Insiders cashing out in record numbers...

Been busy lately so forgive me if this has already been covered.

It seems that industry insiders (people who work at the top levels of publicly traded companies) have been cashing out and selling their shares at record numbers. The story is originally from the Associated Press and I have not seen it reported elsewhere except for FTW where I found it.

Insider selling is not the same as insider trading. Insider selling is legal and closely regulated with reporting requirements.

Disclosure of insider selling is required by law and executives who sell stock in their own companies are required to report it for the benefit of shareholders and other investors. It is these required reports which prompted this AP wire story � FTW�

AP- � insider-trading trackers at Thomson Financial say the recent selling bonanza is "particularly noteworthy."

Some $6.6 billion in insider stock sales took place last month, the highest level since the $7.7 billion in sales tallied in August 2000, [the dot.com and biotech meltdowns] according to Thomson. Contrast that with the $144 million worth of stock that was bought by insiders last month.

The most selling came from in the financial sector, where executives sold $882 million of their own stock in November, and health care companies, whose insiders sold $734 million worth of shares. Selling in both sectors was double the five-year monthly average, according to Thomson. - Source


[emphasis mine]

So the entire financial sector is cashing out big time.

Add this latest �bad sign� to the high price of gold, high price of oil, low dollar, record debts/deficits and rising interest rates (inflation anyone?) and the economic future does not look good.

All this comes at a time when the current US administration is trying to sell the American people on the privatization of Social Security. If they succeed it will be a major cash infusion into the stock market helping keep it afloat a little while longer � say 4 years � perhaps until a democrat takes over to be blamed for the inevitable crash?

See this pre-election post from the elections forum on the Social Security issue: TAXES: The Fate of Social Security. There are many other threads around ATS as well.

The "insiders" are not betting on the market with their own money so they want yours.

The crash is underway... but moving in a sort of "slow motion"... for now...

link edit

[edit on 12/21/2004 by Gools]

Wow that is scary, especially the companies publically saying "invest in us" and their own managers are selling as fast as possible....

A really good read, ...

Here's a useful link if you're interested in the numbers.

insider.thomsonfn.com...

Hey anything to profit from but your without losing your own.

I think they see the change in our economy and their foresee a negative outcome.

I guess some dark times are looming ahead.

So I better start stuffing euro bills under my pillow.

If I were in the market it would worry me more.

Part of it could be this:

The Financial Accounting Standards Board proposed in March that options expensing will become mandatory starting next year.

link
Note: they are delaying it 6 MORE months.

When stock options get expensed the real net earnings will be exposed as being much less or even become losses for some companies.

Ichoro, I can't get your link to work.
.

I'll try it again

link

Originally posted by Netchicken
... especially the companies publically saying "invest in us" and their own managers are selling as fast as possible....

Classic "Pump and Dump" mentality.

Nothing like talking up the stock and then selling it for a bigger profit at the expense of your own employees!

Thanks for the links Slank and Ichoro.

I'm one of those people who wonder how in the heck you are supposed to value something that is just an "option" and does not yet exist.

The $12.5 billion number (at ThampsonFN) from November sticks out like a sore thumb but the sell/buy ratio is higher in February (maybe due to very low buying?) no raw numbers given fo that month though.

I also found it interesting that if you go to the home page of Thomson (bottom of Ichoro's linked page) they say that the ThomsonFN site is no longer active as of Feb-04. So where does this page come from?

.

But hey, we can just trash social secutiry and privatize it right? No worries!