Behind the hoopla of the mainstream financial pundits, behind the forced exuberance of the talking heads on the business news networks, behind the shills who pimp themselves for Wall Street, there are, like a dark, ominous thunderstorm on the horizon that is the precursor to a dangerous rash of tornadoes soon to descend from the sky, chilling signs that the stock market is on its way to being taken down. If and when this happens, there are going to be trillions upon trillions of losses that will drive the final nail into the financial coffin for baby boomers, retirees, pension funds, and the world economy at large.
This may seem hard to believe to the novice investor. After all, in just the last three months, US stock markets have rallied 6.5%; the Dow flirting with 14,000 and the S & P Index within seemingly easy reach of its 2007 high of 1576.
However, there are foreboding danger signals lurking behind the giddy “ticker tape” exuberance of the CNBC, Fox Business News, and Wall Street Journal pundits. Just one of these should put a chill up the spine of any seasoned investor. Let’s take a look at some of these.
WALL STREET INSIDERS SELLING – The Vickers Weekly Insider is reporting that in the last few weeks, insider selling of company stock was nine times greater than any buying. The last time executives sold their company stock this aggressively was in early 2012, just prior to the S & P making a 10% correction to its low for the year. Writes David Coleman of Vickers Weekly, “Insiders are waving a cautionary flag in an increasingly aggressive manner.” Enis Taner, global macro editor for RiskReversal.com, agrees, saying, “Insiders know more than the vast majority of market participants. And they’re usually right over a long period of time.”
In addition, CNBC reported last week that JP Morgan executives have just dumped over $6 million dollars of personal shares in just the last ten days, in what trading experts have referred to as “unusual activity.” Unusual activity indeed! When a gaggle of top bank executives in the nation’s large bank suddenly unload $6 million of their own shares, you had better pay attention.
BILLIONAIRES DUMPING STOCKS – Famous billionaire traders, such as Warren Buffet and John Paulson, have been unloading shares in their funds at a brisk pace. Buffet’s holding company, Berkshire Hathaway, has been dramatically reducing its exposure to consumer related stocks, selling nearly 19 million shares of Johnson & Johnson. Berkshire Hathaway also sold its entire stake in computer parts giant, Intel. Commenting on this, investmentWatchblog.com presciently adds, “With the 70% of the US economy dependent on consumer spending, Buffet’s apparent lack of faith in these companies’ prospects is worrisome.”
Not to be outdone, fellow billionaire John Paulson, who made his vast fortune by short selling the sub-prime mortgage meltdown, is vacating US stocks as well. Paulson’s hedge fund, Paulson & Company, dumped 14 million shares of JP Morgan Chase last year, along with liquidating its entire position in consumer goods maker, Sara Lee, and discount retailer, Family Dollar.
It is also reported that George Soros last year sold his entire portfolio of US bank stocks. If this is true, this in itself should be a glaring warning sign.
GOOGLE CHAIRMAN SELLING LARGE STAKE IN PERSONAL SHARES – Google, Inc., executive chairman, Eric Schmidt, has notified the SEC last week of his plans to sell 2.51 billion of his shares in the company. This represents an astounding 42% of his stake in the internet search giant. Since nearly all of Google’s income is derived from advertising revenue, it would seem that Schmidt may be seeing the writing on the wall that the bull market for equities is coming to an abrupt end.
ENORMOUS PUT OPTION S & P ACTIVITY – Last week, an anonymous trader bought 100,000 put option contracts on the exchanged traded fund (ETF) XLF, which charts the S&P Financial Select Sector Index. What is especially revealing about this is that this order has a very short time premium, expiring on April 25, 2013. This, then, represents an enormous one million share short-term bet that financial equities are soon to take a very big hit. Normally, the maximum high-end option contract purchase will not be greater than 500. That’s why astute professionals took notice, last week, when a put option purchase 200 times of the normal high-end range hit the trading floors. An order of this magnitude (especially for such a short time span) absolutely screams of insider foreknowledge of a possible giant sell-off.
It is time to be forewarned! All the big money interests are selling into the last hurrah of the last financial bubble. This same group did it to the investing public at the end of the tech-stock rally of the late 1990s. They did it again to John Q Public with the sub-prime mortgage collapse in 2007, and they are getting ready to do it again. This time, we believe, is going to be the real BIG ONE, a mafia-style bust-out scam for the ages. Trillions upon trillions of hard-earned dollars may be erased. Protect yourself and move all your assets accordingly. We specifically recommend precious metals as the ultimate safety net for such a financial catastrophe.
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Written For: Liberty Gold and Silver News Blog