Think the economy is on it's way to recovery?

[NaughtyGeek]

Bloomburg Link

Sales by CEOs, directors and senior officers have accelerated to the highest level since June 2007, two months before credit markets froze, as the S&P 500 rebounded from its 12-year low in March. The increase is making investors more skittish because executives presumably have the best information about their companies? prospects.

?If insiders are selling into the rally, that shows they don?t expect their business to be able to support current stock- price levels,? said Joseph Keating, the chief investment officer of Raleigh, North Carolina-based RBC Bank, the unit of Royal Bank of Canada that oversees $33 billion in client assets. ?They?re taking advantage of this bounce and selling into it.?

Take it for what it is. Personally I see this as a warning to those going all in right now that caution may be prudent, but it could be they're trying to free capital for investment elsewhere. Who knows, tis a strange trend is all.

 

[Craig234]

Originally posted by: NaughtyGeek
Bloomburg Link

Sales by CEOs, directors and senior officers have accelerated to the highest level since June 2007, two months before credit markets froze, as the S&P 500 rebounded from its 12-year low in March.

Raises a question how they knew to sell 2 months before credit markets froze.

 

[Jaskalas]

Originally posted by: Craig234

Originally posted by: NaughtyGeek
Bloomburg Link

Sales by CEOs, directors and senior officers have accelerated to the highest level since June 2007, two months before credit markets froze, as the S&P 500 rebounded from its 12-year low in March.

Raises a question how they knew to sell 2 months before credit markets froze.

Re-read P&N back then and you'll see normal folks like us talking shit about the economy. Why? Cause people like them were telling the world shit had hit the fan. They saw the train wreck approaching and some of us were listening.

 

[JS80]

Q2 earnings are going to be a disaster and everyone is going to be lowering guidance. That is why there is zero insider buying. I predict S&P 500 in the 700s by end of July.

 

[Fern]

Originally posted by: Craig234

Originally posted by: NaughtyGeek
Bloomburg Link

Sales by CEOs, directors and senior officers have accelerated to the highest level since June 2007, two months before credit markets froze, as the S&P 500 rebounded from its 12-year low in March.

Raises a question how they knew to sell 2 months before credit markets froze.

Not really. They have pretty close relationships with their bankers, and they (CFO's etc) talk to each other. I've noticed that the banks always seem aware when a financial sh!t storm is approaching.

Banks have many in-house financial analyists working for them, so they usually have some idea of what's coming.

I noticed back in 2000 a few months before the dot.com stock market crash that banks scaled waaaay back on what they would loan against stocks used as collateral. In retrospect I realized that they seemed to know trouble was ahead. I was shopping a guy with $20 million in securities and no bank would loan more than $2 mil against the securities. Under normal circumstances it would have $10 mil. At the time I couldn't figure out what the problem was, then 4 months later the market crashed and I figured they knew what was coming.

I imagine that the banks tightened up on credit for the companies/businesses and the CFO's are gonna be the first to notice. And CFO's communicate with each other, they'll notice the broad trend and figure something's up (if they're not outright told by their bankers, when you have a long relationship with a bank you tend to think you deserve an explanation of why their tightening up on you all of a sudden).

Fern

 

[Craig234]

Originally posted by: Jaskalas

Originally posted by: Craig234

Originally posted by: NaughtyGeek
Bloomburg Link

Sales by CEOs, directors and senior officers have accelerated to the highest level since June 2007, two months before credit markets froze, as the S&P 500 rebounded from its 12-year low in March.

Raises a question how they knew to sell 2 months before credit markets froze.

Re-read P&N back then and you'll see normal folks like us talking shit about the economy. Why? Cause people like them were telling the world shit had hit the fan. They saw the train wreck approaching and some of us were listening.

My recollection is one thread of someone predicting doom and getting pretty roundly mocked, and the thread getting bumped later for some earned I told you so.

I don't recall much of any real discussion beyond the usual 'some say this some say that' chatter.

 

[Craig234]

Originally posted by: Fern

Originally posted by: Craig234

Originally posted by: NaughtyGeek
Bloomburg Link

Sales by CEOs, directors and senior officers have accelerated to the highest level since June 2007, two months before credit markets froze, as the S&P 500 rebounded from its 12-year low in March.

Raises a question how they knew to sell 2 months before credit markets froze.

Not really. They have pretty close relationships with their bankers, and they (CFO's etc) talk to each other. I've noticed that the banks always seem aware when a financial sh!t storm is approaching.

Banks have many in-house financial analyists working for them, so they usually have some idea of what's coming.

I noticed back in 2000 a few months before the dot.com stock market crash that banks scaled waaaay back on what they would loan against stocks used as collateral. In retrospect I realized that they seemed to know trouble was ahead. I was shopping a guy with $20 million in securities and no bank would loan more than $2 mil against the securities. Under normal circumstances it would have $10 mil. At the time I couldn't figure out what the problem was, then 4 months later the market crashed and I figured they knew what was coming.

I imagine that the banks tightened up on credit for the companies/businesses and the CFO's are gonna be the first to notice. And CFO's communicate with each other, they'll notice the broad trend and figure something's up (if they're not outright told by their bankers, when you have a long relationship with a bank you tend to think you deserve an explanation of why their tightening up on you all of a sudden).

Fern

In theory, the public is supposed to have access to the same sort of info from the financial media, who can interpret it for them. Perhaps it's a commentary on that media...

 

[Vic]

Think of it like a rollercoaster ride... we're just now cresting the 2nd hill.

 

[Phokus]

Originally posted by: Craig234

Originally posted by: Jaskalas

Originally posted by: Craig234

Originally posted by: NaughtyGeek
Bloomburg Link

Sales by CEOs, directors and senior officers have accelerated to the highest level since June 2007, two months before credit markets froze, as the S&P 500 rebounded from its 12-year low in March.

Raises a question how they knew to sell 2 months before credit markets froze.

Re-read P&N back then and you'll see normal folks like us talking shit about the economy. Why? Cause people like them were telling the world shit had hit the fan. They saw the train wreck approaching and some of us were listening.

My recollection is one thread of someone predicting doom and getting pretty roundly mocked, and the thread getting bumped later for some earned I told you so.

I don't recall much of any real discussion beyond the usual 'some say this some say that' chatter.

Boy it sure would be neat to find that thread and see who has that crystal ball

 

[Fear No Evil]

The Messiah tells me everything will be OK. I believe him. Oprah can't be wrong after all.

 

[PokerGuy]

Originally posted by: Fear No Evil
The Messiah tells me everything will be OK. I believe him. Oprah can't be wrong after all.

:laugh:

When insiders sell in big numbers into a rally, it's time to really bail out and sell short.

 

[StageLeft]

I am being cautious. I am majority stocks, but not a huge majority.

Buffet a couple days ago said that he gets reports, often daily, on about 70 or so companies and sees nothing to indicate a recovery yet and that the economy is still in a shambles.

Think of it like a rollercoaster ride... we're just now cresting the 2nd hill.

Within several days you called the previous bump in the markets (last year you said within 100 days things would turn). Are you saying things are going to sour again?

I found it interesting that although GDP wasn't QUITE as bad yesterday as initially thought, there was another big jump in unemployment to 627k or something and yet what does the market do it flies up.

 

[soccerballtux]

Originally posted by: Fern

Originally posted by: Craig234

Originally posted by: NaughtyGeek
Bloomburg Link

Sales by CEOs, directors and senior officers have accelerated to the highest level since June 2007, two months before credit markets froze, as the S&P 500 rebounded from its 12-year low in March.

Raises a question how they knew to sell 2 months before credit markets froze.

Not really. They have pretty close relationships with their bankers, and they (CFO's etc) talk to each other. I've noticed that the banks always seem aware when a financial sh!t storm is approaching.

Banks have many in-house financial analyists working for them, so they usually have some idea of what's coming.

I noticed back in 2000 a few months before the dot.com stock market crash that banks scaled waaaay back on what they would loan against stocks used as collateral. In retrospect I realized that they seemed to know trouble was ahead. I was shopping a guy with $20 million in securities and no bank would loan more than $2 mil against the securities. Under normal circumstances it would have $10 mil. At the time I couldn't figure out what the problem was, then 4 months later the market crashed and I figured they knew what was coming.

I imagine that the banks tightened up on credit for the companies/businesses and the CFO's are gonna be the first to notice. And CFO's communicate with each other, they'll notice the broad trend and figure something's up (if they're not outright told by their bankers, when you have a long relationship with a bank you tend to think you deserve an explanation of why their tightening up on you all of a sudden).

Fern

Where can one go to find this sort of information? I have my hunches on why we're headed down for the next couple of years (Subprime part 2 aka Option ARMs) but need more data like this to confirm.

Related: Recommend that you guys take a look at doctorhousingbubble.com. He makes a strong case for housing prices not bottoming out until 2012.

 

[StageLeft]

Originally posted by: soccerballtux
Where can one go to find this sort of information? I have my hunches on why we're headed down for the next couple of years (Subprime part 2 aka Option ARMs) but need more data like this to confirm.

Related: Recommend that you guys take a look at doctorhousingbubble.com. He makes a strong case for housing prices not bottoming out until 2012.

Interest rates and inflation can have a huge impact on where housing goes. As people are continuing to lose their jobs, though, it still appears to me to be premature to think we're at or even near a housing bottom. Essentially, to buy a house you need either to be in a great situation (solid, reliable income + savings + high credit) or have the lender make loans easy to get. The latter situation is obviously not going to happen soon and with savings rates continuing to climb and people losing jobs, the appetite for spending a lot on a house isn't there. And foreclosures are still cranking along at a wonderful clip.

In regard to the information you're looking for, there's so much conflicting that it's very difficult to choose a consistently accurate source. In fact, probably impossible.

EDIT: Doctorhousing bubble is interesting, some good posts with data and articles and none of the sky-falling insanity of a guy like karl denninger.