Today’s Issue Is Not About Pelosi’s Trades

The Trouble With “Tracking Congressional Trades”

From the Department of “Nice Work if You Can Get It”...

But no, we’re not going to spill a lot of digital ink today on former House Speaker Nancy Pelosi’s trading activity. It’s been thoroughly documented by others and you don’t have to look hard to find it.

Besides, while our mission this week is to explore the seamy intersection of politics and finance, we seek to channel your outrage in a positive direction.

Or to put it another way, “Don’t get mad, get rich.” But we’re getting ahead of ourselves…

More than a decade after passage of the STOCK Act, stock and option trading by members of Congress remains a hot-button issue.

Passed in 2012, STOCK stands for “Stop Trading on Congressional Knowledge.”

Under the law, “members aren’t allowed to buy or sell stock based on knowledge gleaned from their jobs,” says the Beltway insider rag Roll Call. But as the magazine readily concedes, “violations are difficult to prove.” And while the law beefed up reporting requirements for congressmembers’ trades, “the penalty for failing to report begins at just $200.”

Thus, no one faced any consequences when it emerged that senators were dumping stocks in February 2020 at the very time their committees were getting daily briefings about the gathering storm of COVID.

As I chronicled at the time, two Republican senators — North Carolina’s Richard Burr and Georgia’s Kelly Loeffler — came in for particular scrutiny. Then the whole thing was swept under the rug when it turned out Democrats like the late Dianne Feinstein of California were doing it too.

Because that’s how Washington works, right?

As many congressmembers do, Pelosi aims to evade scrutiny on account of the fact that her millions of dollars in trades over the years are made by her spouse — the financier Paul “Hammer Time” Pelosi.

Last fall her staff told ABC News that she has “no prior knowledge or subsequent involvement in any transactions made by her husband.” What’s more, the statement says she’s “fully supportive” of efforts to ban congressional stock trading completely.

But wouldn’t you know it, those efforts always seem to get hung up in committee. Darn the luck…

In the last couple of years, a cottage industry has emerged in which you can follow the trades of congresscritters online.

There’s Unusual Whales, whose tweet we spotlighted above. There are also Quiver Quantitative and Autopilot. Some of the services are free, others you have to pay for.

But no matter how much or how little you pay, there’s a problem. A couple of problems, actually.

First, it’s hard to know when a congressmember’s trade is just run-of-the-mill activity — or the result of inside information that could be truly lucrative.

More important, there’s a delay between the time a trade is executed and the time it’s made public. For example, Pelosi purchased her NVDA call options on Nov. 22, the day before Thanksgiving. They didn’t become public knowledge until Dec. 22, the Friday before Christmas.

A lot can happen in the space of a month. That’s plenty of time in which the congressmember can bag a huge profit off inside information — by which time it’s too late for you to act.

No, if you want to profit from the actions of people in government, you need to know someone “on the inside” who can help put you in position ahead of time.

Which is exactly what one of Jim Rickards’ most trusted contacts, a former congressional insider, can help you do.

Joe Biden’s State of the Union speech is Thursday night. Jim’s insider friend is convinced that Biden will shock the markets by uttering two words — which will send three stocks skyrocketing.

So you’ll want to be prepared before the speech. That’s why Jim is taking part in a 24 Hour Countdown Event with his insider contact that gets underway tomorrow at 7:00 p.m. EST.

It won’t cost you a thing to look in on this live event. Registration is as simple as could be: Click here, and you’re in.

Bitcoin Sets a Record. Now What?

It took two years and nearly four months — but Bitcoin has at last surpassed its late 2021 record over $69,000.

Well, it did for perhaps a picosecond after 10:00 a.m. EST today. At last check, it’s back below $67,500. Still, that’s a huge move from $53,000 at the start of last week.

This sort of action is not unexpected in advance of a Bitcoin “halving.”

On or around April 20, Bitcoin miners will have to start putting in double the computing effort to gather the same amount of Bitcoin. Or if they put in the same amount of computing effort they did before, they get only half. That’s how the Bitcoin algorithm was programmed at the outset more than 15 years ago.

This is not the first halving. And what’s past is prologue.

“Historically, each halving has led to increased market attention and interest, sending Bitcoin up for months afterward,” says Paradigm crypto authority Chris Campbell.

“The first halving in November 2012, the second in July 2016 and the third in May 2020 each followed a pattern where the price of Bitcoin increased significantly after a period of adjustment and increased adoption, despite initial volatility and changes in mining profitability.

“While SHORT-TERM impacts on price are not always dramatic, the months and years following halving events have typically seen HUGE price rallies.

“This historical data is also pushing the price higher. Get in BEFORE the halving seems to be the sentiment.”

[Editor’s note: All that said, our resident crypto evangelist James Altucher — the guy who was talking up Bitcoin in 2013 at a mere $114 — recently revealed what he calls his No. 1 coin of 2024.

It’s not Bitcoin. And this coin has a built-in catalyst long before the Bitcoin halving of April 20. In fact, it kicks in March 13 — a week from tomorrow. You’ll learn the name and ticker free of charge when you watch this.]

Meanwhile, the stock market is sinking deeper into the red today.

The Dow is holding up best, down a half percent and back below 38,800. The S&P 500 is down nearly 1% at 5,085. The Nasdaq is down over 1.75% and back below 16,000.

No, there’s no obvious news. There doesn’t have to be. Sometimes the market just gets ahead of itself and needs time to “digest” its previous gains. The S&P is up 23.6% from its late-October lows. It’s due for a rest!

Crude is little moved from this time yesterday at $78.70. But precious metals continue to pile on the gains — gold reaching for another record at $2,130 and silver at $23.89.

Trouble in Toronto: Bitcoin Overshadows Gold

Despite record-high gold prices, the vibe is muted this week at PDAC — the big annual conference of mining companies in Toronto.

Investor money that’s pouring into crypto right now is money that’s not being poured into precious metals miners. “You’ve never heard mining people cuss out a topic like they cuss out Bitcoin,” says Paradigm’s senior geologist Byron King — who’s pressing the flesh on the convention floor in Toronto.

“Right now it’s tough for the miners to raise funds,” he goes on. “The fickle investor crowd has sold down shares in many a company, such that we have quite a large number of truly outstanding ideas just languishing in stock market limbo.

“And I mean great geological assets, in excellent jurisdictions, run by terrifically competent people, positioned for value creation. But the funds are not flowing and many market caps are unbelievably small.”

What a change from the summer of 2022.

At that time, amid a bear market for crypto, Byron attended a metals-and-mining conference in Florida — but a very different kind of conference, one geared toward retail investors.

For many years, the typical crowd for these events skewed old. A lot of white hair and bald heads — and mostly male.

But at this gathering, Byron encountered many younger people — men and women alike who amassed a nice pile during the previous crypto bull run and who cashed out at the right time. They were looking for someplace new to put their money; metals and miners looked like a good opportunity.

“Even a small number of new, younger faces at a gold conference marks a positive development for the exploration and mining industry,” he told us back then — at a time when “the overall gold sector is starved for new money, and certainly for outside capital.”

Yeah, well, much of that crowd is presumably back in crypto, riding the new wave — much to the consternation of the mining execs gathered in Toronto.

Still, their quandary is your opportunity. The sector offers “screaming bargains,” says Byron — “to include beaten-down share prices that reflect gold in the rocks and deep undervaluation by any reasonable market.”

Already, Byron tells us the glum mood on the conference floor is starting to lift with the gold price pushing still higher into record territory.

“One longtime mining guy said it best yesterday: ‘Every great bull market begins with a good day. And we’re having a really good day.’”

The Myth Behind Oil’s Recent Rally

The mainstream is getting oil’s recent rally all wrong, in the estimation of Paradigm’s macroeconomics maven Jim Rickards.

Crude is up from $68 in mid-December to as high as $80 last Friday. “Superficially,” says Jim, “this could look like a sign of economic strength to some observers, and oil inventory shortages to others, or both.”

As Jim sees it, the reality is this: “Oil prices are going up for two different reasons that serve to reinforce each other.”

The first is the ongoing harassment of U.S., British and Israeli shipping by Yemen’s Houthi faction — which will continue as long as Washington backs the Israeli assault on Gaza. “Shipping traffic, including oil tankers from the Persian Gulf headed to Europe, has been re-routed around the Cape of Good Hope. The oil keeps moving, but it takes longer and is far more expensive to transport.

“The other reason is simple market manipulation. OPEC+, which includes Saudi Arabia and Russia (two of the three largest oil producers in the world), have agreed to extend existing production cuts from prior quotas through the end of June.

“This is a sign of global economic weakness, not strength. Saudi Arabia needs the money to balance its budget and continue its economic development. Russia needs the money to replace frozen assets and maintain the war in Ukraine. Both are willing to sacrifice some volume to achieve slightly higher prices.”

But with recession approaching or already underway in Europe, the U.K., Japan and China, Jim says flagging demand for oil will overwhelm both of these factors. “Oil prices will head lower by midyear, and that’s not good news for anyone. It’s a sure sign of recession.”

Get Your Doom On! (April 8 Eclipse)

“Perhaps some context about the Little Rock ‘Eclipse Tips’ is called for,” a reader writes after yesterday’s edition.

“There are some estimates that up to a million people will be visiting Arkansas for the 4/8 event. That number may be exaggerated but still a stinking lot of people are expected. Heavy traffic? Long lines? In-laws? O yeah, some preparation is in order.”

Adds another: “Whomever is calling this fear propaganda has probably never experienced a total solar eclipse. Thousands of people come from far and wide to a pinpointed location. Consider 2017 when military units had to go around filling up people’s gas tanks, after all of the gas stations ran out. It is a real s***show.”

Dave responds: Point taken. But as I said yesterday, I don’t remember this sort of fear-mongering before the 2017 eclipse.

And I definitely don’t remember seeing anything during the event itself about a meltdown of public services in St. Louis or Nashville or Columbia, South Carolina — although I’m sure there were hiccups here and there.

But this time we’re supposed to expect some dystopian cross between the Fyre Festival and Woodstock ’99?

Sorry, but in the “charged atmosphere” of the present moment, it all strikes me as rather strange…

Best regards,

 

 

 

 

Dave Gonigam
Managing editor, Paradigm Pressroom's 5 Bullets