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Congressional Stock Trading - If You Don鈥檛 Know, Now You Know | The Daily Show - YouTube
Channel: The Daily Show with Trevor Noah
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let's talk about congress it's the
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number one tourist destination for
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people trying to hang mike pants
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now you may not know this but most
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members of congress are forced to scrape
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by on a measly 200 000 a year salary
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which when you think about it is barely
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enough to afford a good prostitute
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so naturally they need to supplement
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their income by investing in the stock
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market
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it's a natural thing
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but if you can believe it there's now a
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new movement in congress to stop members
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from trading stocks altogether
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it's rare these days for this divided
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congress to agree on absolutely anything
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but there may be one issue
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it has the likes of alexandria
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ocasio-cortez
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and kevin mccarthy on the same side
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they're both among members of congress
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pushing for new restrictions on how
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lawmakers trade stocks democratic
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senator john ossoff just released a bill
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tonight that would force lawmakers to
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put their assets into a blind trust or
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pay a fine of their entire salary gop
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senator josh hawley is working on a
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version two and in the house there's
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already a bipartisan bill called the
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trust in congress act this comes only a
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few weeks after house speaker nancy
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pelosi doubled down on members right to
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invest in the stock market should
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members of congress and their spouses be
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banned from trading individual stocks
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while serving the congress no i don't
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know to this second one this is a free
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market in people
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we have a free market economy they
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should be able to participate in that
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okay well first of all i can't believe
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there's an issue that aoc and kevin
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mccarthy agree on
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those people don't agree on anything
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except that those kids on euphoria are
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way too horny don't you guys have
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homework
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pretty sure you can't put cocaine on a
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college application and by the way this
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bill
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is quite a move
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for a new senator like john ossoff
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think about it the guy just got to the
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senate
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and he's already coming after the
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wallets of his co-workers
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it's like showing up to prison on your
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first day and being like hey warren i
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think these guys are using spoons to dig
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something but the question still is why
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do so many representatives from across
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the political spectrum want to ban
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congress from trading stocks and why is
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nancy pelosi against that
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well let's find out in another
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installment of if you don't know now you
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know
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[Music]
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the first thing to know is that
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historically congress has had no
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restrictions when it comes to trading
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stocks for most of american history
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insider trading laws that affected ceos
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didn't apply to members of congress
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so
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if thomas edison testified behind closed
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doors
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senators could just call up their broker
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going dump all my shares and candles
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that shit's over i tell you you see they
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could use all of this advanced secret
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knowledge to make money for themselves
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and it was illegal for everyone else to
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do it but for some reason congress could
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i mean it may have something to do with
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the fact that they were making the laws
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who knows so it's no surprise that
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members of congress have been really
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good at timing the stock markets
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economists have studied the portfolios
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of members of congress and find they
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systematically outperform the stock
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market a study of data from the 1990s
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showed senators trades outperform the
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market by 12 per year
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that crushes investment guru warren
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buffett who only managed to beat the
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market by 2.5 that decade the 2008
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financial crisis turned out to be a
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free-for-all for insider trading on
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capitol hill
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according to a washington post expose 35
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members cashed out on information they
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received from meetings with treasury
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secretary hank paulson and others one of
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those attending was alabama
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representative spencer backus while
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congressman backus was publicly trying
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to keep the economy from cratering he
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was privately betting that it would
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buying option funds that would go up in
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value if the market went down
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he would make a variety of trades and
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profit at a time when most americans
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were losing their shirts now look i know
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seeing politicians profit off of an
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economic meltdown might make you angry
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but don't forget they suffered too
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do you have any idea how hard it is to
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pretend to be sad when you're making
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bank
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they had to give speeches
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of fighting the urge to do the dougie
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live on camera
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and obviously something fishy is going
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on when members of congress are doing
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better in the stock market than warren
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buffett
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i mean it definitely makes those
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fundraising emails even more annoying i
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need five dollars by midnight go
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talk to your e-trade what are you
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talking to me for i mean i don't know
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maybe i'm just jealous maybe i'm just
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jealous because members of congress they
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get all the coolest secrets you know
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which stocks to buy who the cia is
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killing where they're keeping the aliens
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every other workplace has stupid secrets
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like my coolest secret right now at the
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show is that our producer shelly is
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pregnant and she's going to surprise her
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husband on valentine's day boring
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but
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when people found out about congressmen
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making money off of the financial crash
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there was a big enough outcry that
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congress was finally shamed into
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regulating themselves they passed the
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stock act which banned members of
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congress from trading stocks based on
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private information and forced them to
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publicly disclose all their trades
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within 45 days
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but it turns out that legislation is
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like most members of congress before bed
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completely toothless
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it is certainly illegal for members of
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congress to partake in insider trading
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uh proving that uh is very difficult if
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you want to nail them on insider trading
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good luck you could essentially say
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listen i was reasonably told by my
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broker i should sell or i heard similar
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stuff from a third party doj has yet to
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successfully convict an elected member
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of congress based on this law even if
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the law is followed it barely has any
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teeth nearly 50 lawmakers both
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republicans and democrats and nearly 200
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of their staffers have repeatedly
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violated the stock act with almost no
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consequences you can make tens of
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millions of dollars with privileged
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information and what's the penalty for
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failing to report these purchases it's a
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joke it's as low as 200
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whoa
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200 is the penalty
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i mean look i'm no math expert but but
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if i have to pay a 200 fine
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to make a trade that earns me millions
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of dollars
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i feel like i'm coming out ahead
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like i'm making
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a thousand dollars in profit at least
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right
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200 is not a penalty people that's the
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chip you throw to the deal after you win
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the poker tournament hell you lose 200
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just carrying the million dollars to the
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bank
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so it turns out that the stock act is
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just another one of those laws that no
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one enforces you know like jaywalking or
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pushing all the buttons in an elevator
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and don't forget it's really hard to
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prove insider trading you can just say
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you weren't even paying attention during
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that private briefing that you got which
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as a member of congress is actually a
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very believable alibi so the stock act
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really did nothing to stop insider
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trading
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like remember remember how those
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congressmen sold those stocks before the
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crash in 2008 well the same thing
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happened again a couple of years ago
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before covert hits yeah multiple
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senators dumped their stocks after
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intelligence officials told them in a
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private briefing that all those coughing
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people in china were about to tank the
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world economy and still
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no one got punished
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which is why even after the stock act
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members of congress continue to do so
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well
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that some of them have their own
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financial groupies and no one has more
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than nancy pelosi
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some tick-tockers are getting stock
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market ideas by tracking members of
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congress and one of their favorites is
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house speaker nancy pelosi nancy pelosi
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just purchased millions of dollars in
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call options you've got to see this
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shout out to nancy pelosi the stock
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market's biggest whale apparently she's
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decided to go very heavy and tech stock
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so i'm going to show you guys which one
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she bought the queen of investing just
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spent 300 000 on this one stock so i
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think i'll be picking up a couple shares
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on monday this talk's about to go crazy
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because nancy pelosi bought it yeah
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that's right nancy pelosi is a star on
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tick tock
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and she didn't need to steal any black
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people's dance moves to do it that's
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amazing
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in fact i almost respect pelosi's hustle
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she's 81 years old
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most of her friends are probably playing
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the nickel slots right now but she knows
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that it doesn't matter if it's casinos
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or wall street the house always wins
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baby
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now
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has pelosi been so successful because of
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inside information there's no way to
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know but what's clear
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is that just being a member of congress
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means that you'll probably know about
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the bad stuff that will crash a stock
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before the rest of us
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yeah whether it's a housing bubble
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or elon musk hosting snl
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and until members of congress are banned
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from trading stocks congress will keep
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having an edge over regular people and
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it'll all be completely legal or at the
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very least so unenforceable that it's
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legal by default
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which you've got to admit is such a
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smooth way to do corruption
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you know in fact it's such a smooth way
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that leaders in other parts of the world
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are starting to take notice
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[Music]
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gentlemen
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welcome to today's lesson
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say that your people have given you the
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sacred trust of political office
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how do you use that trust to get rich
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i will pass laws
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that help those corporations in exchange
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for money
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no
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that is corruption
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what you do
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is you buy the stock in the company and
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then you pass the law
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but that is also corruption no that is
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the free market
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say it with me free market free market
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with the feeling free market free market
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put it in your bonds free market free
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market good
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in america if you say the word free
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market you can't do anything
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it is like their witchcraft but teacher
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what if i get caught
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trading on my inside knowledge then you
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pay the pen out ah
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but
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as the lawmaker
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you
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get to decide depending oh
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i'll pay
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200 dollars
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that is insultingly low
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you know what to do i will warn the
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people i'll save the children i will buy
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stocks in unprotected
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you have passed the test
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[Laughter]
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there is no title
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under the east
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[Music]
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you
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