NYT Reveals: Ted Cruz's loan from Goldman Sachs was a bullish bet on the Obama economy

[kpete]

Last edited Thu Jan 14, 2016, 03:29 PM - Edit history (1)

.....the New York Times report that brought this story to life also contained another interesting detail that again makes Cruz look like a hypocrite and a phony. Specifically, the article mentions that the Goldman loan was a so-called “margin loan,” which was secured by Cruz’s brokerage account. Usually, notes reporter Mike McIntire, margin loans are used to purchase stocks, but they don’t have to be, and so Cruz used the proceeds to support his campaign.

But here’s the thing about margin loans: They’re always subject to the dreaded “margin call.” Since the loan is backed up by the investments you own, if your portfolio drops below a certain value, your broker can demand you top up your account with more cash—or it can force you to sell your stocks, at a loss of course.

This is a risk every investor who “buys on margin” takes: If the stock market crashes, you’re going to take a beating when that margin call comes in. Unless you’ve taken a contrarian bet, you’re rooting for peace, prosperity, and a bull market when you're buying on margin—or campaigning on margin.

But wait a minute … does that sound anything like Ted Cruz? Would a raging tea partier who’s convinced Barack Obama is doing everything he can to destroy the economy actually place his faith in the market not tanking when he’s got up to half a million bucks riding on the forbearance of the kindly vampire squids at Goldman Sachs?



MORE:
http://www.nytimes.com/2016/01/14/us/politics/ted-cruz-wall-street-loan-senate-bid-2012.html?_r=0
http://www.dailykos.com/stories/2016/1/14/1469670/-Ted-Cruz-s-loan-from-Goldman-Sachs-was-a-bullish-bet-on-the-Obama-economy

[central scrutinizer]

1. Easy to shift blame or credit where needed

If the economy is doing poorly, whichever branch of government is controlled by Democrats gets the blame.
If the economy is doing well, whichever branch is controlled by Republicans gets the credit.