UN Insiders are selling stock like it's 2007 - Bogdanoff brothers: " we couldn't possibly comment"

Source with video.

New York (CNN Business) The leaders of Corporate America are cashing in their chips as doubts grow about the sustainability of the longest bull market in American history.

Corporate insiders have sold an average of $600 million of stock per day in August, according to TrimTabs Investment Research, which tracks stock market liquidity.

August is on track to be the fifth month of the year in which insider selling tops $10 billion. The only other times that has happened was 2006 and 2007, the period before the last bear market in stocks, TrimTabs said.

Investors often view insider buying and selling — transactions performed by top executives, leading shareholders and directors — as a signal of confidence. Even though the stock market is much larger than it was in 2007, so the $10 billion mark may not mean as much now as it did then, the acceleration of insiders heading for the exits could indicate concern about the challenges ahead, especially as the US-China trade war threatens to set off a recession.

"It signals a lack of confidence," said Winston Chua, an analyst at TrimTabs. "When insiders sell, it's a sign they believe valuations are high and it's a good time to be outside the market."

Recession fears have ignited a burst of market volatility over the past year, punctuated by the worst December since the Great Depression. Although the S&P 500 remains up 14% in 2019, markets have tumbled in August as the trade war escalated. The Dow dropped 623 points, or 2.4%, on Friday. It regained about a third of those losses Monday.

Related article: Stock buybacks exploded after the tax cuts. Now they're slowing down

Heavy insider selling is often considered an ominous signal about a given company because execs presumably have a better idea about where the stock is going than the average investor. The thinking is that if they thought the stock was going straight up, they wouldn't leave cash on the table by selling.

But Nicholas Colas, co-founder of DataTrek Research, noted insider selling is not always a helpful indicator at a high level. Rather than reflecting a lack of confidence, he said, the selling may simply be the result of insiders bracing for leaner compensation.

"Most managers get paid on earnings growth. If they anticipate bonuses will be slower, they will sell stock to make up the gap," Colas said. "It's one more sign that managements know this will be a tough year for growing earnings."

Other executives may sell stock to diversify their holdings or to raise money to pay taxes. To avoid tripping insider trading rules or spooking shareholders, some executives schedule periodic stock sales.

Still, the TrimTabs report makes it clear that insiders are selling more than they have at any other point during the bull market, which began in March 2009.

Last week alone, top executives from Salesforce (CRM), Slack (WORK), Chipotle (CMG), Visa (V) and Home Depot (HD) all sold shares, according to OpenInsider, a site that tracks insider stock sales.

Buybacks, another sign of confidence, have also slowed, albeit from extremely elevated levels.

US companies announced $2 billion of buybacks per day during earnings season, according to TrimTabs. That's the weakest pace in two years.

Completed buybacks by S&P 500 companies declined 13% during the second quarter to $165.7 billion, according to S&P Dow Jones Indices. However, buybacks remain above the pace of 2017, the final year before the Republican tax law that created a huge windfall for companies.

 

[ES 195]

I hope there's another massive market crash again. It's the only time the Canadian dollar was higher than the USD (reached around 1.20).
So if it does crash again, anyone not using pounds should invest in USD while it's cheap.

 

[Syaoran Li]

Are the neoliberals trying to invoke a recession to keep Trump from winning 2020? Because it sure as hell feels like it.

For all I know, the economy may be headed for a legit downturn (especially with things like student debt and a second tech bubble) but it's hard to tell where legit concern ends and fear-mongering begins.

I wouldn't put it past neoliberal corporatists to take a small downturn and spin it into triggering an actual recession by getting the investors and shareholders to lose faith in the economy and panic en masse. Especially when you consider the infamous Bill Maher rant that actually got applause by the people on his panel and similar rhetoric online and in the MSM

But we are in the midst of a student debt crisis and a second dot com bubble which is primed to burst if the SJW clickbait mills are anything to go by, so who the fuck knows anymore?

 

[pwnest injun]

It would be insanely good if Trump passed a massive infrastructure spending bill that flooded the country with cash straight from the fed right after these chomos liquidate their stock assets. We could do with a fat round of currency inflation before the big shots start swallowing up real assets.

 

[Smaug's Smokey Hole]

Heavy insider selling is often considered an ominous signal about a given company because execs presumably have a better idea about where the stock is going than the average investor. The thinking is that if they thought the stock was going straight up, they wouldn't leave cash on the table by selling.

But Nicholas Colas, co-founder of DataTrek Research, noted insider selling is not always a helpful indicator at a high level. Rather than reflecting a lack of confidence, he said, the selling may simply be the result of insiders bracing for leaner compensation.

"Most managers get paid on earnings growth. If they anticipate bonuses will be slower, they will sell stock to make up the gap," Colas said. "It's one more sign that managements know this will be a tough year for growing earnings."

I don't know anything about the stock market but there was a move, and it was successful, to bring the euro below the US dollar at one point. I don't remember wtf was going on but I think there was more than forex trading that made it happen, even if it was for a brief period of time.

 

[Jeb-sama]

Everyone is expecting a crash, which means it won't happen.

Bogdanoffs are just going to cause a slight dip to entice everyone to offload their assets into their hands, and then they're gonna pump it to the fucking stars

 

[Thomas Veil]

So what’s going to cause it? It’s going to be tough to pull off unless they throw Big Tech under the bus.

Well, I mean, we did just see a massive leak...

 

[Secret Asshole]

What do they think will cause a recession?

Silicon Valley is the answer but there’s a lot of people at the top who need it to keep humming along. Housing markets aren’t anything near 2006 or 2007 bad. Consumer debt is high but maxing out a $10k credit card is way different than defaulting on a $600k mortgage.

So what’s going to cause it? It’s going to be tough to pull off unless they throw Big Tech under the bus.

Trade war fears.

Also in general, the stock market is gambling. Essentially they believe we've been on a winning streak for far too long and something bad has to eventually happen. So they're betting that something bad is going to happen soon because the bull market has lasted too long. .

 

[pwnest injun]

So what’s going to cause it? It’s going to be tough to pull off unless they throw Big Tech under the bus.

European nations becoming insolvent, one after the other. England leaving the Eurozone is going to shrink their total economy by about 30%.

 

[Libtard-Wrecking Krogoth]

we're in the longest running bull market since 1929. we've been overdue for a correction for well over two years now. this isn't exactly news.

 

[Antipathy]

I just wonder whether or not the crash will happen before 2020. If it does, Trump's out, and if it doesn't, then...
well, to be honest, I have no idea.

I just want it all to end.

 

[Libtard-Wrecking Krogoth]

I just wonder whether or not the crash will happen before 2020. If it does, Trump's out, and if it doesn't, then...
well, to be honest, I have no idea.

I just want it all to end.

the biggest variable imo will be all the data-heavy autotrading that's come into use by all the movers since the previous crash. the last correction should have, in my estimation, been triggered by the flash crash in aug 2015 or shortly thereafter. but even then the SPX didn't drop below the 200-day moving avg for any appreciable amount of time, and it still hasn't done so, only recently in dec 2018 getting in that territory. we're floating on air and i don't think anyone has a cogent explanation for what's keeping prices rising. we're still in overheated territory compared to the 200-day (just as a baseline trend indicator), but it'll be interesting to see what finally gives way (if anything), considering now that the yield curve's inverted, how long it'll take for that to play out in the market, or if voodoo magic keeps the gears oiled.

also don't wish for crashes unless you have money on puts somewhere, it's rude.

 

[nagant 1895]

I bought silver a few months ago when it was something like 12 an ounce. If this continues I'mma make a killing.

 

[UQ 770]

I guess this is my shitty forced meme now.

I'm still surprised that people think a President that's only been in office for a few years can affect the economy so drastically one way or the other. The timeframes it takes for poor economic policies to show results are glacial. Its possible his trade war with China might be doing more harm than good, but even if it is it'll just be the cherry on top of our rotten to the core economic system. There is some serious Enron shit going on right now with bad loan practices. There's also TechBubble 2.0 convincing people that Big Data is actually valuable to anyone other than the surveilance industry. Corporate debt is also quite high which is fine normally but if anything disasterous happens companies can start collapsing left and right.

This one is my own theory backed up by minimal data, but I also suspect that the student loan market is going to implode at some point. Right now it appears to be kept salient by stiff government regulations that make it difficult for a jobless hipster to default but if anything changes it could lead to a run.

Marketing and Market Research as a field is also so disgusting and bloated that I can't comprehend how it still exists. In this age, the average intern fresh out of high school can do a marketing job in their sleep since the next generation is so enslaved by social media. Corporate entities are literally just throwing money away in this field, the costs for market research studies and materials are ENORMOUS and the results of them are usually so mundane and pedestrian that anyone on the street could have told you that in passing.

 

[BONE_Buddy]

TBH this is just fearmongering using global economic trends to say that the USA is heading to the shitter.

The big indicator that people are worried about is "inverse bond yields." To make a complex matter radically over simplified, Europe and Asia have moved generally to Negative Interest Rate Policies in an effort to stimulate their economies. In effect trying to force their people to spend/move their savings.

Well, many of those people/banks have dropped their native bonds and moved over to the positive yielding American bonds. This cause a longer term increase in American Bond prices.

Bonds have traditionally been a low-risk low reward option, so in normal circumstances it is a sign of the market saying that the particular country's stock market is too risky.

What is happening now is European and Asian markets have said that their stocks are too risky, and their countries have said "well, if you keep your money in the bank we will effectively tax it just for being there."

America has said that it is fundamentally stupid and shortsighted to have NIRP in place.

Therefore, those markets have bought heavily into American Bonds. This is not an indicator of American market strength per se, but of global market trends.

__________

TLDR, The American Market is and will probably do fine... at least in comparison. As the European and Asian markets are pulling out the last stimulus trick(s) in the book.

I recommend looking at this twitter account for the past week or two to get a better primer on how this shit is working:

Trinh Nguyen (@Trinhnomics) | Twitter

The latest Tweets from Trinh Nguyen (@Trinhnomics). Senior economist for emerging Asia @natixis; Nonresident scholar for the Asia Program @carnegieEndow; Views are all mine and you are free to use/like/rt. Hong Kong

twitter.com

 

[Sped Xing]

A huge crash in about nineteen months would really help me out. I'll be ready to make big purchases by then.

 

[nonvir_1984]

These parasites off loading stock into cash is a good sign they think the show is about to get a whole lot more interesting. Whether it will is anyone's guess. The Orangeman may commence spending on infrastructure and that would hold things off for a time. But there are not so many variables that its really difficult to make a firm assessment. But it will be ugly when it comes and will be every accelerationists dream.

 

[Manwithn0n0men]

European nations becoming insolvent, one after the other. England leaving the Eurozone is going to shrink their total economy by about 30%.

China sending troops into HK

 

[Maratus volans]

China clamping down on HK will be met with about the same global response as Russia occupying the Crimea did: a sternly worded letter and a request to please be nice.

The U.S. might be particularly stern in its wording, but the rest of the world will stay silent out of a desire to try to kiss China's ass. The Chinese market is too big and too potentially valuable for most countries to want to rustle Chinese government jimmies.

 

[RandallB]

So CNN is saying "(((Rich people))) who know things are selling all their stock! It's gonna be a run on the banks! SELL SELL SELL!!!!!"

Now, let's say theoretically board members of CNN buy some stock after the value drops a little. Could they be charged with stock market manipulation? Or is that just for people nobody ever heard of making a couple bucks after giving out stock tips online?

Because fucking obviously this is an attempt to cause a panicked sell off, and trigger a recession. Fuck you CNN