Archive for June, 2009


June 25, 2009

Is Another Stock Market Collapse Imminent?

June 25, 2009 | From

Strong insider trading could mean that bad news is just over the horizon.

Business owners are losing faith in the companies they run. U.S. business executives are selling shares in their companies at the fastest pace since the credit crunch began two years ago, reports show. This may indicate an impending stock market slump.

“Historically, insiders have been a leading indicator of where the market’s going to move, and we’re seeing a clear indication that insider sentiment is becoming more neutral if not approaching bearish levels,” says the editor of Vickers Weekly Insider Report, David Coleman.

“Insiders” are company executives and directors, who usually know best how their companies are doing. They have information not available to the public. For these reasons, they are required by law to report how much stock they buy and sell.

Data compiled by shows that insiders working for companies on Standard & Poor’s 500 index were net sellers for 14 weeks straight.

Three months ago, insiders were buying shares in their own companies as the S&P 500 index reached its lowest level in over a decade. Now they have shifted from buying to selling in a big way. TrimTabs Investment Research reports that insiders have sold $2.6 billion worth of stock so far this month. That is 22 times the $120 million in stock they have bought: a ratio of $22 sold for every $1 bought.

Bloomberg reports:

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.”

Historically, this has not been a good sign, as Bloomberg points out:

The last time there were more U.S. corporations with executives reducing their holdings than adding to them was during the week ended June 19, 2007, the data show. The next month, two Bear Stearns Cos. hedge funds filed for bankruptcy protection as securities linked to subprime mortgages fell apart, helping trigger almost $1.5 trillion in losses and write-downs at the world’s biggest financial companies and the 57 percent drop in the S&P 500 from Oct. 9, 2007, to March 9, 2009.

Insider selling during the height of the dot-com bubble in the first quarter of 2000 climbed to a record $41.7 billion on a net basis, according to data compiled by Bethesda, Maryland-based Washington Service. The sales coincided with the end of the S&P 500’s bull market and preceded a 2½-year slump that erased half the value of U.S. equities.

Not all experts agree that another stock market fall is coming. The director of research at O’Shaughnessy Asset Management, Bill Latimer, doesn’t believe that insider selling is a good way of forecasting stock performance. “When you’re dealing with an individual’s buying or selling, you’re clouding the picture with what their specific financial situation may be,” he said.

Nevertheless, the whole American financial system is in uncharted territory. A major crash is coming, at some point soon. This collapse, however, will eventually have a good outcome. To find out how, read “The Future of Money.” •


June 12, 2009

The End of the U.S.-Israeli Alliance

June 12, 2009 | From

Obama abandons historic ally to win favor from Muslims.

Stephen Flurry

In his Cairo speech last week, President Obama said the historic bond between the U.S. and Israel was based on Jewish aspirations for a homeland that were “rooted” in the tragedy of the Holocaust. In fact, Jewish aspirations for statehood not only predate the Adolf Hitler era, they predate the Zionist movement.

In 1879, ten years before Adolf Hitler was even born and nearly two decades before Theodore Herzl published The Jewish State, the venerable New York Times made this prediction: “So much has been said for generations of the Jews regaining possession of Jerusalem that it is agreeable to think that they are likely to do so at last. They certainly deserve Jerusalem” (emphasis mine throughout). Much had been said, of course, because of the Jews’ millennia-old roots that run through Jerusalem and the surrounding hills of Judea and Samaria.

Palestinians, of course, have reinvented this history, claiming the Jews are without legal or historic right to their homeland and that modern-day Israel exists only because of the guilt left hanging over Europe after the Holocaust.

Last week, the president of the United States legitimized this bit of Arab propaganda.

And in the very same speech, he delegitimized the “natural growth” of Israeli settlements in Judea and Samaria, as well as Jerusalem suburbs, by demanding, “It is time for these settlements to stop.”

Even Democrats on Capitol Hill were alarmed. “I do not support a settlement freeze that calls on Israeli families not to grow, get married, or forces them to throw away their grandparents. Telling people not to have children is unthinkable and inhumane,” said Rep. Gary L. Ackerman, a New York Democrat.

Charles Krauthammer, who made a similar point in his column last week, also noted how farcical it was to blame the moribund peace process on settlement growth.

Ten years ago, President Bill Clinton and Prime Minister Ehud Barak offered the Palestinians 94 percent of the West Bank, East Jerusalem and unrestricted control of the Temple Mount. Added to that, in exchange for the most densely populated Jewish settlements, Barak offered a land swap that amounted to about half the territory Israel would retain to keep its largest settlements intact.

In swift response to the generous offer, Nobel Prize winner Yasser Arafat unleashed a bloody five-year campaign of rockets, sniper fire and suicide bombings aimed primarily at civilians. The second intifada resulted in the murder of more than 1,000 Jews.

In response to a particularly bloody month in 2002, Israel launched Operation Defensive Shield into Judea and Samaria and later constructed a 465-mile fence to separate the West Bank from Israel proper.

Last year, largely relying upon the boundaries established by the security fence, lame duck Prime Minister Ehud Olmert offered the Palestinians 93 percent of the West Bank, a one-for-one land swap for the larger Jewish settlements, including territory adjacent to the Gaza Strip and a checkpoint-free passageway connecting the Strip to the West Bank, a luxury Palestinians never had even before 1967.

Mahmoud Abbas’s spokesman called the Israeli proposal a “waste of time” and said it demonstrated a “lack of seriousness” on Israel’s part. But in comparing the most recent offer with the Camp David proposal in 2000, the landmass offered to Palestinians was actually a bit larger this time around, even after 10 years of natural growth in Israeli settlements.

Clearly, then, it’s not settlement activity that’s obstructing the process for peace. It’s the presence of Jews. As Abbas’s spokesman told the Palestine News Agency, “The Palestinian side will only accept a Palestinian state with territorial continuity, with holy Jerusalem as its capital, without settlements, and on the June 4, 1967, boundaries”—meaning hundreds of thousands of Jews would have to be removed from Judea, Samaria and East Jerusalem.

Even then, assuming Israel would ever agree to a massive evacuation that would dwarf the Gaza pullout of 2005, it’s difficult to imagine Fatah accepting such an offer, given its stubborn refusal to recognize Israel’s right to exist.

Then there is Hamas, which grabbed hold of Gaza less than a year after Israel completely evacuated all of its settlements, and remains adamantly opposed to any Palestinian state coexisting with Israel as its next-door neighbor.

Hamas and Fatah, if truth be told, remain steadfast in their aspirations for a homeland that includes all of Israel being ethnically cleansed of any Jewish presence.

Which brings us back to President Obama’s unreasonable demand for Israel to freeze settlement growth. Of all the “road map” issues that need settling before the establishment of a Palestinian state, why would the United States now elevate the marginal issue of settlement growth to the top of its Middle East peace agenda? Calling for a settlement freeze only applies intense pressure on an already fractured relationship between Washington and Jerusalem.

This, as several commentators have noted, is exactly what the new American government wants. In creating this crisis, Stratfor explains, Obama wins no matter what Israel’s response might be. “If Netanyahu gives in, then [Obama] has established the principle that the United States can demand concessions from a Likud-controlled government in Israel and get them” (June 8).

And if Netanyahu doesn’t give in, which is much more likely when viewing the collision from a prophetic standpoint, Obama can drive a wedge between the U.S. and Israel and then “use that split as a lever with Islamic states,” Stratfor notes.

The United States, in other words, is renouncing its special relationship with Israel in order to boost its standing in the Muslim world.

We’ve been predicting this U.S.-Israeli division for many years, thanks to two specific prophecies found in Hosea 5:13 and Zechariah 11:14. In the latter verse, God said He would “break the brotherhood between Judah [modern-day Israel] and Israel [primarily the United States and Britain].”

This is why in Hosea, God says that Judah, after being mortally wounded by the peace process, would seek help from Germany, rather than the United States.

President Obama went to Cairo last week in search of a “new beginning” in the relationship between the United States and the Muslim world. In doing so, the U.S. effectively ended its brotherly friendship and strategically critical alliance with Israel.

That “unbreakable” bond between America and Israel, the president’s assurances notwithstanding, is now broken. •