Insider Stock Sell Off: 3,177 to 1 Sell-to-Buy Ratio

by | Oct 28, 2010 | Headline News | 13 comments

Do you LOVE America?


    If our economic fundamentals are sound and our largest corporations are set to prosper in coming months and year, then why are company insiders selling their stock holdings like hot cakes?

    The overwhelming volume of sell transactions relative to buy transactions by company insiders over the last six months in key leading sectors of the market is the worst Alan Newman, editor of the Crosscurrents newsletter, has ever seen since he began tracking the data.

    The largest companies in three of the most important leading sectors of the market have seen their executives classified as insiders sell more than 120 million shares of stock over the last six months. Top executives at these very same companies bought just 38,000 shares over that same time period, making for an eye-popping sell to buy ratio of 3,177 to one.

    The grand total for the three sectors are “as awful as we have ever seen since we began doing this exercise years ago,” said Newman, who was ahead on such trends as the dangers of high-frequency trading and ETFs before the ‘Flash Crash’. “Clearly, insiders are seeing great value only in cash. Their actions speak volumes for the veracity for the current rally.”

    Source: CNBC

    Remember, that the sellers of these securities are directors and insiders at our major corporations. If the recession is over, and boom times are on the come back, why are they selling 3,177 shares of stock for every share purchased?

    Maybe they’ve seen the ‘real’ corporate numbers and economic estimates, or they’ve heard something in their high-level meetings that has them all spooked.

    Or, perhaps they know that the Titanic has, in fact, struck an iceberg. Taking a lesson from history, while the band plays on, they’ve decided to jump ship.

    Whatever the case may be, the top echelons of corporate management are, literally, not buying it.


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      1. The crew is passing out life jackets straight jackets quietly while the band is ordered to play on.  No rushing the life boats.  Women & children  bankers/politicians first.  Dress warm.  Gee, look at the fireworks!  What do you mean I can’t take my bag.  But, it’s so dark & scary.  What should I do?  This boat is un-sinkable.  Here we go, hang on.

      2. The answer to what is happening here is quite simple; The rats have started to leave the sinking ship! They are well aware that our economy is going to crash and burn, they want to get out before this happens.
        So they sell their shares of stock, and convert them into FRNs. But, because they know that soon the FRNs will be without any value whatsoever, they will have to place these assets somewhere else. Where? Gold? Silver? Commodities? Oil furtures?
        It really won’t matter very much in the long run where these
        a–holes put their ill gotten gains. People know who they are. The targets may not be visable to the naked eye; but those who have raped, looted, pillaged and burned our economy might just as well wear actual targets on their backs just the same.

        Mr. Bankster and Mr. Stockmarketeer might think that they will be safe and secure behind the walls of their compounds and hiding behind their hired security goons and thugs. You can’t purchase true loyalty or friendship. There is a righteous wrath of the retribution of the common man and woman headed in the direction of the elites.

        I’m just glad that I haven’t done anything to piss the general population off at me the way that the banksters, stockmarketeers, politicians and their minions have done.

        This isn’t going to be at all friendly or fun for those in positions of power and authority that have abused our trust and betrayed us for their own personal gain and greed. Maybe God will forgive them ……. but the little people that they have screwed over damn sure won’t. I have the feeling that it is going to get very ugly out there very quickly.

        God Bless & good luck to all my fellow “little people” out there.

      3. the american stock markets are the engines of worldwide economic prosperity. the insiders mentioned in this blog are very smart and, in addition, have real smart teams of megaprofessional advisors. it’s obvious what these insiders are doing. they are selling ordinary stocks to accumulate cash so they can buy call options on 30:1 margin so as the market goes up even further when the banks get trillions of dollars in the upcoming QE II cash infusion. the QE II liquidity infusion will extend the current bank sector bubble. our governemt has wisely reduced interest rates to near zero so these banks cans get real cheap money then use this money to make more money investing in options on 30:1 margin. this  is the way our federal government enables the bank insider investors who have contributed so much to the welfare of america to make enhanced profits  and then use some of this money for campaign contributions to hard working republican and democratis “friends of banking.” . if however things don’t work well the banks can get bailed out as they did before with taxpayer funded TARP plans. bank assets have currently declined after the first TARP plan so bonuses are in danger of being lowered beneath $450,000 so the banks need QE II to optimize salaries and bonuses so these bank executives and employees can continue their work stabilizing our economy even further.

        remember. do what our bankers do. during a bubble buy call options when the bubble is expanding and put options when the bubble collapses. do this with money borrowed from the taxpayers.

        now is the time to buy stocks and call options of american banking stocks like goldman-sachs, bank of america and citicorp.

        the american banking industry is the money engine of the world and has enabled prosperity to expand in many areas of the world.

        p.s. remember to save as many ten dollar bills as possible for the rainy days if the democrats don’t lose the house and senate in the upcoming election.

        god bless america. god bless goldman-sachs and the federal reserve bank…

      4. Has more to do with the potential of the capital gains tax laws changing in 2011.   They are saving a 5% tax rate hike by cashing in now.

      5. All of the life boats have been lowered.  What are we going to do now?  It’s 70 feet down to the cold water, I’m not going to jump.  You jump.  Besides, I can’t swim.  You can’t swim?  No, I can’t swim.  Hell, the fall alone will probably kill you!  Kid, the next time I say, “Let’s go someplace like Bolivia,” let’s GO someplace like Bolivia.

      6. Comments….. Eman called part of it.  The business of America is business. The name of the business is tax revenue enhancement.

        There is another factor to consider. We presume that the wealthy have lots of money and no debt. Bullshit! Most everyone that has had a multi-year increase in salary spends proportionately for a time and then starts buying on future based assumptions.

        Bottom line; they are tapped out of disposable income and are liquidating assets that still have value. Being corporate insiders, they have access to a plethora of industry analysts who are predicting the coming sh*t storm and how it will affect corporate incomes.

        Along the same lines as Eman pointed out, the tax structure is in for major changes. The public is demanding stiffer taxation for corporate entities. The same public doesn’t understand that the consumer pays this tax in increased retail pricing. None the less, the US gov’t will increase corporate taxes and with the decline in spending already at hand, spending will decline and tax revenues drop further.

        Corporate insiders are just doing what Americans are doing; debt reduction and protecting assets. You really don’t think stockholders will authorize the ginormous corporate bonuses indefinately do you? Will it help the insiders to reduce thier exposure to the declining economy? No, not at all.

        When you are on the bottom rungs of the ladder, you can see the ground and it ain’t far to fall.  Been there, done that and survived.

        When you are high up the ladder, you can’t see ground so well, don’t believe you could fall that far and either forgot or never experienced the bottom.

        The difference is the belief system. The folks on the bottom know how bad it is and have an inkling of how bad it could potentially get. The folks at the top believe that the system will prevent the inevitable. The system always has, it always will, until it doesn’t.

        Pilot on intercom: “As you have noticed, we are experiencing some severe turbulence. We have turned on the seat belt lights. Please make sure your seatbelts are securely fastened and your tray tables and seats are in the full upright and secure position. You might take some time to observe the emergeny exit locations. Thank you for flying high on the hog with USA.”

        Pilot to co-pilot: “We are so screwed. There ain’t no way we can set this heap down in one piece.”

      7. Co-pilot to pilot:  Are you eating the fish or chicken?
        Pilot to co-pilot:  I’m not sure, which one is the round one?
        I think the round one is chicken.
        Co-pilot to waitress:  I’ll have the roast beast waitress.
        Waitress to co-pilot:  I’m a flight attendant you jackass.
        Co-pilot to flight attendant:  Do you know how you tell if there’s a fighter pilot in the cockpit?
        Flight attendant to co-pilot:  Ya, ya, he will tell you!

      8. Comments…..The Titanic has been cruising along,people onboard have been enjoying the ride,the party has been enjoyable. The staff of the Titanic has been lying to their customers,there is danger all around them but the captain won’t listen. He says full steam ahead,screw the facts.

        That iceberg is getting closer and closer,the staff have their lifeboats picked out and may have already loaded their belongings on them. The customers are still not aware of the danger ahead,that their lives are in danger. They believe what they are told,and continue partying……

      9. yea, but, hasn’t the American public demanded … lobbyist out of Washington? Jobs? better health care, better schools, transparentcy, end to wars.  I dont think we get a voice.
        I do know the more you have the more you spend, but selling off stocks 3177 to one seems to reach beyond “I need another trip to France.” or “How will we ever pay for that condo in Italy?”  Maybe the cost of Harvard and Yale has gone up?

      10. Most of these executives are very smart. Most of them can recognize the fundamentals of a sellers market which is what we have been in since Sept. The entire stock market is way above it’s 200 day moving average right now – I mean WAY above. In other words, stocks are overpriced right now. Smart people sell things that are overpriced. Can the market still rally for another few months or so? Sure. But serious profits have been made since the lows of July so why not bet on a sure thing and sell your stock while it’s still high? That is likely the reason for the current insider selling. I have seen this before. Insiders have been know to sell hard for months sometimes before the market starts to tank. In other words, it’s not a perfect indicator of a market top. 

        A real sharp decline (if one comes) will be the result of some kind of catalyst. The most obvious potential catalysts could be the upcoming elections and/or the upcoming fed decision on 11/3 and how either of those events may be a disappointment to investors – triggering a change in sentiment. I am not saying the market is going to tank, but if it does something will have to trigger it, that’s all.

        One last thing I want to say is: I believe that any pullback we see in stocks or gold and silver will be temporary. We are not in for a long term bear market in my opinion. This is not the 1930s. There was no one named Bernanke back then who printed enough money to buy a small country every day for years at a time. Long term, the market is headed higher. The problem is so are food and energy prices. The real question is: will your income keep up with inflation?

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