http://www.activistpost.com/2010/10/baby-boomers-get-out-of-stock-market.html
Thursday, October 28, 2010
Baby Boomers: Get Out of the Stock Market Now, the Rug is Being Pulled Out By Insiders
CNBC reports insider selling-to-buying ratio for top firms is a
staggering 3177 to 1
Eric Blair
Activist Post
If you're a baby boomer who still believes in the stock market since
the financial collapse of 2008, listen up. The floor of this Ponzi
scheme is about to drop out, leaving you punching a clock for some
time to come and holding an empty retirement bag for your effort. The
engineered crash is coming and the elite are jumping ship in droves --
you should join them and get out ASAP.
Stock market insider selling has now reached record highs. The trend
has been increasing for the last several years, but now the ratios are
getting beyond ridiculous. Earlier this month, Zero Hedge reported
that the insider selling-to-buying ratio is 2341 to 1. Tyler Durden
wrote:
After last week saw an insider selling to buying ratio of 1,411 to 1,
this week the ratio has nearly doubled, hitting a ridiculous 2,341 to
1. And while Wall Street's liars and CNBC's clowns will have you throw
all your money into "leading" techs like Oracle and Google, insiders
in these names sold a combined $200 million in stock in the last week
alone.
Today, CNBC reported that the insider selling activity at some of the
largest traded companies is at an all-time high. This can't be a good
sign of things to come. The article points to the analysis of Alan
Newman, a market strategist who tracks insider trading: "The
overwhelming volume of sell transactions relative to buy transactions
by company insiders over the last six months in key leading sectors of
the market is the worst . . . ever." CNBC reported that industry
leaders have a staggering 3177 to 1 insider sell-to-buy ratio:
The largest companies in three of the most important leading sectors
of the market have seen their executives classified as insiders sell
more than 120 million shares of stock over the last six months. Top
executives at these very same companies bought just 38,000 shares over
that same time period, making for an eye-popping sell to buy ratio of
3,177 to one.
The grand total for the three sectors are “as awful as we have ever
seen since we began doing this exercise years ago,” said Newman, who
was ahead on such trends as the dangers of high-frequency trading and
ETFs before the ‘Flash Crash’. “Clearly, insiders are seeing great
value only in cash. Their actions speak volumes for the veracity for
the current rally.”
Also quoted in the CNBC piece was Simon Baker, CEO of Baker Asset
Management, who said the insider data “is good reason for considerable
caution once the price action fades,” and “insiders normally buy early
and sell early too. Longer term -- 12 months out -- it is more of a
red flag.”
It's pretty difficult to excuse these levels of insider looting, but
the experts are doing their best to claim that these poor executives
(the titans of their industries) must take profits from stock sales
because their salaries and bonuses have been cut. Who do they think
they are kidding? Wall Street is still paying record salaries and
bonuses, reportedly worth $144 billion (about a $1000 for every
working American). There also has been very little news of other
industry executives taking pay cuts, as American companies are holding
record levels of cash to the tune of over a trillion dollars. In
fact, the flush-with-cash CEOs continue to blame the consumer class
for joblessness.
Despite the mass exodus of executives from their own company's stock,
the S&P continues to remain somewhat stable since gaining 16% from
July lows. Well, those gains seem somewhat pathetic since the value
of the dollar -- measured against the human inflation indexes such as
food and oil -- has plummeted. Major food commodities are up over 50%
since their July lows, while oil prices have climbed $10 to over
$81/bbl, or around 14% for the same time period, with predictions to
break the $100/bbl mark very shortly.
Barely covering the cost of real inflationary measures is hardly
success, especially with the current risks involved with being in the
stock market. These risks have only increased since the 2008
financial collapse that eventually caused the stock market to bottom
out the mid-6000 range. The market has been propped up with TARP
funds and driven by scandalous front-running by Goldman Sachs and
other large firms leading to 70% of stock purchases to be held for an
average of 11 seconds. Consequently, these robo-trading programs have
also been blamed for the freak "Flash Crash" in May where the stock
market plummeted over 900 points in just minutes.
The charade is almost up, as the bad-but-getting-even-worse main
street economy is not remotely factored in to Wall Street's casino
calculations. Truth is, most states are approaching bankruptcy,
unemployment continues to worsen, and yet another major scandal is
playing out with Fraudclosure Gate. Newman, the insider trading
expert, says, “At the risk of sounding like a broken record, we expect
a significant correction."
Unless you are an ultra-sophisticated trader with access to
front-running software, it is time to follow these insiders out of the
stock market and into real assets. As the Fed announces plans for
QE2, which the stock market actually views as a good thing, the elite
seem to be flocking to precious metals, commodities, and large
agricultural land purchases on the expectation of an even weaker
dollar. This appears to make gold, food, and oil pretty safe bets for
the average bloke.
