Do Wall Street Insiders Expect Something Really BIG To Happen Very Soon?

							Do Wall Street Insiders Expect Something
Really BIG To Happen Very Soon?
Michael Snyder
Economic Collapse
Feb 7, 2013




Why are corporate insiders dumping huge numbers of shares in their own companies right now? Why
are some very large investors suddenly making gigantic bets that the stock market will crash at some
point in the next 60 days? Do Wall Street insiders expect something really BIG to happen very soon?
Do they know something that we do not know? What you are about to read below is startling. Every
time that the market has fallen in recent years, insiders have been able to get out ahead of time. David
Coleman of the Vickers Weekly Insider report recently notedthat Wall Street insiders have shown “a
remarkable ability of late to identify both market peaks and troughs”. That is why it is so alarming that
corporate insiders are selling nine times as many shares as they are buying right now. In addition, some
extraordinarily large bets have just been made that will only pay off if the financial markets in the U.S.
crash by the end of April. So what does all of this mean? Well, it could mean absolutely nothing or it
could mean that there are people out there that actually have insider knowledge that a market crash is
coming. Evaluate the evidence below and decide for yourself…
For some reason, corporate insiders have chosen this moment to unload huge amounts of stock.
According to a CNN article, corporate insiders are now selling nine times more of their own shares
than they are buying…
      Corporate insiders have one word for investors: sell.

      Insiders were nine times more likely to sell shares of their companies than buy new ones
      last week, according to the Vickers Weekly Insider report by Argus Research.

What makes this so alarming is that corporate insiders have been exceedingly good at “timing the
market” in recent years. The following comes from a recent CNBC article entitled “Sucker Alert?
Insider Selling Surges After Dow 14,000“…
“In almost perfect coordination with an equity market that was rushing toward new all-time
highs, insider sentiment has weakened sharply —
falling to its lowest level since late March 2012,”
wrote David Coleman of the Vickers Weekly Insider
report, one of the longest researchers of executive
buying and selling on Wall Street. “Insiders are
waving the cautionary flag in an increasingly
aggressive manner.”

There have been more than nine insider sales for
every one buy over the past week among NYSE
stocks, according to Vickers. The last time executives
sold their company’s stock this aggressively was in
early 2012, just before the S&P 500 went on to correct
by 10 percent to its low for the year.

“Insiders know more than the vast majority of market
participants,” said Enis Taner, global macro editor for
RiskReversal.com. “And they’re usually right over a
long period of time.”

There are other indications that the stock market may
be headed for a significant tumble in the months
ahead. For example, as a Zero Hedge article recently
pointed out, the last time that the financial markets in
the U.S. were as “euphoric” as they are now was right
before the financial crisis of 2008.
And as I mentioned above, some people out there
have recently made some absolutely jaw-dropping
bets against stocks which will only pay off if there is a
financial crash at some point in the next few months.
According to Business Insider, the recent purchase of
100,000 put options by a mystery investor has a lot of people on Wall Street talking…
According to Barron’s columnist Steven Sears,someone made a big bet against the financialsETF
yesterday (ticker symbol XLF), and it has everybody buzzing.

The trader bought 100,000 put options on the ETF (a put option increases in value when the price
of the underlying asset, in this case, the ETF, goes down).

To put that number in perspective, Sears writes, “Few investors ever trade more than 500
contracts, so a 100,000 order tends to stop traffic and prompt all sorts of speculation about what’s
motivating the trade.” According to Sears, the trade “has sparked conversations across the
market.”

Reportedly, those put options expire in April.
And as Art Cashin of UBS has noted, there was also another extremely large bet that was placed
recently that is banking on a financial crash within the next two months…
                                                       A Very Big Bet In A Somewhat Unlikely
                                                       Instrument – My friend, Jim Brown, the
                                                       ever-alert consummate professional over at
                                                       Option Investor pointed us to a rather
                                                       unusual trade. Here’s what he wrote in last
                                                       night’s edition of his valuable newsletter:

                                                       In past years I have reported on trades that
                                                       were so large it appeared someone had
                                                       inside knowledge of a pending event.
                                                       Sometimes those were massive put
                                                       positions on the S&P. A new trade just
                                                       appeared that suggests there will be a
                                                       market event in the near future. Last week
                                                       somebody put on a call spread on the VIX
                                                       using the April 20 and 25 puts. They
                                                       bought 150,000 contracts for a net of $75
                                                       per contract. That is an $11,250,000 bet
                                                       that the VIX will move over 20 over the
                                                       next 60 days. You would have to be VERY
                                                       confident in your outlook to risk $11
                                                       million on a directional position with the
                                                       VIX at five year lows and the markets
                                                       trying to break out to new highs.

                                                       So does all of this guarantee that the stock
                                                       market is going to move a certain way?
                                                       Of course not.
                                                         But when you step back and look at the bigger
picture, it does appear that Wall Street insiders are preparing for something.
Meanwhile, the government continues to assure us that happy days are here again for the U.S. economy
and that we don’t have anything to worry about.
The Congressional Budget Office has just released a report that contains their outlook for the next
decade. The report is entitled “The Budget and Economic Outlook: Fiscal Years 2013 to 2023″, and if
you want a good laugh you should read it.
Here are some of the things that the CBO believes will happen…
-The CBO believes that government revenues will more than double by 2023.
-The CBO believes that government revenue as a percentage of GDP will rise from 15.8 percent today
to 19.1 percent in 2023.
-The CBO believes that the unemployment rate will continually fall over the next decade.
-The CBO believes that the federal budget deficit will fall to just 2.4% of GDP in fiscal year 2015.
-The CBO believes that the federal budget deficit will only be $430 billion in 2015.
-The CBO believes that we will not have a single recession over the next decade.
-The CBO believes that inflation will stay at about 2 percent for the next decade.
-The CBO believes that U.S. GDP will grow by a total of 67 percent by 2023.
Wow, all of that sounds great until you go back and take a look at how CBO projections have fared in
the past.
In fact, Bruce Krasting has gone back and looked at the numbers from the Congressional Budget
Office’s Budget and Economic Outlook 2003. I think that you will find the differences between the
CBO projections and what really happened to be very humorous…
Estimated 10-year budget surplus = $5.6T.
Reality = $6.6T deficit. A 200+% miss.


Estimate for 2012 Debt Held by Public = $1.2T (5% of GDP).
Reality = Debt Held by Public = $11.6T. A 1000% miss.


Estimated fiscal 2012 GDP = $17.4T.
Reality = $15.8T. A $1.6T (10%) miss.
So should we trust what the CBO is telling us now?
Of course not.
Instead, perhaps we should listen to some of the men that successfully warned us about the last
financial crisis…
-”Dr. Doom” Marc Faber recently stated that he “loves the high odds of a ‘big-time’ market crash“.
-Economist Nouriel Roubini says that we should “prepare for a perfect storm“.
-Pimco’s Bill Gross says that we are heading for a “credit supernova“.
-Nomura’s Bob Janjuah believes that the financial markets will experience one more huge spike before
collapsing by up to 50%…
I continue to believe that the S&P500 can trade up towards the 1575/1550 area, where we have,
so far, a grand double top. I would not be surprised to see the S&P trade marginally through the
2007 all-time nominal high (the real high was of course seen over a decade ago – so much for
equities as a long-term vehicle for wealth creation!). A weekly close at a new all-time high
would I think lead to the final parabolic spike up which creates the kind of positioning
extreme and leverage extreme needed to create the conditions for a 25% to 50% collapse in
equities over the rest of 2013 and 2014, driven by real economy reality hitting home, and by
policymaker failure/loss of faith in “their system”.

The truth is that no matter how much money printing the Federal Reserve does, it is only a matter of
time before the financial markets catch up with economic reality.
The U.S. economy has been in decline for a very long time, and things just continue to get even worse.
Here are just a few numbers…
-The percentage of the civilian labor force that is employed has fallen every single year since 2006.
-According to John Williams of shadowstats.com, truly accurate numbers would show that U.S. GDP
growth has actually been continuously negative all the way back to 2005.
-U.S. families that have a head of household that is under the age of 30 have a poverty rate of 37
percent.
-One recent survey found that nearly half of all Americans are living on the edge of financial ruin.
-According to the U.S. Census Bureau, there are more than 146 million Americans that are considered
to be either “poor” or “low income” at this point.
For many more statistics that demonstrate that the U.S. economy has continued to decline in recent
years, please see this article: “37 Statistics Which Show How Four Years Of Obama Have Wrecked The
U.S. Economy“.
So where is all of this headed?
Well, after the next major financial crisis in America things are going to get very tough.
We can get a hint for how things are going to be by taking a look at what is going on over in Europe
right now.
Can you imagine people trampling each other for food? That is what is happening in Greece. Just
check out this excerpt from a Reuters article…
Hundreds of people jostled for free vegetables handed out by farmers in a symbolic protest earlier
on Wednesday, trampling one man and prompting an outcry over the growing desperation created
by economic crisis. Images of people struggling to seize bags of tomatoes and leeks thrown from
a truck dominated television, triggering a bout of soul-searching over the new depths of poverty
in the debt-laden country. The suffering that the Greeks are experiencing right now will come to
this country soon enough. So enjoy this false bubble of debt-fueled prosperity while you can. It
is going to end way too soon, and after that there will be a whole lot of pain.



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