Corporate America still hyping stocks as insiders sell

[WhoCountsTheVotes]

The Wall Street Journal has an interesting story this morning. In an article titled "Insiders' Moves In Face of Rally Spark Concern" they claim that company executives are selling and buying has fallen sharply. It seems that the stock market is doing well, indexes are up, and at the same time, corporate executives are selling their shares at a rate higher than anytime in two years.

The business and commercial press and television shows continue to hype stocks, and point out the rally in the stock market is evidence that the economy is recovering, yet the corporate executives and other insiders keep selling, indicating that they don't believe their own hype.

This shouldn't surprise me should it?

[section321]

1. Saw a guy on Wall Street Week last Friday saying the same thing...

Maybe he was the inspiration for the story.

I can't remember his name, but he owned a firm that advises institutional investors on trends in insider trading (the legal kind, not the illegal kind)

He was pointing out that there is a lot of insider selling right now. By his model, now was not a good time to get in the market. Confident executives will buy into a rise, not sell.

[section321]

8. Here's a link to the interview.....

It was Nightly Business Report, not Wall Street Week (shows you what kind of TV I watch...)


http://finance.lycos.com/home/news/story.asp?story=35303175



The guy's name is George Muzea.

[roughsatori]

2. No it should not

According to the corporate media:

1) We never had a recession.
2) If we did have a recession it was Clinton's fault.
3) Our glorious leader Shrub already has us in the midst of a "jobless recovery."
4)The pesky un-employed are that way because they are demanding exorbitant salaries so why should we count them.
5) Corporate greed has been imbibed with the Holy Spirit, it is God's will to steal from the little people.

[GainesT1958]

3. Sounds as though they're playing much the same game...

That got them in trouble with Elliot Spitzer in New York--hyping over-valued stocks, and talking up a rally when none is justified to the public, while privately selling out as fast as they can in anticipation--or to protect against what they think--is really coming; i.e. the "second dip" of this recession. And why wouldn't it, with people like Pillowtex in North Carolina laying off over 5,000 workers. WHAT "recovery"? :mad:

These guys THINK they know what's going on, and they've got a pretty good idea what's going to happen in the next year. If the "D" word--i.e. DEflation--starts to take hold, they DON'T want to be caught holding the bag with hundreds of shares of greatly overvalued stocks. If indeed deflation occurs, that means the economy loses steam for the long haul, and I'm talking several years. Plus, all of them were counting on a windfall of another sort--oil from Iraq lowering the cost of a barrel of crude, and so gasoline prices. Hasn't happened, and probably won't for the next two years, minimum. So much for THAT spurring the economy to recovery. Mortgage interest rates increasing will, in turn, choke off any great surge in real estate; so much for THAT economic spur, as well. So when you think about it, it's no wonder these guys are selling off stocks as fast as they can--to unsuspecting investors like us! x(

B-)

[tom_paine]

4. Yep, crash coming. Only question is "how bad?"

The longer that Goebbels v2.0 shields the lie, the worse the fall will be when the "rubber band" finally snaps.

[On the Road]

5. I Bought $20,000 of Bear Funds Last Week

Half BEARX and half URPSX.

If nothing else, it's seasonal. September and October are usually bad months for the market. It's still overvalued.

I think being in cash is safe, at least until November.

[KoKo]

6. Ribo.......what's your time frame for your Bear Funds......hope it's long!

We have small banks in NC who have had their ratings downgraded because they loaned over the regulated minimum to Commercial Real Estate borrowers. You wouldn't believe the empty new Commerical Buildings we have with "for lease" signs all over. These little banks start to default....then it dominoes. Plus there's that "Homequity Thing" waiting to blow out there..........

Obviously you are a "Big Player....." and know what you're doing sinking that much cash in.....but aren't you worried at what's down the road.......or do you have a 10 year time frame! Your post caused me to break out in hives! LOL's

[samsingh]

7. with all the underlying weakness

it is strange that the markets are going upside - or maybe not so strange if big money is up to something.

[TahitiNut]

9. It's a form of inflation.

We saw it in the last 3 years of Clinton/Gore. Too much investment money chasing derivatives without a mechanism to translate such investments into increased values. Resales of existing stock on the markets causes NO money to go to the business itself. This is the fundamental myth of "supply side" when it comes to equities markets. Capital isn't going into the longer term prospect of starting new businesses nor are businesses able (they don't have the balance sheets to support borrowing) to sell bonds and use the capital so acquired to expand business that's already too far below its existing production capacity. The "investments" are going into the greater-fool stock market, where merely buying a limited number of equities causes an increase in their price, but not their value.

"Inflation" is typically defined as "too much money chasing too few goods". It can happen in derivative markets as well. That's what nailed California in the energy derivatives market. The money spent on energy had no way of being invested in actual power generation capacity.

[WhoCountsTheVotes]

10. "Resales of existing stock cause NO money to go to the business"

Good point, I wish more people realized that. There's a guy at my work who always goes on about the "greater fool theory" of the stock market :)

[Oracle]

11. Do you have a link?

[WhoCountsTheVotes]

12. no I copied the quotes from the actual paper

WSJ online news isn't free - they only give away their worthless right-wing editorial page, since no one would pay for that tripe.

Their reporting is top-notch, and not cheap unfortunately.

[mistertrickster]

13. Maybe the reason the "insiders" are selling is simply because

the prices are up high enough to make selling worthwhile. People don't like to sell at a loss and may have just been waiting for prices to go up . . .