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Net Net: Promoting innovation and managing change

The Paul Ryan Story That Won't Die—But Should

Newly announced Republican vice presidential candidate, U.S. Rep. Paul Ryan (R-WI) speaks during a campaign rally in front of the USS Wisconsin August 11, 2012 in Norfolk, Virginia.
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The notion that Paul Ryan bought shares of Goldman Sachs in September 2008 because of information he garnered as a top Republican congressman is the stuff liberal fantasies are made of:

Ryan! Financial Crisis! Goldman Sachs! Insider Trading!

But that’s all they are—fantasies.

There is simply no persuasive evidence that anything even slightly untoward occurred. Yet here the story is again, this time from Lynn Parramore of Alternet.

Here’s what we know.

Ryan reported a lot of trading in 2008. He bought and sold 29 different stocks or mutual fund shares. He reported trades for every month, almost like clockwork, except for May. Most of his transactions were sales of existing positions. (More: Paul Ryan's Unfortunate Bank Stock Trades)

For example, Ryan sold AT&T in February, July, August and October. He sold General Electric* in February, August, October, November and December. He sold JPMorgan in January, July and September. He sold Wachovia in January, June, August and September.

He did trade in and out of two financial names in 2008: Goldman Sachs and Citigroup. He sold shares in Citi in January, March, June, August, September and December. He bought Citi in February, April, July and October. In other words, Ryan was following a pattern of alternating between buying and selling shares of Citi throughout the year.

The only breaks in this pattern were (a) when he neither bought nor sold any stocks in his portfolio in May, (b) skipping November’s sale of Citi and selling in December instead, and (c) selling shares in Citi in both August and September.

Ryan sold shares in Goldman in February, August, October, November and December. He bought shares in Goldman in January, March, June and September.

Notice a pattern here? Each of Ryan’s purchases of Goldman shares coincides with the sale of a share of Citi.

Ryan follows this pattern of going long Goldman when he sold Citi on September 18. That day, Ryan also took part in a meeting where Hank Paulson and Ben Bernanke met with Congressional leaders to make their case that the situation in the financial sector had turned so dire as to threaten the entire economy.  (Related: Wall St. Wonders: Can Ryan Really Help Mitt?)

Ryan reports that that day, he sold shares in JPMorgan , Wachovia and Citi, while buying in Goldman. This is the transaction that has been attracting so much attention.

The problem with the claim that this is evidence of insider trading is that the trading is too normal for Ryan. There’s no evidence of abnormal behavior in him selling stocks on the 18th of the month, or selling these particular stocks. What’s more, buying Goldman on a day he sold Citi was also a part of his regular pattern.

This just isn’t evidence of insider trading in any way.

*(GE maintains a minority holding in CNBC's parent company.)

by senior editor John Carney

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