Congressional Stock Trading: A Scandal So Big, Even the Moon Is Blushing!

Treasury Secretary Scott Bessent, ever the voice of reason in a world of financial chaos, has once again raised his voice against the dodgy dealings of lawmakers who seem to have a magical ability to turn their stock portfolios into gold… or at least, more gold than the rest of us. 🧙♂️

In 2024, Senate Finance Committee Chair Ron Wyden’s portfolio surged 123.8%, compared with the S&P 500’s 24.9%, while Speaker Nancy Pelosi’s portfolio returned 70.9%. Clearly, the Capitol isn’t just a place of politics-it’s a stock market with a side hustle. 📈

Bessent Urges End to Congressional Trading as House Leaders See Outsized Returns

Scott Bessent’s warning comes as asset managers take record-long positions in US equities. S&P 500 futures net long exposure has reached 49%, near historic highs. Or as the rest of us would say, “This is getting ridiculous.” 🤯

.@SpeakerPelosi and Senator @RonWyden are the poster children for a much larger problem; as I have said before, Congressional stock trading must end.

As an example from the below @RCPolitics article, during Senator Wyden’s chairmanship of the Senate Finance Committee in 2024 his…

– Treasury Secretary Scott Bessent (@SecScottBessent) December 15, 2025

Analysts say the intersection of extreme market positioning and growing political scrutiny raises questions about timing. Like, “Why are they buying so much when the market’s about to crash?” 🤔

According to EndGame Macro, a renowned analyst, regulatory attention to insider or political trading typically appears late in bull cycles, often when public frustration and valuations peak. Because nothing says “we’re in trouble” like a 49% net long position. 📉

“When the rules tighten for the people closest to the information, it’s often because the upside has already been largely harvested,” the analyst said.

A growing body of research highlights the magnitude of congressional outperformance. A National Bureau of Economic Research working paper by Shang-Jin Wei and Yifan Zhou found that congressional leaders outperform peers by roughly 47% annually after assuming leadership positions. Or as the rest of us would say, “They’ve got the inside track, and it’s not just from the coffee machine.” ☕

The analysis identifies two drivers:

• Direct political influence

Such as trading before regulatory actions or investing in firms expected to gain government contracts, and

• Access to nonpublic information

About home-state or donor companies, information that is unavailable to the average investor. Because, you know, the average investor doesn’t get a weekly briefing from the president. 🤭

Historical examples illustrate this advantage.

• Pelosi reportedly achieved cumulative returns of 854% after the 2012 STOCK Act, compared with 263% for the S&P 500. That’s more than a decade of stock picking, and the S&P 500 is still trying to catch up. 🏃‍♀️💨
• Wyden, as Senate Finance Committee chair in 2024, allegedly gained 123.8%, while his 2023 performance was 78.5%, well above the S&P 500’s 24.8%. Because why settle for a 24.8% return when you can have 123.8%? 🎯

These figures exceed many professional hedge fund returns, highlighting significant information asymmetries and raising concerns over market fairness. Or, as the rest of us would say, “This isn’t fair. This isn’t even close.” 😡

Bessent’s intervention frames the debate as a credibility issue for Congress rather than a partisan matter. Because nothing says “I’m a responsible leader” like a 123.8% return on investments. 🤯

“When members of Congressional leadership post returns that far exceed many of the world’s top performing hedge funds, it undermines the fundamental credibility of Congress itself,” he said in the post.

Public support for banning congressional trading is strong, with a 2024 YouGov poll showing 77% of Republicans, 73% of Democrats, and 71% of independents in favor. Because even the most divided people can agree on one thing: “This is wrong.” 🤝

Legislative efforts, such as the Restore Trust in Congress Act, would require lawmakers and their close relatives to divest individual stocks within 180 days. However, it would allow them to retain mutual funds and ETFs. Because why not? 📉📈

Yet, House leaders have not scheduled a floor vote, and only 23 of the required 218 signatures for a discharge petition had been gathered by December 2024. Because nothing says “I’m committed to change” like a 10% signature count. 🤷‍♂️

Opinions remain divided among lawmakers, with some warning that restrictions could deter qualified candidates, while others call reform “common sense” and a matter of good governance. Because nothing says “I’m a visionary” like a 49% net long position. 🎯

Record-Bullish Market Positioning Signals Maturing Cycle

The debate on congressional trading comes against a backdrop of historic bullishness in equities. The Kobeissi Letter reports that net long positions in S&P 500 futures increased by 49%, representing a rise of roughly 400% since 2022. Or as the rest of us would say, “This is getting out of hand.” 🤯

This is nearly double the long-term average and more than two standard deviations above historical norms. Because nothing says “I’m confident” like a 49% net long position. 📈

Nasdaq 100 futures are similarly elevated, and the S&P 500 reached 37 all-time highs in 2025, the third-most since 2020. Because why settle for a record when you can break it? 🎉

Despite this, Bank of America (BofA) issues a cautious outlook. The bank forecasts the S&P 500 to reach 7,100 by the end of 2026, only 4% above current levels. BofA cites AI-related valuation pressures and potential tech-driven consumption slowdowns. Because nothing says “I’m a pessimist” like a 4% forecast. 🤷‍♀️

Analysts suggest that the combination of extreme positioning and potential regulatory action signals market maturity rather than a new expansion. The timing of reforms potentially highlights when insiders have already captured a significant portion of the upside. Because nothing says “I’m a prophet” like predicting a market crash. 🧙♂️

This convergence of record bullish bets and growing regulatory scrutiny serves as a barometer of market cycles, rather than an immediate warning of a crash. It is also a reminder that late-cycle dynamics are shaping both equity and risk asset markets, including crypto. Because nothing says “I’m a sage” like watching the market with a skeptical eye. 🤔

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2025-12-16 12:26