On page A4 of Monday's paper, the WSJ revealed that Congress Members Bet on Fall in Stocks:
In February, Sen. Johnny Isakson (R., Ga.) argued on the Senate floor that "we don't need those speculating in the marketplace to take unfair advantage of the values of equities that are owned by Americans all over this country for the sake of making a buck on a short sale."
On Oct. 8 and 9, 2008—as the Federal Reserve was bailing out American International Group Inc.—an account Sen. Isakson held invested more than $30,000 in ProShares UltraShort 7-10 Year Treasury and UltraShort 20+ Year Treasury, the records show. These are "leveraged short" funds, designed to gain $2 for each $1 drop in the daily value of U.S. Treasury bonds.
As previously reported by The Journal, in 2008 Rep. Spencer Bachus (R., Ala.) made roughly four dozen trades in shares of ProShares UltraShort QQQ and its options, according to disclosure records. This fund is designed to go up twice as much as the Nasdaq 100 stock index goes down.
"I don't trade on margin"—money borrowed from a broker to raise potential returns—Rep. Bachus said in an email, "and don't consider my investments leveraged to any risky extent."
So at least we have some insight into what the ranking member of the House Financial Services Committee does not consider "risky": fully funded, non-recourse derivative positions... and derivatives thereof.