What the Insiders are up to..
The European dilemma is just an extension of the U.S - financial crisis that began in 2008. Now the explosive acceleration is just starting or rather continuing. The realization of a European debt default and a slowdown in Europe will effect America, China and us here in Australia.
Italy has seen interest rates soar, then fall, then climb again over the past week, with an auction Monday producing a high yield for 2 year debt at 6.29%.
That’s better than the 7.20% blowout last week, but still unsustainable for financing a 1.9 trillion-euro debt.
The hedging strategy that the banks use is only as safe as the insurer to pay out remember (AIG) American International Group. Here is how it works – banks that hedge or called “nets out” only really expose on their books their risk to the Insurance policy, this allows them to take on more and more risk.
By buying Credit default swaps (heard of them? this is exactly what caused the failure of AIG, the biggest global insurance company that had to have a bailout by the FED or the banking system as we know it today wouldn’t be here)…Yep it’s that serious.
That’s why the prevention of triggering the credit default swaps in Europe is trying to be delicately engineered as the risk to the banks will explode and implode.
If the FED didn’t step in in 2008 to bailout AIG all the banks would’ve collapsed lucky for that printing press, one of the best assets they have …or is it?
Well Europe doesn’t have their own printing press, so they may have to rely on the FED to wire them some money (you know that electronic type where you just push a button and magic you have credit.)
Just add it to the $14.7 Trillion …( a few more trillion won’t hurt will it?)
The Global financial system or the ones that control it are just an inflection of what happens on a smaller scale down the line with the pawns in the game.
One thing I learnt with organizations that run or control things is that corruption always starts at the top. So it does not surprise me at the corruption and lies we are seeing from individual companies.
Back in 2001 when Enron was collapsing a buy rating was issued at $65 then $45 then $25 as I recall it, the last analyst to bail on Enron pulled his “buy” rating as the stock hit $2.
The same thing I have been seeing today, and what should really scare you straight is the current percentage of analysts who still rate stocks a “buy” as their share prices plummet 50% — 70% for Citigroup (with 10% “sells”), and 38% for BAC (with just 4% “sells”).
The same thing happens here in Australia as I remember also Babcock and Brown and HIH Insurance.
So who are we listening to? by doing some simple research we can detect the lies. How so you may ask?
Once you know how to recognise the signs, you can see how tactics used to offload shares to the uninformed investors, obviously the insiders are selling and they need new buyers to take their falling shares off them.
Here’s a current example (GMCR) Green mountain coffee roasters after rising from $30 to $110 in 8 months insiders started selling huge amounts of shares owned, an alarming amount in the millions at the same time analysts were recommending a buy on the stock.
What I saw just like ENRON was a deliberate scam to offload shares to the uninformed investor, on top of that they were taking the opposite trade, oh yes shorting the stock. It became evident last week when the stock fell from $70 to $40 that they were cooking their books just like ENRON.
You see the insiders know what is going on well before the public do they are always the first to act when they have information that is only known on the inside.
I pay close attention to have a deeper understanding of how these games are played and where I like to play them is doing what the insiders are doing, so I too bought a put option on GMCR that netted me a gain of $400% in a week.
If you were long on the stock, most of your wealth was wiped out in one day and who took your money?….The insiders.
It’s time to get smarter. The only way to profit is to follow what the insiders do.
It’s a simple process that can often be detected just by doing a little bit of research on a recommendation, not only will it save you from a loss and keep you out of a bad position but it gives you an opportunity to profit also.
So despite the corruption and manipulation going on you don’t have to be disheartened, there are endless opportunities out there for us to trade.
