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The Folks Who Know the Most About Their Firms… and the Economy… Are Selling the Farm
Stocks rallied last week when a non-voting member of the Fed stated something totally pointless (that the Fed should consider postponing its taper… when there’s only $5 billion left in QE anyway).
Put another way, the markets were so desperate for a Fed intervention that the idea of $5 billion coming later rather than now makes a difference some how. It’s pathetic, but when 70-80% of market volume comes from non-thinking computer trading programs, the words “Fed” and “President” matter more than common sense.
Deep down, just about everyone knows this whole “bull” market is based on the Fed. Various pundits will prattle on about earnings and the like, but the reality is that earnings are heavily massaged. Heck even 30% of CFOs admitted in a study to knowingly overstating earnings.
Moreover, all that record cash produced by these record profits is dwarfed by the record debt that corporations took on to goose EPS through stock buybacks.
And this reveals the true state of affairs for both the economy and the stock market.
Take a look at how C-level executives have steered their companies since the 2008 Crisis. Most of the increase in profit margins came from lay offs. The extra profits produced by this combine with debt issued to buy back stock…not cap ex or hiring.
The buyback then helps facilitate higher share prices, which said executives then use to cash out their options and dump their personal stakes in their companies at a pace not seen since 2000.
Put another way, those individuals responsible for running the largest companies in the US, who know more about their companies’ growth prospects and the economy have used the Fed’s policies to cash out.
How telling is it that they’d rather have cash than stock? They would rather have this money sitting in a bank account earning next to nothing, or in a bond earning only slightly above nothing, than in stocks.
Of course, some of the money went towards buying luxury art work and luxury real estate which helps explain the strength in those markets… but you get my point… the captains of industry don’t want to be in their own stocks.
And remember, these are also the folks at the front-lines of the economy. They know the data from their own firms before anyone else in the public does… including the Fed or BLS.
And they’re dumping stocks.
The whole mess will come crashing down, just as every other funny money fueled bubble does. The fact that we’ve got the following says it all:
1) Corporate debt is back to 2007 PEAK levels.
2) Stock buybacks are back to 2007 PEAK levels.
3) Investor bullishness is back to 2007 PEAK levels.
4) Margin debt (money borrowed to buy stocks) is at 2007 PEAK levels.
5) Investor complacency is at a record LOW.
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Best Regards
Phoenix Capital Research
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Of course optimism is at an all time high. We've never acted so low. Thank God we were given free passage through the looking glass! Our God is good!
No question that Lincoln has been treated by Academics, Government propaganda sites, and practically every black venue as some kind of Saint, a popular "superman" with the most magnificent of abilities, awe-inspiring speeches, Emancipation, and had his ugly face sculpted into Mt. Rushmore.
The Clinton admenstruation's propaganda machine might be considered one of the best in rehabilitating while it is happening, a history of the country's most criminal POTUS in history, but Lincoln's machine takes the Oscar.
Only a conspiracy of the highest order could have had a POTUS -----who jailed newspaper editors, suspended habeus corpus, and sanctioned the killing of 600,000 the maiming of another 600,000 and ruining millions of families, allowing Sherman to burn to the ground beautiful cities, rape and pillage countless towns on his personal Jihad------elevated to hero status. while ignoring all his other war crimes committed in the name of an anti-secessionist despot, tyrant, and singularly unaccomplished scumbag.
It is a testatment to power that the 'winner' can be lionized and crowned great, when he couldn't negotiate a peaceful agreement with the southern states, nor could he accelerate the general wind down of slavery, the mark of a truly great man.
That the masses bouight this bullshit, never question it, and continue to believe the lies, falsifications, and PR campaign that keeps lincoln in his pride of place is one of the biggest con jobs ever pulled by Power.
the current pigs have ruined the future for our kids and grand kids...the likes of alan greenscam, janet yellen, ben bernanke robert reuben, and other clowns... our fate was sealed when they abolished glass steagall and of course the birth of derivatives. the greed is out of control people like jim rogers will be correct...the day is comming...I really do not think they can maintain the current controlled environment for to much longer...when it goes we will come for them...they know it and they fear the masses, just like louis the 16th, czar nicolas...and others of the privileged class we the sheep will become wolves and we shall trim the herd.
Their leverage is limited .
All anybody gets is 52 at a time .
https://www.academia.edu/8844507/How_important_are_you_
A rich man...
See http://andreswhy.blogspot.com/2009/07/phaistos-disc.html
The twists of wealth
http://andreswhy.blogspot.com/2009/07/rabbits-and-singularity.html
Travellers...
http://andreswhy.blogspot.com/2009/07/bronze-age-credit-cards.html
SMOKE & MIRRORS
obola IS A FAKE
Captain Solyndra kLAIN
Is not back to cure OBOLA,or stop it.
Welcome to Globle Warming REenergizer
"Stimulus Package" 2
He is back to setup the end run for globle warming, which is a huge money laundering scheme moving money from the productive class of America to Democrat donor and the progressive's DNC's pockets.
Aint that right Mr.Po
Free is a very interesting word; psychologists have found that people will engage with programs and continue with them, even after it becomes clear that they are not free; provided that the word FREE is in the original advertising. I wish they would ban all newsletter floggers from this web-site; but it doesn't seem likely.
Like when compact discs were first invented and we were told that they were reeeeeeeeeeeeeeeeally cheap! They only cost twenty cents to make. So why did they go on sale for thirty dollars then? (Back when LPs cost ten dollars. On the plus side, that was 30 years ago and the price hasn't really changed. A lot of them are cheaper now.)
Or like when the internet first went mainstream and they said you could plug into the whole world for the price of a local telephone call. But they forgot to mention the ISP fees.
FREE EBOLA.
Now with new and improved airborne transmission.
I love shovelhead's. I rode my 80cu. in. stocker from northern Calif. to Guadalajara, Mexico and back and then to Canada and back. Of course I like pan-heads better, but I never ran into a good deal on one.Vee-twin engines are very interesting, they're a sort of aircraft radial engine with most of the cylinders missing. I always enjoyed working on them.
is this an add to buy precious metals? same shit old story when will the metals start to increase.
How about News stating that Silver offers some protection against Ebola?
They know the price of everything , but not the value of anything .
Worse , when both fluctuate , their courage deserts them and they gaze on the empty shores of spring-tide promises .
Wealth rends their fearlessness , and renders weak the limbs of their endeavour .
https://www.academia.edu/8409789/Wealth_and_Fluctuation
May be true but the author did not give any back up statistics, sources, footnotes etc so this is another fire and brimstone sermon, not a research report. Please change name to Phoenix Capital Church.
Which one of the five points he claimed do you want to dispute; why not do some research and try and find out if it;s true or false ?
Wall St stock market is another word for counterfeit money launderers. Remember Weimar...
I like gold and own some. But I like real estate better. Will it depreciate? Yes I think so based on location but people need a roof over there a lot more than gold jewelry during deflation in the bust phase.
Both are going to be long-term buy and hold's in any event but for this audience, I wager a few could buy condo's and rent them out for income and do better than holding gold. Boomers are downsizing and heading south where it is warm and a tad cheaper.
You need the gold so you can swap it for parts for your tractor. You could swap wheat but then you might get hungry, plus for that much wheat it might go mouldy before the tractor-parts-salesman gets hungry. You might be better off stocking up on extra tractor parts instead of gold but I'm not sure. No doubt there are some people out there that study such things in greater detail.
The trouble with having all gold and nothing else is that you may be tempted to swap it all for one last loaf of bread.
swap it all for one last loaf of bread...
Agreed. Investing heavily in just, predictable and timely application of the rule of law is far more valuable than the devices used by society to affect trade. When combined with honest, open and easily accessible factual public recordations of transactions, especially of those holding offices of public trust, including any and all persons / organizations receiving payments from public treasuries, we just might have a fighting chance against these vermin.
To the point of one last loaf, I remember tales of gold coins sewn into coats being used to bribe border and boxcar guards.
jmo.
I plan on buying lots of gold-plated tungsten and a massive security network / fortress. That way when TPTB finally break into my compound, murder me and steal my stuff, they'll suddenly realize that they spent more money on stealing my stuff than what they got back. That'll get 'em.
It is about time old boys.
Complacency…I do not thing this word means what the Author thinks it mean. Isn’t investor complacency at an all-time high not an all-time low?
Sure it’s just a typo but we have to be better than the puppets spouting BS on yahoo finance.
No it's not a typo. It's the new normal. No one knows nuthin anymore. everybody's in a big hurry. They don't have time to proof-read and think about what they wrote. A "typo" refers to an essentially mechanical failure; pushing the wrong key on a "typewritter". I believe it's completely possible that he can't understand that low complaciency does not mean what he assumed it meant, (for 50 milliseconds, while he was speed typing). It's very, very difficult for people who never studied plane geometry to think logically.
The front line economy is China and they have been buying gold for a while.
Names ?
sec.edgar-online.com Do your own homework they are ALL there, plug in a company and the list all the way down the board shows up. How could you not know this?
Why is it assumed that insider sellers are going to cash? Why is it not likely that are engaging in prudent portfolio diversification? Just because they aren't going all to gold?
The market as a whole is down, so the funds are not going to equities market GLOBALLY. Cash or cash equivalents, short term Gov. or corporate bonds. If you watch interests rates across the maturities you see funds going to the short end.
Why is it assumed that insider sellers are going to cash? Why is it not likely that are engaging in prudent portfolio diversification? Just because they aren't going all to gold?
Where is the evidence that they are dumping stocks more than usual?
You do know that SEC rules state corporate holders have PUBLIC percentages right. You can go to any profile of any public company and see the % shares owned. You really need to do some homework before you make statements.
http://sec.edgar-online.com/litton-industries-inc/def-14a-proxy-statemen...
Insiders are always dumping stocks, especially when prices are high. They get stock options as part of their compensation, and they play games to push up the stock price so they can cash out. It is really hard to tell if there is anything unusual in their behavior, because they are always selling stock in bull markets.
No, it's up to the writer of the article to provide proof (or at least decent links to it) of his assertions, not expect his readers to do the legwork.
Fuq Stawks. Hold PMs.
60% physical gold in hand with the remaining 40% in gold shares, silver (in hand) and cash. It works for me and though I may loose sleep some nights, it is never over money.
Sure. Me too. But when we run out of cash and have to sell some of those PMs for less than we paid for them, it's still a bit gutting.
Sheeples in Murika are investing in IPADS,APAPS and IPHONES-Shows shallow thinking coupled with inbreeding. Go hand in hand
Not all of us, I'm waiting for my latest investment to get back from the gunsmith.
Airborne. Ebola has gone airborne. Airborne. Say it. Airborne.
1200 meters
"5) Investor complacency is at a record LOW."
that doesn't mean what he thinks it does.
"risk aversion" might have been a better choice.
that -- or "HICH".
They're selling the farm? But I thought the smart money was moving into 'hard' assets?
*confused*