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Why Is The Smart Money Suddenly Getting Out Of Stocks And Real Estate?

Tyler Durden's picture


Just three weeks ago we noted Apollo Group's Leon Black's comment that his firm was "selling everything not nailed down," and that he sees "the market is pricey... in our view, priced for perfection." It seems he is not alone in the 'buy-low-sell-high' crowd. If wonderful times are ahead for U.S. financial markets, then why is so much of the smart money heading for the exits?  Does it make sense for insiders to be getting out of stocks and real estate if prices are just going to continue to go up?


Via Michael Snyder of The Economic Collapse blog,

If wonderful times are ahead for U.S. financial markets, then why is so much of the smart money heading for the exits?  Does it make sense for insiders to be getting out of stocks and real estate if prices are just going to continue to go up?  The Dow is up about 17 percent so far this year, and it just keeps setting new record high after new record high.  U.S. home prices have risen about 11 percent from a year ago, and some analysts are projecting that we are on the verge of a brand new housing boom.

Why would the smart money want to leave the party when it is just getting started?  Well, of course the truth is that the "smart money" is regarded as being smart because they usually make better decisions than other people do.  And right now the smart money is screaming that it is time to get out of the markets.  For example, the SentimenTrader Smart/Dumb Money Index is now the lowest that it has been in more than two years.  The smart money is busy selling even as the dumb money is busy buying.  So precisely what does the smart money expect to happen?  Are they anticipating a market "correction" or something bigger than that?

Those are very good questions.  Unfortunately, the smart money rarely divulges their secrets, so we can only watch what they do.  And right now a lot of insiders are making some very interesting moves.

For example, George Soros has been dumping almost all of his financial stocks.  The following is from a recent article by Becket Adams...

Everyone’s favorite billionaire investor is back in the spotlight, and this time he has a few people wondering what he’s up to.


George Soros has dumped his position with several major banks including JPMorgan Chase, Capitol One, SunTrust, and Morgan Stanley. He has reduced his exposure to Citigroup and decreased his stake in AIG by two-thirds.


In fact, Soros’ financial stock holdings are down by roughly 80 percent, a massive drop from his position just three months ago, according to SNL Financial.

So exactly what is going on?

Why is Soros doing this?

Well, there is certainly a lot to criticize when it comes to Soros, but you can't really blame him if he is just taking his profits and running.  Financial stocks have been on a tremendous run and that run is going to end at some point.  Smart investors lock in their profits while they still can.

And without a doubt, stocks have become completely divorced from economic reality in recent months.  For example, there is usually a very close relationship between corporate earnings and stock prices.  But as CNBC recently reported, that relationship has totally broken down lately...

That trend disrupted a formerly symbiotic relationship between earnings and stock prices and is indicating that the bluechip average is in for a substantial pullback, according to Tom Kee, who runs the StockTradersDaily investor web site.


"They've been moving in tandem since 2009, until recently. Earnings per share for the Dow Jones industrial average have flatlined and the price has taken off," Kee said. "There is something happening here that defines a bubble."

At some point there will be a correction.  If the relationship between earnings and stock prices was where it should be, the Dow would be  around 13,500 right now.  That would be a fall of nearly 2,000 points from where it is at the moment.

And we appear to be entering a time when revenues at many corporate giants are actually declining.  As I noted in a previous article, corporate revenues are falling at Wal-Mart, Proctor and Gamble, Starbucks, AT&T, Safeway, American Express and IBM.

Of course a stock market "correction" can turn into a crash very easily.  Financial markets in Japan are already crashing, and many fear that the escalating problems in the third largest economy on the planet will soon spill over into Europe and North America.

And things in Europe just continue to get steadily worse.  In fact, the New York Times is reporting that the European Central Bank is warning that the risk of a "renewed banking crisis" in Europe is rising...

The European Central Bank warned on Wednesday that the euro zone’s slumping economy and a surge in problem loans were raising the risk of a renewed banking crisis, even as overall stress in the region’s financial markets had receded.


In a sober assessment of the state of the zone’s financial system, the E.C.B. said that a prolonged recession had made it harder for many borrowers to repay their loans, burdening banks that had still not finished repairing the damage caused by the 2008 financial crisis.

And there are many financial analysts out there that are warning that their cyclical indicators have peaked and that we are on the verge of a fresh global downturn...

“We see building evidence of a cyclical downturn,” said Fredrik Nerbrand, HSBC’s global asset guru. “We find it highly troubling that the eurozone is still marred in a recession at the same time as our cyclical indicators appear to have peaked.”

In the United States, a lot of the smart money has also decided that it is time to bail out of the housing market before this latest housing bubble bursts.  The following is one example of this phenomenon that was discussed in a recent Businessweek article...

Hedge fund manager Bruce Rose was among the first investors to coax institutional money into the mom and pop business of single-family home rentals, raising $450 million last year from Oaktree Capital Group LLC.


Now, with house prices climbing at the fastest pace in seven years and investors swamping the rental market, Rose says it no longer makes sense to be a buyer.


“We just don’t see the returns there that are adequate to incentivize us to continue to invest,” Rose, 55, chief executive officer of Carrington Holding Co. LLC, said in an interview at his Aliso Viejo, California office. “There’s a lot of -- bluntly -- stupid money that jumped into the trade without any infrastructure, without any real capabilities and a kind of build-it-as-you-go mentality that we think is somewhat irresponsible.”

So what does all of this mean?

Is there a reason why the smart money is suddenly getting out of stocks and real estate?

It could just be that the insiders are simply responding to market dynamics and that many of them are just seeking to lock in their profits.

Or it could be something much more than that.

What do you think?

Why are so many insiders heading for the exits right now?


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Fri, 05/31/2013 - 10:51 | 3613570 A is A
A is A's picture

But, but, but.... Some guy on CNBC told me that the stock market is a leading indicator of the economy!?!?!

Fri, 05/31/2013 - 10:53 | 3613573 Pladizow
Pladizow's picture

I remember a year to two years ago, ZH running pieces on the sell to buy ratio of insiders being in the 1000's - yet where has the market gone?

Fri, 05/31/2013 - 10:56 | 3613586 Rubicon
Rubicon's picture

Great report. Next time we dont want something we will let you know.

Fri, 05/31/2013 - 10:56 | 3613588 King_of_simpletons
King_of_simpletons's picture

Because it's not a bubble, silly

Fri, 05/31/2013 - 11:11 | 3613640 GoldForCash
GoldForCash's picture

The light at the end of the stock market tunnel appears to be a train. Big crash coming....stock market down to 4500.

Fri, 05/31/2013 - 11:18 | 3613664 TheFourthStooge-ing
TheFourthStooge-ing's picture

Why is the smart money suddenly getting out of stocks and real estate?

They've managed to convince enough of the dumb money to jump on in because the water's fine.

Fri, 05/31/2013 - 11:23 | 3613686 fonzannoon
fonzannoon's picture

maybe the smart money is dumb. the market seems to think so.

Fri, 05/31/2013 - 11:34 | 3613727 Enslavethechild...
EnslavethechildrenforBen's picture

Can you imagine if there was a "truth" button on Google News?

Fri, 05/31/2013 - 11:46 | 3613751 MagicHandPuppet
MagicHandPuppet's picture

So, I guess now is not the time to sell my gold and silver american eagles and buy apple stock?

Fri, 05/31/2013 - 12:20 | 3613871 Never One Roach
Never One Roach's picture
Rate Shock: In California, Obamacare To Increase Individual Health Insurance Premiums By 64-146%



Don't buy ANYTHING....better save for your health care where ever you are....more important....stay healthy becuase the cost of going to a hospital is may kill you even if the illness does not

Fri, 05/31/2013 - 13:54 | 3613947 BoNeSxxx
BoNeSxxx's picture

A friend of mine was traveling overseas and he had a grabber (heart attack) which required immediate surgery.  His bill was $8,600 US which he put on his Visa happily.

What would that have cost in the United States?  

Fri, 05/31/2013 - 15:18 | 3614687 DosZap
DosZap's picture

A friend of mine was traveling overseas and he had a grabber (heart attack) which required immediate surgery. His bill was $8,600 US which he put on his Visa happily.

What would that have cost in the United States?



Fri, 05/31/2013 - 20:17 | 3615703 Its_the_economy...
Its_the_economy_stupid's picture

with no extra charge for MERSA.

Fri, 05/31/2013 - 12:48 | 3613948 Oh regional Indian
Oh regional Indian's picture

They mistry is hidden in the history of words, also known as etymology.... case in point... CARE. understnad that the operatives knwo exactly what they are saying, they do CARE for you, and this is 'CARE is killing everyone...

care (v.)
Old English carian, cearian "be anxious, grieve; to feel concern or interest," from Proto-Germanic *karojanan (cf. Old High German charon "to lament," Old Saxon karon "to care, to sorrow"), from the same source as care (n.). OED emphasizes that it is in "no way related to L. cura." Related: Cared; caring.
care (n.)
Old English caru, cearu "sorrow, anxiety, grief," also "burdens of mind; serious mental attention," from Proto-Germanic *karo (cf. Old Saxon kara "sorrow;" Old High German chara "wail, lament;" Gothic kara "sorrow, trouble, care;" German Karfreitag "Good Friday"), from PIE root *gar- "cry out, call, scream"
You see?


Fri, 05/31/2013 - 14:29 | 3614434 gmrpeabody
gmrpeabody's picture

LOLs..., while you're at it, look up:

understnad and knwo


Fri, 05/31/2013 - 12:20 | 3613875 Vegamma
Vegamma's picture

Just talked to George. He said the market is going much higher, but that's the problem. Marginal tax rates are going to 150%. Get out NOW before you have to pay the government if you make any $. You will learn to love ZIRP.

Fri, 05/31/2013 - 11:32 | 3613718 tickhound
tickhound's picture

It's gonna take a cease-fire and a serious smoke clearing to really find out who was the smart and dumb money after all this.

After this many years in this en-virun-munt, even THAT analysis has been effectively skewed.


Fri, 05/31/2013 - 20:18 | 3615706 Its_the_economy...
Its_the_economy_stupid's picture

waiting for the tide to go out

Fri, 05/31/2013 - 12:09 | 3613838 Handful of Dust
Handful of Dust's picture

Reminds me of the Groucho Marx scene in Cocoanuts where he struggles to find suckers to unload his Florida real estate lots.


It's a Classic!

Fri, 05/31/2013 - 13:51 | 3614215 therover
therover's picture

Yup....didn't that happend the last time ?  These guys always take profits first, and leave the sheep fleeced. 

Fortunately I aint' fallin for it. Been getting out since March and will have 90% in cash/PM's by June.


Fri, 05/31/2013 - 10:59 | 3613600 BKbroiler
BKbroiler's picture

yeah and I remember the gold buy calls at $1850 on here.  I'm a bear, not an idiot.

Fri, 05/31/2013 - 11:47 | 3613754 dick cheneys ghost
dick cheneys ghost's picture

one day in the future, Gold will be re-valued, overnite, while the idiots are sleeping.......

Fri, 05/31/2013 - 12:13 | 3613853 gmrpeabody
gmrpeabody's picture

Like Charlie Brown's "Great Pumpkin"..., "it'll come, just wait and see. And then you'll be sorry".

LOLs..., (timing is everything)

Fri, 05/31/2013 - 11:32 | 3613721 random shots
random shots's picture

Or ZH posting the weekly mutual funds flow and touting how retail investors were smarter than professional investors for bailing out.  I think that was 200-300 points ago on the S&P500.

Fri, 05/31/2013 - 11:35 | 3613731 Bay of Pigs
Bay of Pigs's picture

Wheres da Beedermon mon?

Moar rice n peas mon!

Fri, 05/31/2013 - 13:06 | 3614015 Oracle of Kypseli
Oracle of Kypseli's picture

Bernanke may be succeeding with certain groups of investors those who live on their SS and their savings and the gamblers.

Those still employed are staying out or they are not all in as they are not desparate for yield.

30% PM's 70% cash will give you balance on loss of purchasing power or if the dollar stays the king of currencies and all is well, not to worry about your PM insurance.

Fri, 05/31/2013 - 11:49 | 3613759 Fuh Querada
Fuh Querada's picture

I also recollect a series of reports in ZH and elsewhere on "massive insider selling" ever since the S&P topped 1000.
A similar category of report is about Soros buying GDXJ options. Rancid, spit-out scraps thrown off the table to gullible idiots like us.

Sat, 06/01/2013 - 12:59 | 3616599 dow2000
dow2000's picture

GDXJ is up about 10% since then sooo.....

Fri, 05/31/2013 - 10:53 | 3613575 Jena
Jena's picture

And with housing, this time is different!

Fri, 05/31/2013 - 11:09 | 3613633 Skateboarder
Skateboarder's picture

Olkdskool - man own house.

Newskool - house own man.

Simple as dat.

Fri, 05/31/2013 - 11:22 | 3613684 Almost Solvent
Almost Solvent's picture

Wait, you mean a $650k house own me with my $50k annual salary? But I put 3% down with my FHA loan and even got the deed in my name. 



Fri, 05/31/2013 - 12:12 | 3613849 Handful of Dust
Handful of Dust's picture

You put up 3%? I think you were my area they advertize on the FM "zero down house" every half hour.....usually followed by the "Become Rich Quick" flipper seminars and the weight loss miracle commericals....

Fri, 05/31/2013 - 13:14 | 3614037 Oracle of Kypseli
Oracle of Kypseli's picture

That's how we got there in the first  place. But now you are riding the wave again. if it shoots up you keep the upside, if it crashes, you walk away. and banks go bust again. Then your chidren will  be paying your mortgage for long time.

BTW: even so, the house still owns you (upkeep, renovations, taxes utilities and immobility.  

Fri, 05/31/2013 - 11:02 | 3613606 asteroids
asteroids's picture

Bullshit. Burn this into your head and your kids brains. "The stock market is not the economy" The FED has shattered that myth. Riddle me this batman. If smart money has left town then why are we only down 1.5% since the early May top? POMO can levitate this pig a long long time.

Fri, 05/31/2013 - 12:11 | 3613846 viahj
viahj's picture

$4.25 - $5.25 billion injected today

Mon, 06/03/2013 - 06:07 | 3619743 jaffa
jaffa's picture

In recent years, many economists have recognized that the lack of effective real estate laws can be a significant barrier to investment in many developing countries. In most societies, rich and poor, a significant fraction of the total wealth is in the form of land and buildings. Thank you.
Luxury Valley Homes

Fri, 05/31/2013 - 10:54 | 3613578 fonzannoon
fonzannoon's picture

Meh. We have been hearing this for a while. Anyone remember this from Gary Kaminsky in Nov?

Fri, 05/31/2013 - 11:02 | 3613608 Dr. Engali
Dr. Engali's picture

Hey I haven't seen Red Pill or Danny Taggart post in a while. Have they disappeared too?

Fri, 05/31/2013 - 11:03 | 3613612 ParkAveFlasher
ParkAveFlasher's picture

Cash is king.

Fri, 05/31/2013 - 12:28 | 3613898 Rusty Shorts
Rusty Shorts's picture

Can you even imaging the overhead it takes to print all those interest bearing debt intruments??? I mean jeeeeesh, the ink cost alone must take up the first five or ten minutes of each day of printing "cash" to cover...I guess times are hard for everybody :-/

Fri, 05/31/2013 - 11:12 | 3613645 Dagny Taggart
Dagny Taggart's picture

Hello Dr. Engali - not disappeared - gardening :-)

Here's a post... you will now be arrested for handing out "End the Fed" pamphlets in a public place - Philadelphia "the city of Brotherly Love"

Fri, 05/31/2013 - 11:31 | 3613715 Dr. Engali
Dr. Engali's picture

It's good to see you're still here. It seems people have been dropping off like flies.

Fri, 05/31/2013 - 11:38 | 3613738 Jena
Jena's picture

You're right.  I miss many of the regular voices.  Glad that the ones who are still present are.

Fri, 05/31/2013 - 11:50 | 3613767 dick cheneys ghost
dick cheneys ghost's picture

haven't seen PODS, FUU or MCMOLITIVE...............

Fri, 05/31/2013 - 13:25 | 3614083 YHC-FTSE
YHC-FTSE's picture

Just wondering about mcmolotov as well. I miss his/her (you never know) posts that invariably make me smile in agreement.  Bloody rare in real life.

As for disappearing regulars, I suspect they are around unless they've found a new playground.  Like others, I'm finding something new to contribute is a chore, and others here do it better anyway. 

Let's not forget to thank them and each other for making ZH what it is: A very rare outlet in a world drowning in bullshit. 

Fri, 05/31/2013 - 11:55 | 3613781 Dagny Taggart
Dagny Taggart's picture

Watching the threads when ZH oldtimers (Cog Diss, G. Gekko) post an article after an absence, there seems to be a flood of comments from those presumed to be long gone. Sometimes it is easier to lurk and read and just watch without engaging. I would suspect that many, like me, periodically suffer from a fatigue of watching the pirates continue the looting and the system plodding along corruptly. It's even harder doing simple banking chores knowing I am supporting the very system I detest. We all know it has to fall down at some point, because if nothing else, everyone knows it's unsustainable. Just amazing it keeps going like it does. It makes it that much more remarkable that Tyler, Banzai, George Washington and others can relentlessly continue the good fight on a daily basis.  

Fri, 05/31/2013 - 12:11 | 3613848 Cognitive Dissonance
Cognitive Dissonance's picture

Nearly two and a half years ago I asked "Where Have All The Zero Hedge Veterans Gone, Long Time Passing?"

Maybe it's time to revisit the subject since a second generation of ZH'ers are now slowly disappearing.

Fri, 05/31/2013 - 12:33 | 3613913 fonzannoon
fonzannoon's picture

I missed that piece CD. Thanks for reposting. I have been on here for about 3 years (was booted once and had to start over). I learned so much from so many that I really hate to see the names disappear the way they have. I believe that at a certain point when you have gone back and forth so many times on the same issues that there is just nothing left to say. I think the people that left, for the most part, have truly gone galt. There is no taking any pill from here that inserts you back in. It also saps you of your time, energy, and can take it's toll on your loved ones if you let it.

I see this going a few different ways from here. Maybe more and more people  just shrug and sign off, because there is nothing left to say. We have preached to each other long enough. I had hoped, that at some point this virtual community would graduate to a real community. As there are many of us, it is nice to know that I could probably wander anwhere in the world today, and know somene from here when I get there.

It would be a total shame to watch this place turn into a hollow shell of itself. The irony is it may be doing so at exactly the time everyone that originally tuned in here to see.

Fri, 05/31/2013 - 12:51 | 3613963 aheady
aheady's picture


Fri, 05/31/2013 - 13:05 | 3614013 Cognitive Dissonance
Cognitive Dissonance's picture

From time to time I too have suffered from Zero Hedge fatigue and have pulled back from commenting and writing. Speaking only for myself there are usually many reasons for the fatigue, but after some down time for reflection and reassessment I remember again why I am here on Zero Hedge and I return.

It is when I become idealistic and my expectations grow larger than the present reality that I become discouraged and disillusioned. The systems in place, the slave mentality and continuity bias, are powerful forces that will not be overcome in a few short years. The reason I am here is because someone must speak the truth in order to make it real and thus irrefutable. A truth unspoken can be easily ignored. A truth spoken is recognized for what it is, a refutation of the Big Lie.

So I remain long the TRUTH while I short the Big LIE.

Fri, 05/31/2013 - 13:14 | 3614039 Mrs. Cog
Mrs. Cog's picture

"In a time of universal deceit - telling the truth is a revolutionary act." - George Orwell

Fri, 05/31/2013 - 13:18 | 3614054 fonzannoon
fonzannoon's picture

"Get the fk off the internet and mow the fkin lawn!!"

 - Mrs. Fonz

Fri, 05/31/2013 - 13:29 | 3614087 Cognitive Dissonance
Cognitive Dissonance's picture

Now you've gone and done it. You're more than welcome to stick around, but when I piss off Mrs. Cog it's best if I disappear for a while. If I were you I would git while the gittin's good.

<Exit stage right for Mr. Cog.>  :) 

BTW that really IS Mrs. Cog and not an alter ego of mine.

Fri, 05/31/2013 - 13:32 | 3614117 fonzannoon
fonzannoon's picture

LOL I meant if my wife was on here that is what she would be saying to me.

Believe me the last person I mean to piss off is MRs. Cog

Fri, 05/31/2013 - 13:43 | 3614179 Mrs. Cog
Mrs. Cog's picture

LOL I knew what you meant. No worries. Cog has to mow the lawn too. I can usually just threaten to withhold radishes ;)


Fri, 05/31/2013 - 13:47 | 3614198 Cognitive Dissonance
Cognitive Dissonance's picture

Honey......since I've been growing my own radishes your control over me is greatly diminished.  :)


Fri, 05/31/2013 - 15:22 | 3614699 DosZap
DosZap's picture

"In a time of universal deceit - telling the truth is a revolutionary act." - George Orwell


As we witness exactly that on the latest D.C. disasters.The IRS and AP/Fox deal is not going away.I pray it doesn't, and it's time WE the people SERVED them.

Fri, 05/31/2013 - 13:10 | 3614025 RSloane
RSloane's picture

I don't know if you've ever been in a hurricane at night. During the eye, people come out of their homes with flashlights and try to assess damage. They start shouting into the darkness to see how their neighbors are fairing and if anyone needs help. A blind roll call is taken amongst those who decided to stay, people call out their names and their status, who still has a roof, who has all their windows gone, etc. The timing of it is very quick. Everyone knows that the second portion of the hurricane that comes after the dead calm of the eye is much worse. The reverse winds are horrifically strong and bring with them the storm surge that is heart-breakingly powerful.  Everyone offers promises of prayers for one another in the hopes that they will make it through the night, and as the winds pick up again, people run back into their shelters to await the punishment that will inevitably come.

We're in the eye right now morally, financially, and socially. Reverse winds are starting to churn, and some will seek shelter away from the rest of us. Some will come back, some won't. Entire communities are destroyed and some leave. Others stay and rebuild. Its the natural order of things, only in this case the entire hurricane event was man made which makes it all the more frustrating and despicable. Hang in there, Fonz, daybreak is coming. We will see so much more clearly then.

Fri, 05/31/2013 - 13:16 | 3614038 fonzannoon
fonzannoon's picture

Don't worry about me. I am personally having a contest with Doc to see who goes crazy first. He postures and puts up a good bravado and yes I will probably go nuts and he will probably win....

The thing that makes this all so crazy for me in particular, is I am hangin in. But the moment that I may be vindicated, I probably won't be hangin in as well. I just think what is coming is unavoidable.

Fri, 05/31/2013 - 13:53 | 3614226 RSloane
RSloane's picture

I have some good/bad news for you then. You and Doc are two of the sanest people on this board. There are many people who are but its going to take a lot to derail the two of you. And you are right again, what is  coming is completely unavoidable. It was all preventable but at this point like the reverse winds, once set in motion they can't be stopped.

Fri, 05/31/2013 - 14:17 | 3614362 fonzannoon
fonzannoon's picture

at least I have company. I hope everyone sticks around and a few come back.

Fri, 05/31/2013 - 14:55 | 3614586 TheEdelman
TheEdelman's picture

you didnt see fonzs ufo posting did you?

Fri, 05/31/2013 - 14:58 | 3614594 TheEdelman
TheEdelman's picture

touche fonz!  my second account too.  its easy to get banned and one doesnt need to be racists or vulger to do it either.  I know how but wont tell the secret to pissing off the tylers.

Fri, 05/31/2013 - 15:39 | 3614778 Almost Solvent
Almost Solvent's picture

I do miss old Leo K. Always good for a laugh.

Sat, 06/01/2013 - 21:01 | 3617391 Almost Solvent
Almost Solvent's picture

Leo K. - why you downvote me?

Fri, 05/31/2013 - 13:22 | 3614068 Patriot Eke
Patriot Eke's picture

I've been lurking a little but not posting nearly as often.  Because of world events, I've been too busy with training and preparing.  We are very close to global conflict.  That's why, in my opinion, so many have gone Galt and/or are pulling out of the markets.

Fri, 05/31/2013 - 13:06 | 3614019 Meremortal
Meremortal's picture

Prepare to continue to be amazed. 

Fri, 05/31/2013 - 13:21 | 3614067 vulcanraven
vulcanraven's picture



Watching the play-by-play of the collapse is exhausting.

Fri, 05/31/2013 - 12:03 | 3613815 ironsky
ironsky's picture

The uniforms are Fed guards.

Fri, 05/31/2013 - 12:07 | 3613825 freewolf7
freewolf7's picture

Great video!

Fri, 05/31/2013 - 13:01 | 3614003 Herodotus
Herodotus's picture

It looks to me like they were within the boundaries of a National Historic Park operated by the National Park Service.  The National Park Service may have rules and regulations that apply within the park that prohibit certain activities.

If they had stayed on the public sidwalk that was in the right-of-way of a public street under the control of the City of Philadelphia, they may not have had a problem.

Fri, 05/31/2013 - 11:15 | 3613655 RSloane
RSloane's picture

Red Pill posted a couple of days ago. Taggart I haven't seen since I came back from my hiatus.



Edit: See above my post. Welcome back Taggart.

Fri, 05/31/2013 - 10:54 | 3613581 q99x2
q99x2's picture

Piss on Bernanke.That's what it takes to get out of Oz. Dorathy had to throw water on the wicked witch. Although probably require a little more than words.

Fri, 05/31/2013 - 10:59 | 3613598 howenlink
howenlink's picture

I was more visualizing that house that came down from the sky and landed on the other witch.

Fri, 05/31/2013 - 10:55 | 3613584 stateside
stateside's picture

Ok.....but the gold share insiders are buying up stock at record paces like there is no tomorrow.  Maybe the headline should be clarified to read .....why is the smart money getting out of all stocks other than gold stocks and real estate.



Fri, 05/31/2013 - 11:21 | 3613681 markettime
markettime's picture

Its about time the miners starting doing something good with the money they are making. I was getting sick of having my shares diluted like there is no tomorrow due to thier stupid financial decisions. Maybe they will tighten thier belts and actually give the shareholders some value. 

Fri, 05/31/2013 - 13:28 | 3614091 Arius
Arius's picture

you seriously believe the diluting is reason for the basement bargain prices ? common "markettime" if you followed it just a bit you got to know better than that right ???

if that was the case it would be only certain companies ... in fact the whole sector is selling at basement level prices ... yeah we have heard the whole list - dilution, incompentent management, coming sequestration, nationalization etc.  they put the whole industry in one box - this is just pure and simple manipulation!

it is the tremendous SHORT positions on behalf of the greedy hedge fund managers who are going to have their head handed to them in due time ... they are pciking pennies in front of a streamroller ... sure they have found a nickle now and then, but it is all going to be gone ....

however, their time is past they just dont know it yet ... but thats why you got opportunities, people who take advantage of them and people who wait to read it in the newspaper how it ended the battle of Waterloo.

Fri, 05/31/2013 - 10:55 | 3613585 kliguy38
kliguy38's picture

IF and when they did pull the trough will be the biggest wash rinse and repeat EVER pulled on the would suck all the hedges and fast money through a hole so small they would make hamburger look like a side of beef

Fri, 05/31/2013 - 10:58 | 3613592 PontifexMaximus
PontifexMaximus's picture

Did Snyder see the sell tickets?

Fri, 05/31/2013 - 10:58 | 3613593 jover
jover's picture

there is more money to make while shorting gold!

Fri, 05/31/2013 - 11:05 | 3613611 rqb1
rqb1's picture

One word, taper.

Fri, 05/31/2013 - 11:05 | 3613623 Uozob
Uozob's picture

Frustrating to me is the jack ass's did push (1600oz) and are pushing /GC


Fri, 05/31/2013 - 11:05 | 3613624 Shizzmoney
Shizzmoney's picture
Why Is The Smart Money Suddenly Getting Out Of Stocks And Real Estate?

Because "smart money" is an acronym for "Access to Inside Information"?

The market is rigged, dude.  Congressmen have made a killing out of this rally.

Fri, 05/31/2013 - 11:24 | 3613691 Smiddywesson
Smiddywesson's picture

Amen to that.  Always has been.

The whispered belief that the big insiders are going to hold up the market has always been around at the top, that's how they get out and leave the little guy holding the bag.   I guess there's some truth in that, because at the top, all the poker chips are on the bullish side of the table, so they have the money to wiggle the worm long enough to distribute their stock. 

The difference today is the Fed.  This has built up so much steam it's going to explode.  Everybody's wondering what the Fed will do, but they are not going to tip off anybody that's not in the club, the stakes are too high.  People like Hank Paulson saunter into meetings with hedge fund managers when they are going to pump, not when they are going to dump.  So hedge fund managers don't concern me, but people like Soros with friends in banking, when they take profits, it's time to reduce risk, dramatically.   

Fri, 05/31/2013 - 11:40 | 3613742 eclectic syncretist
eclectic syncretist's picture

It's been one long hellacious distribution phase where everything is being distributed directly or indirectly to the Fed (=taxpayer).  So Bernanke has lead the horse to water; the companies have plenty of money available, but he hasn't been able to provide any good investment opportunities to them, and instead has destroyed investment opportunites at every possible turn. 

Fri, 05/31/2013 - 12:03 | 3613816 Shizzmoney
Shizzmoney's picture


So Bernanke has lead the horse to water; the companies have plenty of money available, but he hasn't been able to provide any good investment opportunities to them

Corporations have invested China.  Because the hidden secret is that 99% of mid-to-large market cap corporations are actually Communist constructs who only give 2 shits about America because we have porn, beer, sports, and the most money.

Remember in 2005, when Richard Fisher talked to CEOs in a FOMC meeting, he told them the problem wasn't that we import from was we were not importing ENOUGH from China.

Now that's even waning.  My company has one of our major vendors trying to raise prices by 5% across the board (with pushback from the Jews who run our company, obviously).  In turn, vendors in Vietnam, Bangledesh, and Indonesia have benefitted (and will continue to grow as China wanes into Venezuela of the 1960s). 

Thats the key point of NeoLiberalism: pit sovereigns against each other so that way, you won't have to wage currency wars - as corporate agents who manipulate labor and capital will gladly manage that for you.

This is the new centrally planned economy.  There is no "wealth effect".  There is no "growth".  Just an extraction vehicle for the 1%, who then pay off the next 20% to tell and keep the other 79% to STFU and get back to work.


Fri, 05/31/2013 - 11:06 | 3613625 Motorhead
Motorhead's picture

Unless it comes directly from Dick "Oy Vey" Bove', it's b.s.

Fri, 05/31/2013 - 11:07 | 3613628 buzzsaw99
buzzsaw99's picture

Thanks for making Soros even richer Bernanke. Oh and by the way go fuck yourself bernank.

Fri, 05/31/2013 - 11:15 | 3613657 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

The burning question is where is the 'insider information aka smart money' going?

Fri, 05/31/2013 - 11:41 | 3613746 moonstears
moonstears's picture

I too wish to know this, Dewey.

Fri, 05/31/2013 - 12:00 | 3613797 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Soros is pulling out of paper gold and TBTF bank stocks, you'd think Soros really is a closet ZH type when you stop listening to what comes out of his mouth. If we find out he is investing aluminum foil now I think there may be some validity to that.

Fri, 05/31/2013 - 13:10 | 3613991 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

And a reminder to some people around here about cash assets, that chart unfortunately doesn't breakdown which types which should include cash equivalents aka Treasurys and marketable securities (MBS). How much of that raise is due to QE? That charts rise coincides with the FED intervention aka QE.

Fri, 05/31/2013 - 11:18 | 3613665 marcusfenix
marcusfenix's picture

now wait just a minute, marketwatch just told me housing is back for real this time, the real estate bears have lost badly and should slink back to their dens in shame for ever doubting the recovery.

the mighty federal reserve bank has been proven wise and correct in it's policies and we, the lucky citizens of this great central bank nation shall reap the fruits of their long and hard labor. Ben Bernanke and his POMO's and QE's is as one gifted by god and has set us on the path to prosperity and quality, affordable housing for all.

so we all just need to stop talking, stop doubting the eden just around the corner and rejoice that we have such benevolent and humanitarian leaders, for they have guided us through the darkest of nights to a brighter, more prosperous future.

and gold, that barbaric relic of the ancient, uncivilized and uncouth past, it will not come back, it will fall to the superiority of the paper note and will be remembered no more...

ok, sorry, I can't even type this shit with a straight face, but since MDB isn't here to pimp the marketwatch piece I figured I would try to pinch hit for him, but damn I don't know how he does this every day...       

Fri, 05/31/2013 - 11:55 | 3613784 Proofreder
Proofreder's picture

but, but ...

You forgot: "you're gonna eat bye and bye, in that glorious land above the sky, 

you will eat bye and bye, you'll get pie in the sky when you die"  (that's a lie)

End of every Marketwatch predictive piece.


Fri, 05/31/2013 - 11:20 | 3613668 Downtoolong
Downtoolong's picture

The smart money is getting out because they see the  line of Muppets buying tickets is getting shorter. Plus, they need tome to get ready for party where they all stand  around clanking champagne glasses and make up hillarious jokes  about the last guy in that line.

Fri, 05/31/2013 - 11:20 | 3613675 ejmoosa
ejmoosa's picture

" If the relationship between earnings and stock prices was where it should be, the Dow would be  around 13,500 right now.  That would be a fall of nearly 2,000 points from where it is at the moment."


He's too generous.  We should be at DOW 9460 based on the P/E ratios for the last ten years....

Fri, 05/31/2013 - 11:25 | 3613678 moonstears
moonstears's picture

So what's the plan, oom short options on financials?? Listen, I love the history of B of A, despise the current model, BofA pig.

It's at 52wk highs, and a primary dealer(this scares me most), what to do?

Fri, 05/31/2013 - 11:27 | 3613702 Downtoolong
Downtoolong's picture

And now, in response, we have the daily rip to green in progress. I guess Kevin had to leave the office early this week. Probably headed to the Hamptons or LBI already.


Fri, 05/31/2013 - 11:27 | 3613704 YHC-FTSE
YHC-FTSE's picture

These "smart money" entities are full of swivel eyed gambling addicted, risk surfing lunatics who live to bet for the sake of betting, no matter how they dress up their vices and rationalise their decisions. If they "leave", they're as sure as hell waiting in the wings to swoop back to btfd to start the cycle again.  What else are they going to do? Cure cancer? Do something honest for a living? 

These days I suppose not being a crazy loon is the same as being smart. It's just rational to take a profit and go, if that's what the mentioned fund managers are doing, but I doubt any of them are prepared for what may happen when this fantasy world collapses under the weight of its own bullshit and leverage. We are most likely to see the usual summer dip in the markets - my guess is that's what they anticipate. As for RE, I have no idea but the madness may have longer to go before it pops - after all, it only just got started again.

Fri, 05/31/2013 - 11:36 | 3613733 alfbell
alfbell's picture



There was no Summer dip last year. Might not be one this year either. Things are different. Cycles are shorter.

Fri, 05/31/2013 - 11:51 | 3613770 YHC-FTSE
YHC-FTSE's picture

 I agree. Cycles are shorter, if you can call the erratic machinations of the Fed, "cycles". As for the summer, maybe. 

Fri, 05/31/2013 - 11:37 | 3613711 Sach Mahoney
Sach Mahoney's picture

Real-estate is illiquid. If you have a lot, then you can really only sell it when everyone is buying.  Feed them when they are hungry.  So they are smart to exit now into the froth, selling to dumb money, before rates rise and the economy falters. Nobody rational can explain stock prices at these levels given the global economics.  Nobody but cheerleaders that is.  So, again, if they were smart enough to see this rise in stocks, then kudos for taking profits before the global economic meltdown begins.  

Fri, 05/31/2013 - 11:33 | 3613724 mayhem_korner
mayhem_korner's picture



Was the title of this post intended to be rhetorical?

Fri, 05/31/2013 - 11:33 | 3613726 alfbell
alfbell's picture



I'm all in cash. No stocks, no real estate. I'm good for now and immediate future... Gulp! I hope.


I wonder if what Armstrong says about The Fed and what it was supposed to be is true or if this is just what the elites said it was supposed to be so it would get through the legislative branch, knowing full well that they had other plans.

Fri, 05/31/2013 - 11:41 | 3613745 therearetoomany...
therearetoomanyidiots's picture

Why is the smart money getting out of stocks...?


Well, because they've made enough off of this historic run up to current levels.  Now, all the morons are getting in and *whammo* this market will go a crashing down taking the rest of what remains of the little guys wealth. 

"This monkey's gone to heaven"  -Black Francis

Fri, 05/31/2013 - 11:50 | 3613765 HeavydutyMexica...
HeavydutyMexicanOfTheNorthernKingdom's picture

Stop perpetuating the myth of so called "Smart Money".  Having access to information that others don't doesn't make you smart, it just makes you an insider.  Would buffet be wealthy if he wasn't as corrupt as he is?  It's all been an illusion. American Exceptionalism at it's finest.  Manifest Destiny Bitchez!  

Fri, 05/31/2013 - 11:51 | 3613768 JR
JR's picture

Another word for smart money is insider money. This is not a market force. When Soros pulls out his money, it doesn’t necessarily mean that a correction is coming; it means in all probabililty there’s another fleecing coming. Look at the insiders’ financial rise from multimillionaires in the late 1990s to multibillionaires in the early 2000s. They get advance warning; that’s what insider means; it doesn’t mean “smart.”

It’s offensive to call these “decisions” smart; they are simply privy to central bank information. They are the “friends,” and in many cases the relatives, of the Fed.

Insider advance warnings is one of the ways that the investment bankers maintain their grip over the world, along with the expansion of bailouts from taxpayers; central bank monetary policies more often than not result in a direct rape of the public.

On February 6, 1929, the Federal Reserve issued an advisory to its member banks and friends to liquidate their holdings in the stock market. Then, on August 9, 1929, the Fed reversed its easy-credit policy and raised the discount rate to six percent; simultaneously the System began to sell securities in the open market, a maneuver that also contracted the money supply.  It was the Fed set-up for the crash of  '29 and the Great Depression.

It’s time we call this central planning what it is, as did  FDR’s son-in-law, Curtis Dall: “the calculated ‘shearing’ of the public by the World Money Powers.

Fri, 05/31/2013 - 11:58 | 3613794 Fredo Corleone
Fredo Corleone's picture


Fri, 05/31/2013 - 12:24 | 3613885 alfbell
alfbell's picture



Is this a fact? Do you have a copy of this Feb 6, 1929 Fed advisory? Or is this just more conspiracy rumour that just muddies up reality? I'd like to see proof. I wish posters would document it when they put out a "fact" on this blog. And just because you read something on a blog, an article or hear it on the news or whatever doesn't mean it is true, unless it is accompanied by documented evidence. Your average person just accepts whatever is said or whatever they read as the gospel... and that messes up people's lives because they then operate off of false data and make bad choices and decisions. Just sayin'.

Fri, 05/31/2013 - 12:47 | 3613946 JR
JR's picture

You want documentation, here it is. It’s on page 496 of Edward Griffin’s The Creature from Jekyll Island.

And, the following advice reprinted in the Commercial and Financial Chronicle, March 9, 1929, p. 1444 came from Paul Warburg, a partner with Kuhn, Loeb & Co., in his annual report to the stockholders of his International Acceptance Bank:

“If the orgies of unrestrained speculation are permitted to spread, the ultimate collapse is certain not only to affect the speculators themselves, but to bring about a general depression involving the entire country.”

This was from the guy who wrote the Federal Reserve Act of 1913, who maintained a list of preferred customers of “fellow bankers, wealthy industrialists, prominent politicians, and high officials in foreign governments… It was customary to give these men advance notice on important stock issues and an opportunity to purchase them at two to fifteen point below their price to the public. That was one of the means by which investment bankers maintained influence over the affair of the world. The men on these lists were notified of the coming crash.”

In short, says Griffin: “Virtually all of the inner club was rescued.”  P.497

By the way, a conspiracy is involved. And since I am suspicious of those forces taking over my country, I am suspicious of people who call it a conspiracy “rumour.”

Fri, 05/31/2013 - 18:30 | 3615383 alfbell
alfbell's picture


Be suspicious. Doesn't matter to me.

There are conspiracies and there are conspiracy rumors or altered or incomplete data about conspiracies (and there are no conspiracies where people say there are). Common sense, right? Griffin's book isn't documentation, it is just a book about The Fed (and a good one) and who knows if it is 100% factual. Warburg was supposedly a Rothschild agent and a key force in setting up The Fed... if that is true, who is going to believe anything he says? Plus, if they were trying to be secretive about this, then there is a lot that isn't known about it.

No copy of the actual document that was cited? Then I can't 100% believe the statement that it occurred. Could be totally true but how can you put it in your "true and factual file" without the proper evidence?

As an aside, I went to Jekyll Island. I went to the hotel where they stayed and had their meetings. I was in the meeting room too. There are plaques memorializing and telling all about it, and pictures of the men who attended the meetings. Yeah, big secret conspiracy. Conspiracies by definition have as their part and parcel SECRECY, or info only allowed to a select few. This was more of a manipulation done right out in broad daylight, even though the bill was passed through when most of our representatives weren't attending (as if that would've changed anything).

Fri, 05/31/2013 - 12:02 | 3613811 silverserfer
silverserfer's picture

smart money was in stocks?

Fri, 05/31/2013 - 12:09 | 3613839 JJ McApe
JJ McApe's picture

march 2009 - may 2013

loot at these gains son :)

Fri, 05/31/2013 - 12:09 | 3613835 JJ McApe
JJ McApe's picture

don't worry. aapl will hit 2000 soon :P

Fri, 05/31/2013 - 12:12 | 3613850 OpTwoMistic
OpTwoMistic's picture

It is not profit until you put it in your pocket.

Fri, 05/31/2013 - 12:16 | 3613864 Whatta
Whatta's picture

What does market pricing have to do with reality.

Reality is the FED is still cranking, and people will still want return. The only game for most people is the equity market.....

Buy, BTFD, Buy some more, Buy Japan, Buy good stocks, Buy bad stocks, Buy anything but bonds....and you win.

Win with Ben!

Seriously, as long as the reality is don't fight the fed and QE4evah, the market will be the place to be. I don't see that ending anytime soon.

Fri, 05/31/2013 - 12:24 | 3613886 andrewp111
andrewp111's picture

They are just taking profits. Smart investors always lock in profits. When the correction hits, they will be buyers again.

Fri, 05/31/2013 - 12:49 | 3613954 Madcow
Madcow's picture

Gov-Co has already tricked everyone into believing in the future so they would "invest" in "assets."

Now that the lambs are all in the slaugherhouse - it is time for a massively profitable (for bankers and hedge funds) collapse in asset "values."

At the bottom of the cycle. Gov-Co will release deflationary policy announcements - causing people to sell what they've got left to bankers and hedge funds who will then be accumulating long positions. 

And this goes on and on and on and on ... until it doesn't?

Sadly, the US Goverment and its Chief Executive are nothing more than a propaganda machine designed to mis-lead the public into taking financial positions that enrich bankers and politicians who front-run their trades. 



Fri, 05/31/2013 - 12:54 | 3613977 q99x2
q99x2's picture

Per the CNBC Nazis: Greece's economy is showing the first signs of a recovery,

Maybe everybody should move to Bankster infested Greece.

Fri, 05/31/2013 - 13:04 | 3614009 Catch-22
Catch-22's picture

Who said they are bailing out of housing… they said they stopped buying because it’s getting crowded. Let me know when they SELL.


“…smart money has also decided that it is time to bail out of the housing market…”

“Now, with house prices climbing at the fastest pace in seven years and investors swamping the rental market, Rose says it no longer makes sense to be a buyer

Fri, 05/31/2013 - 13:14 | 3614041 Judge Crater
Judge Crater's picture

If insiders are converting their assets to cash or physical gold, it can mean only one thing: that Bernanke's Fed will be decreasing the rate of QE comes September.

Fri, 05/31/2013 - 13:44 | 3614184 bugs_
bugs_'s picture

There is no where to run.  There is no where to hide.

Fri, 05/31/2013 - 13:45 | 3614188 Kirk2NCC1701
Kirk2NCC1701's picture

A: Because "Cash is king"?

Q: "Why Is The Smart Money Suddenly Getting Out Of Stocks And Real Estate?"

If 'smart money' isn't into PM, Stocks, Bonds or RE, that leaves... CASH.  The best thing to have if you know of an impending storm and want to move fast after the storm, to snap up deals/steals.

No conspiracies needed -- just common sense and a passing grade in Logic 101.

Fri, 05/31/2013 - 13:48 | 3614204 fiddler_on_the_roof
fiddler_on_the_roof's picture

ZH has been frightening people away from stock for past 4 years, since the bull market began in stocks.

What a bunch of losers!!!!

Fri, 05/31/2013 - 23:43 | 3616070 Mark Urbo
Mark Urbo's picture

The truth is that the markets are a Fed induced mirage and its highly noble to tell people not to pursue a mirage.  There is no economic recovery and the crash [courtesy] of Ben/Obama Keynesian monetary policies will be monumental.

Go fiddle over at CNBC where they will buy into your BS !



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