Insider SELLING at highest level in decades

[TwixVoy]

I was reading an article late last night regarding insider selling being sky high at the moment. Unfortunately my computer crashed when I came back to it this morning so if I can find it again I will post it here.

But this seems to me a "Titanic scenario".

Anyone remember the history of what happened on that ship? After the Titanic hit the ice berg no one on board (with the exception of the "elite few") knew what had really happened.

The under classes on board were told that everything was fine. Stay below deck and chill out.

All the while the rich were fast at work trying to jump ship while leaving the regular person behind to die.

I see the same thing going on with the market right now. The average person is being told to buy in to the market. Everything is fine. While at the same time AS I WRITE THIS the executive insiders at corporations continue plans to dump shares they own.

The same thing is going on with unemployment and people BELIEVE IT! We have been told the past week that we are in a recovery. The line is "Don't worry if you see job losses continue. Everything is fine" LITERALLY folks that is what the media has been putting out. They are literally telling you even though unemployment continues to rise just ignore it because everything is really OK.

This is like me pulling out a gun, shooting you in the stomach, you get concerned that you are bleeding excessively and me telling you "Oh don't worry you're bleeding but everything is really fine" and you accepting that as truth.

My advice is the same advice I posted when I first started to post on DU BEFORE the shit hit the fan when I posted in 3rd quarter 2007 that the numbers at the nationwide retailer I worked at had gone to shit nationwide. (and I was accused of being a liar at the time) PAY OFF DEBT. Do NOT get more debt. Cut expenses, save so you can live unemployed for an extended period of time. We are looking at a multi-year down turn the likes of which none of us have seen in our life times.

[BeFree]

1. Sad, but true

Why would anybody think that the lies from the top have ended?

[dgibby]

2. Thanks, Twixvoy.

I've followed your posts for a long time, and you have yet to be wrong about anything. Hope all is well for you and your family.

Buckle up-we're in for a long hard ride. I'm stocking up on the essentials, plus stuff I can use for barter if things get as bad as I expect them to. Am also growing my own fruits and veggies, and building my own "lifeboat" just in case the Ship of State hits that gianormus iceberg looming straight ahead.

[RagAss]

3. Agreed....but for the young folks...buy the financials...they'll be back in 15 years !!

[Greyhound]

4. K&R, this is indeed a sucker's rally and the rats have been preparing

to abandon ship for a long time, about 30 years.

41 Managed to pull off a fantasy rally and preservation of the market in 1987, perhaps Obama can duplicate that.
:kick: & R

[Uzybone]

5. How do people track insider trading?

sounds like bullshit.

Bottom line, we are not out the woods yet, anyone trying to tell you that we are (or that the media says we are) is feeding you lies. I see the same doom and gloom in the media as I see here. No one with any brains is saying we are in recovery.

[TwixVoy]

6. Are you kidding me?

You obviously don't trade stocks. Insider trading is LEGALLY required to be made public and is widely available for ANY company you want to see if it is on a public exchange. Put in the ticker symbol of a company on Yahoo/MSN Money, for example, and boom you got it. Here you go:

http://moneycentral.msn.com/investor/invsub/insider/trans.asp?Symbol=GM
Insider trades at GM, for example. As you can see they have all dumped their shares, of course.

PLEASE people if you don't know what you are talking about please don't misinform. How do you track insider trading.... what a ridiculous and ignorant comment.

[Uzybone]

7. Thanks for the info

No I dont trade stocks. It was an honest question, not a slam at you. Since the data is so easily available is there a place we can track the levels of insider trading year by year?

Is there any reason to be so insulting when someone asks a question?

[TwixVoy]

8. Yes there is

I am tired of being accused of posting "bull shit" as you so nicely put it when I am posting information that is easily available to anyone in 30 seconds. This is half the reason we are in this mess as a country and it is frustrating. People refuse to bother to think about the information right in front of them and anyone who posts useful information is accused of "bull shit".

[Uzybone]

9. I guess you have a point

anyways I appreciate the knowledge. I really had no idea that info was so readily available.

[TahitiNut]

10. It should be noted that failures to file required reports on such trades are common.

It's a big problem that's gone on for decades. Delays in reporting insider trades as required go unpunished.

[bertman]

11. Thanks for the post. I know an "investment junkie" who keeps telling me that now is

THE best time to buy stock. So, I say, "Go for it. It's your money."

Recommend.

[unblock]

16. it probably is, though you'll need a good decade or so to appreciate it

it's far more prudent to let the economy prove itself and the stock market to rise first, then buy in. lower risk, but also lower upside because you're buying higher. buying now is certainly high risk, but the upside is rather large.

so "best" in terms of risk, no.
"best" in terms of profit potential, yes.

[DemReadingDU]

12. some links to read

5/5/09 Insiders Selling At A Furious Pace
http://www.businessinsider.com/insider-selling-at-a-furious-pace-2009-5

5/5/09 MORE ON INSIDER SELLING
http://pragcap.com/more-on-insider-selling

5/11/09 What do Corporate Insiders Know?
http://www.economicpopulist.org/?q=content/what-do-corporate-insiders-know

[The Doctor.]

13. That would explain the frenzy of gold-buying right now.

[nichomachus]

14. Is this the article you were talking about?

http://blogs.wsj.com/marketbeat/2009/05/13/insider-selling-adds-to-cautious-tone/

Those who know the most about their company are now selling, a possible sign that other investors should do likewise.

Historically, insider buying has been one of the best indicators that a broad market gain was imminent. In both late November and early March, a wave of insider buying correlated with market bottoms that predated more than a month’s worth of stock rallies.

But in the last couple weeks, company chief executive and chief financial officers have gone from big buyers to heavy sellers. According to InsiderScore.com, two weeks ago there was a slight bias towards selling, while last week turned in the biggest disparity of sellers to buyers — more than 1.2 sellers for every buyer — since September.

“At the end of the day, it’s a hugely important sign. It’s one of those signs that lends a little caution and points to a good pullback here,” said Steve Sachs, head of trading for Rydex Investments.

[unblock]

15. it is true that in a recovery, jobs are nearly always the LAST metric to improve

companies don't hire unless and until they start seeing signs of upturn in the economy. few companies like to gamble on hiring first and hoping the orders come in. in economic lingo, unemployment is a lagging indicator.

that doesn't mean that things are rosy, it just means that high unemployment has little predictive value in terms of the economy. it DOES have predictive value in terms of crime rates and such, but that's another story.


in terms of economic indicators, it does seem to me as a financial insider that the economy is not going to get substantially worse in the short run. that doesn't mean it's getting better, it just means it's stabilizing. the idea of gdp showing a gain in the fourth quarter does not seem unreasonable, but that means that companies won't really start hiring until 2010 at best.

[cbdo2007]

17. Couldn't they just need the cash?

Many companies not giving out bonuses last year with executives taking pay cuts, and no raises due to economy. Yet, they've still got their big house payments, car leases, boat payments, other extravagant lifestyle shit to pay for. They made it 3-6 months on their reserves and are now needing to "cash in" some of their stock to give themselves they bonus they needed and already had spent.

Many signs the economy is improving as many important stocks, quarterlies, and estimates are going up and strengthening. If people who think they lost everything in October do their research, you can move stuff around and find many stocks that are going up multiply many times over the next 2 years.

Still poster's advice is best to "pay off debt".

[Tierra_y_Libertad]

18. See this article about the subject from Asia Times

Liquidity drowns meaning of 'inflation'
By Henry C K Liu

The conventional terms of inflation and deflation are no longer adequate for describing the overall monetary effect of excess liquidity recently released by the US Federal Reserve, the nation's central bank, to deal with the year-long credit crunch.

This is because the approach adopted by the Treasury and the Fed to deal with a financial crisis of unsustainable debt created by excess liquidity is to inject more liquidity in the form of both new public debt and newly created money into the economy and to channel it to debt-laden institutions to reflate a burst debt-driven asset price bubble.

The Treasury does not have any power to create new money. It has to borrow from the credit market, thus shifting private debt into public debt. The Fed has the authority to create new money. Unfortunately, the Fed's new money has not been going to consumers in the form of full employment with rising wages to restore fallen demand, but instead is going only to debt-infested distressed institutions to allow them to deleverage from toxic debt. Thus deflation in the equity market (falling share prices) has been cushioned by newly issued money, while aggregate wage income continues to fall to further reduce aggregate demand.

Thinking about the value of any real asset (gold, oil, and so forth) in money (dollar) terms is misleading. The correct way is to think about the value of the money (dollars) in asset (gold, oil) terms, because assets (gold, oil, and so on) are wealth. The Fed can create money, but it cannot create wealth.