Posts tagged market
By Michael Snyder
Why are corporate insiders dumping huge numbers of shares in their own companies right now? Why are some very large investors suddenly making gigantic bets that the stock market will crash at some point in the next 60 days? Do Wall Street insiders expect something really BIG to happen very soon? Do they know something that we do not know? What you are about to read below is startling.
Every time that the market has fallen in recent years, insiders have been able to get out ahead of time. David Coleman of the Vickers Weekly Insider report recently noted that Wall Street insiders have shown “a remarkable ability of late to identify both market peaks and troughs”. That is why it is so alarming that corporate insiders are selling nine times as many shares as they are buying right now.
In addition, some extraordinarily large bets have just been made that will only pay off if the financial markets in the U.S. crash by the end of April. So what does all of this mean?
Well, it could mean absolutely nothing or it could mean that there are people out there that actually have insider knowledge that a market crash is coming. Evaluate the evidence below and decide for yourself…
According to a CNN article, corporate insiders are now selling nine times more of their own shares than they are buying…
Corporate insiders have one word for investors: sell.
Insiders were nine times more likely to sell shares of their companies than buy new ones last week, according to the Vickers Weekly Insider report by Argus Research.
What makes this so alarming is that corporate insiders have been exceedingly good at “timing the market” in recent years. The following comes from a recent CNBC article entitled “Sucker Alert? Insider Selling Surges After Dow 14,000“…
‘In almost perfect coordination with an equity market that was rushing toward new all-time highs, insider sentiment has weakened sharply — falling to its lowest level since late March 2012,’ wrote David Coleman of the Vickers Weekly Insider report, one of the longest researchers of executive buying and selling on Wall Street. ‘Insiders are waving the cautionary flag in an increasingly aggressive manner.’
There have been more than nine insider sales for every one buy over the past week among NYSE stocks, according to Vickers. The last time executives sold their company’s stock this aggressively was in early 2012, just before the S&P 500 went on to correct by 10 percent to its low for the year.
‘Insiders know more than the vast majority of market participants,’ said Enis Taner, global macro editor for RiskReversal.com. ‘And they’re usually right over a long period of time.’
There are other indications that the stock market may be headed for a significant tumble in the months ahead. For example, as a Zero Hedge article recently pointed out, the last time that the financial markets in the U.S. were as “euphoric” as they are now was right before the financial crisis of 2008.
And as I mentioned above, some people out there have recently made some absolutely jaw-dropping bets against stocks which will only pay off if there is a financial crash at some point in the next few months.
The topic of inflation seems to be a difficult one for many to grasp. Many do not follow economic cycles, rising market booms and the predictable busts that follow, fiat currency and the constant devaluation of the US dollar by the privately owned Federal Reserve banking cartel. Understood, as we are too busy to deal with the financial world while busy working 10 hours a day for 7 hours of wage, taking care of a family, keeping the car running, walking the dog and finding the almighty TV remote hidden behind the jumbo sized box of Twinkies (now a collectors item!).
One simple to understand example should at least cover the basics of inflation. Remember, we buy the stuff we need with US printed dollars, which is physically worth nothing, but, okay, backing up. If a farmer grew apples and you fixed cars you could trade your services for the farmers goods, barter, but, backing up.
Bottom line, if you used cats as currency and wanted to purchase a loaf of bread yesterday and then wanted to purchase another loaf tomorrow this is how much cat you would need.
Disclaimer: Prices vary per market location. Cat tolerances are ± 0.5″ length, ± 0.25″ width, adjusted for camera angle and relative humidity per photo. Past drought conditions not factored in for potential wheat damage AFFECTING BREAD PRICES, etc.
This newly discovered, expanded version of Aesop’s most famous fable bears an eerie resemblance to the modern day and sheds new light on its tragic moral.
One day a countryman checking his goose’s nest found there an egg all green and flattened. When he picked it up, it was as light as air and he was about to throw it away, because he thought a trick had been played on him. But he changed his mind and took it home and soon found to his dismay that it was a pure Federal Reserve note.
His wife had discovered at the same time an unusual egg from her own goose, an egg all yellow and glittering. When she picked it up it was as heavy as lead and she too was going to throw it away, also thinking it was a trick, for their country was apparently as rife in practical jokes as it was in mutated geese. But she took it home on second thought, and soon found to her delight that it was an egg of pure gold.
Every morning the same miracle occurred. The man was distraught; what to do with the pile of greenbacks? But the woman was overjoyed and soon became rich by selling the eggs at the town market. Also rich from his wife’s bounty, but still bursting with jealousy, the man tried peddling his own paper, but the merchants did not fall for that trick. Eventually the woman died and the man was left with both geese. As he grew rich beyond measure, he grew greedy; and thinking to get at once all the gold the goose could give, he killed it and opened it – only to find nothing. Despairing, he rent his clothes and wailed until he collapsed in exhaustion.
A vision woke him and he obeyed. He attached some of the Federal Reserve notes to a sparse tree in his yard and brought the notes to market instead of his dwindling hoard of gold. The merchants remembered he had tried peddling paper before but he explained that these were different. He said these Federal Reserve notes were leaves from a Magical Money Tree (which he called “MMT” for short) that could not be duplicated anywhere on earth, and that whosoever wished to exchange them for an egg of pure gold need only bring them to his farm.
Thanks to @Snarky_B
Published on Nov 11, 2012 by LibertyAus
Government intervention – not the rigours of the free market – is the cause of financial mayhem.
Chris Leithner speaking at the Festival of Dangerous Ideas (http://fodi.sydneyoperahouse.com/) on Letting Banks Fail, and in particular how Central Banks already have.
Whereby government intervention – not the rigours of the free market – is the cause of the financial mayhem on Wall Street that becomes economic crises on Main Street. The Global Financial Crisis shows that it is not ‘capitalism’ (Karl Marx’s insult of choice) or ‘extreme capitalism (Kevin Rudd’s) that has failed but the ‘mixed economy’. To stop these crises, we need to free the market and allow it to do its job. In a free society, no bank is so big or important that we shouldn’t let it fail.
Published on Sep 28, 2012 by LibertarianPaulicy
Rep. Ron Paul, (R-Texas), on the lack of effort in Washington to address the fiscal cliff and its impact on the economy.
Judge Napolitano: “Individual Mandate Most Bizarre Tax in the History of the Country.”
By Timothy Noah
Jon Corzine’s testimony before the House agriculture committee may mark the definitive end to the Democratic party’s love affair with Wall Street.
Once upon a time, Wall Street bankers were Republicans. Not terribly ideological, they preferred whenever possible a minimum of taxation, regulation, and government in general, but they didn’t make a fetish of it. As the GOP moved right starting in the mid-1960s the east coast Republican establishment began to crumble, and by the late 1980s it was mostly gone. These silk stocking conservatives had been driven out of the Republican party by a social agenda that frightened them, a budget deficit that threatened their livelihoods, and a base that increasingly viewed moderates as RINOs (“Republicans In Name Only”).
By the early 1990s Wall Street was ready to go Democratic. In his new book, Back To Work, former President Bill Clinton writes,
“For every person on Wall Street who resembles the character Michael Douglas played in the Wall Street movies, there are many others who give lots of money every year to increase educational and economic opportunities for poor kids and inner-city entrepreneurs.
“Most of these people are grateful for their success and know that because of current economic circumstances, they’re in the best position to contribute to solving our long-term debt problem and to making the investments necessary to restore our economic vitality. Many of them supported me when I raised their taxes in 1993, because I didn’t attack them for their success. I simply asked them, as the primary beneficiaries of the 1980s growth and tax cuts, to help us balance our budget and invest in our future by creating more jobs and higher incomes for other people.”
In crafting his first budget bill, Clinton was mindful of the bond market to such a degree that James Carville famously complained, “I used to think that if there was reincarnation, I wanted to come back as the President or the Pope or as a .400 basball hitter. But now I would like to come back as the bond market. You can intimidate everybody.”
The Wall Street-Democratic Party love affair came out of the shadows and into the sunlight when Robert Rubin, former co-chairman of Goldman Sachs, became Treasury secretary. The economy was booming, the budget deficit was disappearing, and all was right with the world. The romance deepened through most of the aughts, so much so that in 2010 Rich Lowry of National Review complained, “the Democratic majority was bought and paid for by Wall Street and corporate money.” In 2008 the finance sector actually gave more to the Democrats than to the Republicans, something that hadn’t happened since 1990.
It all started to come apart in the late aughts as Democrats realized that Rubin’s distaste for financial regulation (and that of his deputy and successor, Larry Summers, which was more pronounced) had contributed to the 2008 financial meltdown, in part because Rubin and Summers had outmaneuvered Brooksley Born, chairman of the Commodity Futures Trading Commission, when she wanted to regulate derivatives. Summers (who wasn’t from Wall Street but was a Rubin acolyte) became director of the National Economic Council during President Barack Obama’s first two years in office and the economy floundered. That deepened the alienation between Democrats and Wall Street.
Passage of the Dodd-Frank financial reform law drove the lovebirds further apart as Wall Street enlisted Republican goons first to weaken the bill (and succeeded in many instances) and then to neuter it by pressuring federal agencies to write regulations that created as little accountability as possible.
The government will report the numbers tomorrow, and the U.S. economy is forecast to have tacked on 57,000 jobs last month, helping the unemployment rate hold steady at 9.2% on the heels of a dismal June when the economy added less than 20,000 jobs.
However, a bout of disappointing economic data released recently “has begun to prompt questions about the risk of recession,” Goldman said in a note to clients, and has led some market participants to brace for a downside surprise.
Indeed, the investment bank estimates that if the jobless rate unexpectedly climbs 0.1 percentage point to 9.3% in July, and remains unchanged or increases in August, “the economy has either entered recession already, or will do so within six months.”
The finding relies on what Goldman calls a “statistical regularity,” meaning it is more of a rule of thumb than a complex statistical model. Starting after the end of the Second World War, a 0.3% to 0.4% increase from the recent trough in the three-month average unemployment rate foreshadowed an economy that has not been in recession for 18-months falling into recession within a six-month period 63% of the time. The increase as of June was 0.17%.
This phenomenon is due to an economic snowball effect: higher unemployment leads to lower household income, which, in turn, reduces consumer spending, causing even more deterioration in the labor markets.