Thursday, July 06, 2006

Is Cheney Betting on a Collapsing Housing Bubble?

According to this, Dick Cheney is betting a very significant portion of his wealth on a weakening dollar and a plunging housing market along with all that they entail:
In theory, you can tell what a person expects from how he invests. The theory hasn't been applied to important public officials much before. Kiplinger's Personal Finance applied it to the Cheneys' financial disclosure statement and printed the analysis under the provocative headline, "Cheneys betting on bad news?"

The bad news would be of two kinds: A higher rate of inflation and a lower value for the dollar.

If you add up the money in just the accounts Kiplinger's considered, he [Cheney] has between $23 million and $65 million invested. From its analysis. Kiplinger's figured that the Cheneys' total assets could be as much as $94.5 million.

Kiplinger's got the inflation hint from the Cheneys' stakes in a fund that specializes in short-term municipal bonds, a tax-exempt money market fund and an inflation-protected securities fund. The first two hold up if interest rates rise with inflation. The third is protected against inflation. The disclosure statement provides ranges for the investments, so Kiplinger's could tell only that the Cheneys have between $10 million and $25 million in the municipal bonds, between $1 million and $5 million in the money market and between $2 million and $10 million in the inflation-protected securities.

The hint about a loss of value of the dollar comes from their $10 million to $25 million in a foreign, mainly European, bond fund.

There is a caveat here. The vice president turned his money over to outside managers. Kiplinger's quotes Mr. Cheney's lawyer saying the vice president has "nothing to do" with his money.

You have to wonder, though. It's customary for top officials to put their money where they don't have day-to-day control of it. For some jobs, that's the law. Still, who could keep his lips locked if he knew something his money manager could cash in on? The hands-off approach is a fig leaf that the public demands, but a strong breeze will blow the leaf away.
For a more reactionary interpretation of all this, click here.


Blogger buyer2be said...

Not surprising, any investor and adviser would be considering a hedge in this direction. Doesn't sound like anything too different than what is being discussed in financial circles.

Jul 6, 2006, 2:43:00 PM  
Blogger Tako John said...

This is a non story except within the rabid anti-Cheney crowd. Any financial manager on the planet would diversify (and put a percentage of the portfolio in international funds.)

Jul 6, 2006, 10:25:00 PM  
Blogger mountainwatcher said...

A question for the financial experts...

What is the best place to put our savings/investments now that this RE bubble is popping?

Jul 7, 2006, 1:40:00 AM  
Blogger fredtobik said...

When everyone is digging for gold sell shovels.

Jul 7, 2006, 12:38:00 PM  

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