Alan Ziobrowski is still working on this:

Study finds senators profit from privileged information

STEVE CHIO Staff Writer
March 30, 2004

A new study conducted by a Robinson College of Business professor and colleagues concluded some U.S. senators profit from the use of information exclusively available to them when making personal financial investments.

Dr. Alan Ziobrowski, Associate Professor of Real Estate at Robinson College of Business, is a co-author, along with Ping Cheng, assistant professor at Florida Atlantic University; James W. Boyd, associate professor at Kent State University; and Brigitte J. Ziobrowski, professor at Augusta State University, of the forthcoming article in the Journal of Financial and Quantitative Analysis titled, “Abnormal Returns from the Common Stock Investments of the United States Senate.”
(snip)

When asked if there is any difference between a senator’s actions and insider trading, Dr. Ziobrowski stated there is not.
(snip)

Looking at data gathered from Financial Disclosure Reports, which was passed by Congress in the 1970s to create a more ethical government, from 1993 to 1998, Dr. Ziobrowski and colleagues, determined the stocks bought by sixty-two senators who invested during this time period, yielded unusually high return rates compared to the overall market.
(snip)

http://www.gsusignal.com/vnews/display.v/ART/2004/03/30/4069a3f823b09

~~~~~~~~~~~~~~~~~~~~~~~~

New Study Suggests U.S. Senators Profit From Privileged Information


February 25, 2004 (Atlanta) -Until now, the primary focus of ethical concern with respect to legislative activity has been on campaign finance reform. However, a new study forthcoming in the Journal of Financial and Quantitative Analysis suggests that some U.S Senators use information not available to other investors when making their personal investment decisions. They found that the Senators' common stock investments significantly outperformed the earnings of other investors by almost 12% annually.

According to the study, based on data from 1993 to 1998, the stocks in which the Senators invested yielded unusually high profits beginning shortly after the Senators bought them and continued to earn extraordinarily large returns for a full year. After these stocks were sold, their profitability returned to normal. The results also indicate that Senators invested far more money in those stocks that ultimately earned the greatest returns.

"This certainly suggests that some Senators knew precisely which stocks to buy, when to buy them, and when to sell them," says Alan J. Ziobrowski, associate professor at the Robinson College of Business and co-author (with Ping Cheng, assistant professor at Florida Atlantic University, James W. Boyd, associate professor at Kent State University and Brigitte J. Ziobrowski, professor at Augusta State University) of "Abnormal Returns from the Common Stock Investments of the United States Senate."

While the study did not find any reliable differences between the returns earned by Democrats and Republicans, seniority did appear to have an impact.

"We found that Senators with the least seniority, in their first senatorial term, earned statistically higher returns than those who had served in the Senate for more than two terms," said Ziobrowski.
(snip/...)

http://robinson.gsu.edu/news/04/senators.html

[1932]

26. Here's some more info:

How the senators got the abnormal returns is debatable.“That’s the conundrum, we don’t know how,” stated Dr. Ziobrowski, “I can envision a hundred different ways. Senator gets a phone call from a friend at the FDA, Pentagon; there’s a wide variety of vehicles that could be used here.”

Although, the research looked at both Democrat and Republican senators, the study did not find any significant data to suggest one party had greater returns. But the researchers found seniority to play an important role.

Meanwhile, the research showed senators with least seniority, those who are serving in their first term, had greater returns than senators who had served more than two terms.

“We don’t know why,” stated Dr. Ziobrowski. He suggested maybe “The new guys may have more need for funds…than the old guys who’ve been there for twenty years.”

http://www.gsusignal.com/vnews/display.v/ART/2004/03/30/4069a3f823b09

[Angry Girl]

12. Beating the odds seems a GOP specialty. Remember Diebold?

URGENT! Timing is critical to save earthquake victims before winter!

[Carolab]

13. But this is true of BOTH Dems and Repubs! Seniority counts...

While the study did not find any reliable differences between the returns earned by Democrats and Republicans, seniority did appear to have an impact.

[Judi Lynn]

14. Looks like the authors need to clarify this material a bit.

"We found that Senators with the least seniority, in their first senatorial term, earned statistically higher returns than those who had served in the Senate for more than two terms," said Ziobrowski.

http://robinson.gsu.edu/news/04/senators.html

If they've been working on this for a long time, one wonders why it's being picked up at this moment by the press again.

[RUMMYisFROSTED]

30. Why? See post #29.

[Nothing Without Hope]

15. No wonder Frist is so incensed that anyone thinks he did anything wrong

with his HCA stock insider trading. Would be interesting to check records for individual senators - I'll bet some are doing a lot better in this than others are. Even if no names are given, would be interesting to see the range of "magical coincidences."

Reminds me of all those transactions among GOP insiders just before 9/11 - what did they know? I'd like to find a link to a good article exploring that. ( It's been referred to as one of the lines of evidence supporting LIHOP or MIHOP.)

[Carolab]

18. Here you go

http://www.globalresearch.ca/articles/HEN204B.html

{snip}

Regardless of estimates, to Dylan Ratigan of Bloomberg Business News, the evidence was compelling; "This is the worst case of insider trading ever."

For those who dismiss the whole phenomena, here's what we do know thus far from reports from major newspapers and television news outlets around the globe. Taken separately any of the following details or comments is notable, but taken together and placed in context, the evidence of unprecedented profiteering by terrorists and/or those with prior knowledge is clearly undeniable.

[Nothing Without Hope]

19. Excellent, thanks!

It goes into the "insider trading" subfolder in my "GOP Scandals & Horrors" folder. VERY fat folder. I'll also set up a new subfolder for it within my 9/11-related folder. Another very fat folder.

BTW, would you please satisfy my curiosity about your avatar? To me it looks like a dancing M & M. :shrug: What is it really?

[Carolab]

20. It's a Latin American populist!

Stole it from a site about escaping to Venezuela!

[Nothing Without Hope]

21. Cool! I never would have guessed. I've been wondering whether it

was plain or peanut!

Thanks again - now I won't have that itch of curiosity every time I see it.

[Nothing Without Hope]

16. It would be a convenient method for bribery - no cash changes hands

but a major favor is done nonetheless - and a return favor is expected.

[ReadTomPaine]

17. What's shocking is people are surprised by this...

Inside certain circles, this is as common as LE flashing a badge to avoid a traffic ticket. Most of these people would never invest a dime without having insider information beforehand. Why bother with risk, after all? That's for the little people.

[aquart]

22. Why, that's simply amazing.

Forbid them to trade.

[1932]

25. So, is that why so many rich people willing to spend so much for

themselves and their friends to be Senators?

[BJW]

28. Would they be willing to

pass legislature requiring all elected reps to sell their shares of stock upon election and not allow any elected reps to own any stock in a blind trust or otherwise, until they leave office?

[RUMMYisFROSTED]

29. 1993-1998.

Food for thought.