How Paul Ryan Learned Goldman Was Healthier Than Citi
Give Lynn Parramore at Alternet credit for tenacity. Despite the fact that the clearly erroneous notion that Paul Ryan engaged in insider trading back in 2008 has been dismissed by most of the people who looked into it, Parramore is sticking to her guns.
She claims that my own account of Ryan’s trading indicated a trading irregularity. Ryan was basically selling shares of Citigroup every other month for most of 2008, skipping only May. Then, right as the financial crisis was reaching a crescendo, he sold shares of Citi two months in a row, in August and September. (More: The Paul Ryan Story That Won't Die—But Should)
It happens that Ryan was part of a group of congressional leaders who met with Treasury Secretary Hank Paulson and Fed Chairman Ben Bernanke on September 18—the same day he sold shares of Citigroup and bought shares of Goldman Sachs. As you know, before he ran the Treasury, Paulson ran Goldman .
Parramore looks at this pattern break as decisive evidence against Ryan. I’m not convinced. (See: Ryan's Riches: What's Behind His Wealth)
You really didn’t need inside information to make exactly this trade on September 18. It was more or less being dictated to you by the front pages of the newspapers.
Here’s a New York Times story by Ben White and Eric Dash from September 18, 2008:
Citigroup is thinking of deals it can strike with consumer banks, like buying the struggling Washington Mutual out of bankruptcy if its reported efforts to auction itself should fail, that would provide it with cheaper deposit funding…
Goldman Sachs may be under less pressure given its recent history of outperforming its peers. The bank made $11.6 billion last year and has not posted a loss during the credit crisis.
In other words, this was a totally conventional trade requiring no more privileged information than access to the morning’s New York Times.
Next scandal please? (Related: Paul Ryan In His Own Words on CNBC)
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