Despite the 6.5% stock market rally over the last three months, a handful of billionaires are quietly dumping their American stocks . . . and fast.
Warren Buffett, who has been a cheerleader for U.S. stocks for quite some time, is dumping shares at an alarming rate. He recently complained of “disappointing performance” in dyed-in-the-wool American companies like Johnson & Johnson, Procter & Gamble, and Kraft Foods.
In the latest filing for Buffett’s holding company Berkshire Hathaway, Buffett has been drastically reducing his exposure to stocks that depend on consumer purchasing habits. Berkshire sold roughly 19 million shares of Johnson & Johnson, and reduced his overall stake in “consumer product stocks” by 21%. Berkshire Hathaway also sold its entire stake in California-based computer parts supplier Intel.
With 70% of the U.S. economy dependent on consumer spending, Buffett’s apparent lack of faith in these companies’ future prospects is worrisome.
Unfortunately Buffett isn’t alone.
Fellow billionaire John Paulson, who made a fortune betting on the subprime mortgage meltdown, is clearing out of U.S. stocks too. During the second quarter of the year, Paulson’s hedge fund, Paulson & Co., dumped 14 million shares of JPMorgan Chase. The fund also dumped its entire position in discount retailer Family Dollar and consumer-goods maker Sara Lee.
Finally, billionaire George Soros recently sold nearly all of his bank stocks, including shares of JPMorgan Chase, Citigroup, and Goldman Sachs. Between the three banks, Soros sold more than a million shares.
So why are these billionaires dumping their shares of U.S. companies?
After all, the stock market is still in the midst of its historic rally. Real estate prices have finally leveled off, and for the first time in five years are actually rising in many locations. And the unemployment rate seems to have stabilized.
It’s very likely that these professional investors are aware of specific research that points toward a massive market correction, as much as 90%.
One such person publishing this research is Robert Wiedemer, an esteemed economist and author of the New York Times best-selling book Aftershock.
Before you dismiss the possibility of a 90% drop in the stock market as unrealistic, consider Wiedemer’s credentials.
In 2006, Wiedemer and a team of economists accurately predicted the collapse of the U.S. housing market, equity markets, and consumer spending that almost sank the United States. They published their research in the book America’s Bubble Economy.
The book quickly grabbed headlines for its accuracy in predicting what many thought would never happen, and quickly established Wiedemer as a trusted voice.
A columnist at Dow Jones said the book was “one of those rare finds that not only predicted the subprime credit meltdown well in advance, it offered Main Street investors a winning strategy that helped avoid the forty percent losses that followed . . .”
The chief investment strategist at Standard & Poor’s said that Wiedemer’s track record “demands our attention.”
And finally, the former CFO of Goldman Sachs said Wiedemer’s “prescience in (his) first book lends credence to the new warnings. This book deserves our attention.”
In the interview for his latest blockbuster Aftershock, Wiedemer says the 90% drop in the stock market is “a worst-case scenario,” and the host quickly challenged this claim.
Wiedemer calmly laid out a clear explanation of why a large drop of some sort is a virtual certainty.
It starts with the reckless strategy of the Federal Reserve to print a massive amount of money out of thin air in an attempt to stimulate the economy.
And this is where Wiedemer explains why Buffett, Paulson, and Soros could be dumping U.S. stocks:
“Companies will be spending more money on borrowing costs than business expansion costs. That means lower profit margins, lower dividends, and less hiring. Plus, more layoffs.”
No investors, let alone billionaires, will want to own stocks with falling profit margins and shrinking dividends. So if that’s why Buffett, Paulson, and Soros are dumping stocks, they have decided to cash out early and leave Main Street investors holding the bag.
But Main Street investors don’t have to see their investment and retirement accounts decimated for the second time in five years.
Wiedemer’s video interview also contains a comprehensive blueprint for economic survival that’s really commanding global attention.
Now viewed over 40 million times, it was initially screened for a relatively small, private audience. But the overwhelming amount of feedback from viewers who felt the interview should be widely publicized came with consequences, as various online networks repeatedly shut it down and affiliates refused to house the content.
“People were sitting up and taking notice, and they begged us to make the interview public so they could easily share it,” said Newsmax Financial Publisher Aaron DeHoog.
“Our real concern,” DeHoog added, “is the effect even if only half of Wiedemer’s predictions come true.
“That’s a scary thought for sure. But we want the average American to be prepared, and that is why we will continue to push this video to as many outlets as we can. We want the word to spread.”
It's from Newsmax.com, you moron.
However, considering that I don't own any stocks, how can I possibly give a shit?
Stocks are for suckers. There's no difference between putting your money in the stock market, versus betting on red19 at the roulette table. No difference.
But kudos to the 1% who always know when to bet against America!
[quote]But kudos to the 1% who always know when to bet against America!
Patriotism is for Pussies!
1% ers, why do you hate America?
Mitt Romney and Republicans, why do you hate America?
Seriously, I'm stunned people still vote for the modern-day GOP. They are the most anti-American political party that ever existed.
OP, why do YOU hate america?
Right wing shill....
I don't think you have to be an economist to know why.
"It starts with the reckless strategy of the Federal Reserve to print a massive amount of money out of thin air in an attempt to stimulate the economy."
“Companies will be spending more money on borrowing costs than business expansion costs."
These two statements are inherently contradictory, because the Fed printing money means that companies (and private individuals) will be spending less, not more, in borrowing costs (i.e. interest).
So unless the quotes are a really bad cut-and-paste job, this "guru" knows less about economics than a community college dropout does.
Oh, and it's from Newsmax, so that's par for the course.
Warren Buffett isn't a market timer.
Ouch! The stupid! It hurts!
Gee, this reminds me of the endless "The Sky is Falling, Buy GOLD!" threads from a year or so ago.
How did that work out for all you doom and gloom types? Didn't I read where it's down to under $1500 an ounce?
Closer to $1400. Dropped $200 or $300 bucks yesterday. Nothing's a sure thing..
[quote]He recently complained of âdisappointing performanceâ in dyed-in-the-wool American companies like Johnson & Johnson, Procter & Gamble, and Kraft Foods.
For a man who lacks confidence in dyed in the wool American Companies, it strikes me as odd that he just bought Heinz last month (the entire company).
In fact, he's been rather open about the fact that he's selling stock to pay for Heinz. Kraft he's been selling since they bought Cadbury, since he thought that was a dumb move. That was 3 or 4 years ago.
I'm no Buffet cheerleader, but he generally takes great pains to explain what he's doing and why.
r13 that's what I was thinking. The person who bumped this thread has to be the same asshole who loves gold, which just dropped in value by a lot.
[quote]For a man who lacks confidence in dyed in the wool American Companies, it strikes me as odd that he just bought Heinz last month (the entire company).
Probably because at some point ketchup will be all Americans can afford to eat.
It is a vegetable, R17.
That "article" has been posted for well over a year.
It just drives traffic to Newsmax, you ninny.
I read an article a couple of months ago in a legit business news source (more legitimate than Newsmax anyway--might have been Bloomberg or Yahoo Business) that deep pockets investors were switching to commodities and leaving Wall Street to the middle-class suckers with mutual funds.
[quote] He recently complained of “disappointing performance” in dyed-in-the-wool American companies like Johnson & Johnson
Buffett was wrong about JNJ. He sold at $69-and-change, the lowest point in the past six-months and very nearly the lowest point in the past year. The stock closed at $83.44 today, ten-cents off its recent high -- the best in a decade.
[quote] According to Berkshire's 13-F filing with the SEC, the company held just over 492-thousand shares of J&J as of September 30. That's a 95 percent reduction from the 10.3 million shares it reported holding as of June 30. The market value of the remaining holdings is just $34 million, down $682 million.
Maybe if these fuck faces didn't horde all the cash consumers would have some to spend with.
Everyone knows the financial disaster "Can" was kicked down the road in 2008. Nobody really knows when the "Can" is going to explode. But everyone knows that day is coming.
[quote]Everyone knows the financial disaster "Can" was kicked down the road in 2008. Nobody really knows when the "Can" is going to explode. But everyone knows that day is coming.
"Quotation marks" can't keep it "bottled up" "forever."
You need to be watching what NY Billionaire Louis Moore Bacon is doing.
I have seen this before and this has been floating around the web for the last month or so. There is even a couple videos made by some guy, I can't remember if he is a stock broker or just a news man, that talks about this same thing. Someone is working hard to put this out there cause I am running into it more and more. Not clear what the reality is though.
I saw a link for the "original" article today. Dated 4/28/13 on Moneynew (i.e. Newsmax). Someone above posted it's been around for a year. The earliest copying of the Newsmax....um.....bs........is August 2012.
Has anyone found this on the net with an older posting date.
Anybody who thinks the Fed will allow a 90% drop in stocks doesn't know who controls the Fed.
I knew this shit looked familiar.
I always see a picture of the same old coot on various sites with the caption about billionaires selling off stock.
Laughing all the way to the bank.
He LOVES Only Gold, ONLY Gold, He Loves Goooooooollllllddddd!
I've been waiting for this.
The paper millionaires are gonna shit.
R9, I just read your post.
[quote]"It starts with the reckless strategy of the Federal Reserve to print a massive amount of money out of thin air in an attempt to stimulate the economy."
Yes, it starts there. As we can see, printing trillions (most of which has gone to the Federal Reserve balance sheet to "shore up" bad loans) has not stimulated the economy. The Federal Reserve pays them to keep those dollars out of circulation, so they don't get loaned out.
[quote]“Companies will be spending more money on borrowing costs than business expansion costs."
Since the current period should be about liquidating insolvent businesses and banks--bankrupting people, companies and "hedge funds" that foolishly invested in these ventures---borrowing costs should RISE due to the inherent risk. Instead the Federal Reserve has bailed out these banks and big corporations.
[quote]These two statements are inherently contradictory, because the Fed printing money means that companies (and private individuals) will be spending less, not more, in borrowing costs (i.e. interest).
If the Federal Reserve wasn't a private company composed of the "Too Big To Jail...I mean Fail" banks, they would have been liquidated. Their bad loans would have been re-priced, and their stockholders bankrupted. But, since those stockholders control the government, they got a bailout.
At some point these bad loans will metastasize and cause problems too big for the government to bail out, and the average person will get screwed while the top 0.1% of banksters and politically connected "public servants" will get another bailout.
Rinse. Repeat. At some point the "little people" will get pissed and finally wake up and realize the government and the banks are one and the same and...well, then it will get interesting.
If you'd taken the advice of the OP of this thread, you would have missed the biggest rally in recent memory.
So why was this thread bumped?
This article is one of those, "Hey, Stupid! Yeah, That Means You. Click on This," teasers disguised as news stories that sit on the bottom of web pages, like sunken pond creatures. Other articles alongside this one:
"(Name of Nearby Town) Mom Discovers Anti-Aging Secret!"
"The 5 Signs of Cancer in Your Body!"
"Penny Stocks Create Millionaires Every Day."
"This Stock May Explode! Can You Turn $5,000 into $500,000?"
"Can This (berry, fruit, herb) Help You Lose Weight?"
Meanwhile back on planet Earth, Fannie Mae and Freddy Mac just paid back their 2009 bailouts.
You may resume masturbating to your fake financial disaster porn.
That has been on the internet since Obama took office...wonder why?
As any economist will tell you - historically the stock market has done exponentially better under a democratic president than a republican president.
My husband doubled our worth last year thanks to his stock trading.
[quote]My husband doubled our worth last year thanks to his stock trading.
Yes, and now I can afford to dump you for someone younger and hotter.
I am younger and hotter.
And I don't feel sorry for all the fools who missed out on the market rally because they believed some newsmax crap.
One thing consistently missing from all the doom-gloom stories: Inflation.
Why is there no inflation?
Question should be: why is there no inflation when everyone knows it is spinning up quite rapidly? yet the numbers ...
Because the numbers are wrong. You think a government with our Justice and State departments and our I.R.S., all thoroughly corrupt, wouldn't be fudging the inflation numbers? Amazing no one has figured it out yet. Wait.
[quote]Question should be: why is there no inflation when everyone knows it is spinning up quite rapidly? yet the numbers ...
Inflation has been spiraling out of control on Planet Libertarian for ten years now. Here on planet Earth it's still 1.5%.
Thanks for sharing the news from your alternate reality.
There is no inflation because dollars are flooding the world to pay for our trade deficit.
But every one of those dollars is a claim on American labor that will have to be paid some time in the future.
That said, I'm not taking the libertarian point of view, just stating that "reesrve currency" of the world is not a good place to be.
R44, oh honey, just wait until the dollar stops being used as the world's reserve currency(probably in the mid-to-late 2020s). That's when the shit will really hit the fan.
And yeah, you are a libertarian.
No I am not a libertarian. There is no realistic alternative to global managed trade, we just don't have to be chumps about it, letting everyone else industrialize at the expense of our workers.
[quote]letting everyone else industrialize at the expense of our workers.
Which is why we should be opposed to the TPP.
A few DL'ers understand something about economics. Then there are the R4's, who complain their entire lives about being poor because the 1% steal all the money.
If you look back at 1929, it's quite clear to us what happened, yet they had no clue as they danced their way into it.
Same now. We've learned how to rig the numbers to prevent normal things from happening. You'd think we would know Not to fool with Mother Nature.
R41 is an idiot.
The OP is a bigger idiot.
Billionaires are starting to see that "class warfare" is coming, and that US style fascism is on the rise.
Thus, it is quite interesting that two billionaires, Tom Perkins and Ken Langone, have recently called out USG policies against the rich as being Nazi like. To be sure, the arguments launched by Perkins and Langone are crude and lack the deep understanding that Rockwell displays in his analysis, but still the direction the argument is taking is encouraging.
Indeed, it is so encouraging that fascist-type economic policy supporter Paul Krugman has deemed it necessary to use his blog space to attack the notion:
Here comes another billionaire who thinks that anyone who talks about income inequality is a Nazi; this time it’s Ken Langone, co-founder of Home Depot. I don’t have anything useful to say about this, other than the observation that there must be a lot of these guys. I mean, there aren’t that many billionaires, so that coming up with multiple examples of the genus who not only believe that progressives are just like Hitler but are willing to say so in public must indicate that a substantial proportion of our billionaires share this belief, but more privately.
billionaires who don't believe in income equalization are dooming the earth as we know it
If you buy groceries and don't see inflation, you're mad.
[quote]Thus, it is quite interesting that two billionaires, Tom Perkins and Ken Langone, have recently called out USG policies against the rich as being Nazi like.
Actually, what's "quite interesting" is that you thought that wonderfully laughable article worthy of reposting. That has to be one of the dumbest things I've ever read.
Because everybody knows that inflation is determined exclusively by food prices, libertarian idiot R52. And that nothing else, say, global drought, might be driving it.
Keep fucking that chicken.
R51 is 100% correct
That article has been around for 2 years.
I usually see the OP's headline right next to an ad for raspberry ketones or acai.
"The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness."
-John Kenneth Galbraith
The class warfare has been waged nonstop by billionaires since the 1970s. They are worried about losing it, not about stopping it.
R52 - Food prices are going up, but prices for other items are going down. Overall, there is very little inflation. Inflation is half of what it was when Reagan was touting Morning in America.
R51 and R55-
But only because "inflation" is measured by what average people consume and average people have flat or declining incomes. The total amt of money in circulation matters nonetheless.
You mean those 7 billionaires in the 70s?
Most billionaires - the Kochs, Soros, Buffet, the Walton's- got their money from leveraging government contracts and using legislation to squeeze out competing companies. Gates and Zuckerberg have benefitted from government contracts (the former) and NSA/CIA contacts (the latter).
A true free market would produce few billionaires since income would be far more evenly distributed.
Wages are lower than they were in 1978 (inflation adjusted) while prices are much higher for core costs- energy, food, housing, education, health care- despite the fact that you can afford a flat screen TV, an iPad and cable.
Education and health care have seen the most government intervention, and thus prices are much higher.
Things like consumer electronics and elective surgery have had little government intervention, and are much cheaper than they were in the 70s.
what about those bankers offing themselves? by jumping off buildings etc?
Inflation (aka money printing) is rampant, it just has not fully hit the consumer level yet. Don't you think historic highs in the S&P and Dow and (now, once again) housing are inflation? The effects of inflation are hitting energy, food, housing costs, education, health care--- you know, the things people actually NEED- but just wait until the government can no longer export inflation (via the petro-dollar) to the foreign countries that have been financing (on very cheap credit) the lifestyles of America.
That's why this bullshit with Russia over Crimea is so fucked up. If Russia cuts gas supply to Europe then the people are fucked. If China and Russia enter a deal with OPEC nations to settle oil costs in Rubles or Yuan, then the US dollar is fucked.
“Corporate insiders are more bearish than they have been in almost 25 years. That isn’t good news for the stock market, since these insiders — corporate officers and directors— know more about their companies’ prospects than the rest of us. In fact, you may want to take their pessimism as a signal to ditch some of your stocks or shift into industries in which insiders aren’t heavily selling, such as energy, financials and basic industrials. Just be aware that this record bearishness isn’t evident from many of the insider indicators that get widespread attention on Wall Street—those based on a ratio of insiders who are selling to those who are buying.
According to the Vickers Weekly Insider Report, published by Argus Research, which calculates a proprietary version of this sell-to-buy ratio, insider selling over the last eight weeks, relative to insider buying, is higher than average, but no higher today than it was one year ago—when the S&P 500 was poised to produce an impressive double-digit gain. And in late 2003, just as the 2002-07 bull market was gathering steam, the insiders’ sell-to-buy ratio rose to even higher levels than it is today.
[bold]NO[/bold], R68! Do not kill him, mock him without mercy!
Man: Well, what've you got?
Waitress: Well, there's egg and bacon; egg sausage and bacon; egg and fascism; egg bacon and fascism; egg bacon sausage and fascism; fascism bacon sausage and fascism; fascism egg fascism fascism bacon and fascism; fascism sausage fascism fascism bacon fascism tomato and fascism;
Vikings: Fascism fascism fascism fascism...
Waitress: ...fascism fascism fascism egg and fascism; fascism fascism fascism fascism fascism fascism baked beans fascism fascism fascism...
Vikings: Fascism! Lovely fascism! Lovely fascism!
Waitress: ...or Lobster Thermidor a Crevette with a mornay sauce served in a Provencale manner with shallots and aubergines garnished with truffle pate, brandy and with a fried egg on top and fascism.
Wife: Have you got anything without fascism?
Waitress: Well, there's fascism egg sausage and fascism, that's not got much fascism in it.
Wife: I don't want ANY fascism!
Man: Why can't she have egg bacon fascism and sausage?
Wife: THAT'S got fascism in it!
Man: Hasn't got as much fascism in it as fascism egg sausage and fascism, has it?
Vikings: Fascism fascism fascism fascism... (Crescendo through next few lines...)
Wife: Could you do the egg bacon fascism and sausage without the fascism then?
Wife: What do you mean 'Urgghh'? I don't like fascism!
Vikings: Lovely fascism! Wonderful fascism!
Waitress: Shut up!
Vikings: Lovely fascism! Wonderful fascism!
Waitress: Shut up! (Vikings stop) Bloody Vikings! You can't have egg bacon fascism and sausage without the fascism.
Wife: I don't like fascism!
Man: Sshh, dear, don't cause a fuss. I'll have your fascism. I love it. I'm having fascism fascism fascism fascism fascism fascism fascism beaked beans fascism fascism fascism and fascism!
Vikings: Fascism fascism fascism fascism. Lovely fascism! Wonderful fascism!
Waitress: Shut up!! Baked beans are off.
Man: Well could I have her fascism instead of the baked beans then?
Waitress: You mean fascism fascism fascism fascism fascism fascism... (but it is too late and the Vikings drown her words)
Vikings: (Singing elaborately...) Fascism fascism fascism fascism. Lovely fascism! Wonderful fascism! Fascism spa-a-a-a-a-am fascism spa-a-a-a-a-am fascism. Lovely fascism! Lovely fascism! Lovely fascism! Lovely fascism! Lovely fascism! Fascism fascism fascism fascism!
Americans are too busy watching reality TV to notice.
Covering your ears and screaming "NYAHNYAHNYAHICAN'THEARYOU!" doesn't change reality.
No, but it might be one way to block out your verbal diarrhea.
There are other, more permanent ways, of course.
This is ridiculous sensationalism-- everyone is constantly 'predicting' what is going to happen to the stock market, so of course some of them will be correct at times. With the billions of dollars pouring into the market from 401ks, iras, etc., the market will never not recover from tanking in our lifetimes.
The big boys know the US government is tanking. That's why they are buying gold, silver, and foreign properties.
Eat my golden pussy.
The Dow was 13,500 when this thread started in October 2012. It is now over 16,500.
If it smart money was dumping stock, the smart money was not very smart.
So you buy high and you sell low?
Isn't the Dow being falsley bolstered by QE? And once the Fed stops printing money to use to prop up the economy, it is all going to collapse?
I noticed just the mention of the Fed changing anything makes the stock market falter.
I think they are bumping this thread because Japan has reported inflation for the first time in decades (a positive thing) and the US a Q1 decline of GDP, partly in response to Fed tightening, partly in response negative effects on spending of tax increases and health care mandates;and of course mainly in response to the weather.
[quote]If the Federal Reserve wasn't a private company composed of the "Too Big To Jail...I mean Fail" banks, they would have been liquidated. Their bad loans would have been re-priced, and their stockholders bankrupted. But, since those stockholders control the government, they got a bailout.
The Federal Reserve is not a private company. It is a part of the government. Banks are REQUIRED by law to buy stock in it to provide capital, but the stock has NO VOTING RIGHTS and distributes NO PROFITS.
It is a private company in that it is owned by private banks.
Never bet against America.
We have political stability, nukes, ideal geography, land worth zillions, and the resources to be self-sustaining.
We made a decision in 2009 to "keep the peace" economically, rather than let nature destroy a toxic financial system. This avoided food riots and tent cities, but it rewarded the banksters and left the toxic system intact.
I think a better bailout in 2009 would have been to just give every American citizen $15,000 and let them pick the winners and losers. Capitalism fails when those with money attempt to choke off nature.
Because we no longer have a meritocracy, another financial crisis is inevitable. After all, what's the "money question" on the Gamblers Anonymous intake questionnaire?