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.
Editor’s Note:
Wiedemer Gives Proof for
His Dire Predictions in This Shocking
Interview.
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.
“These funds haven’t
made it into the markets and the economy yet. But it is a mathematical certainty
that once the dam breaks, and this money passes through the reserves and hits
the markets, inflation will surge,” said Wiedemer.
“Once you hit 10%
inflation, 10-year Treasury bonds lose about half their value. And by 20%, any
value is all but gone. Interest rates will increase dramatically at this point,
and that will cause real estate values to collapse. And the stock market will
collapse as a consequence of these other problems.”
See the Proof: Get the Full Interview by
Clicking Here Now.
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.”
Read Latest Breaking News from Newsmax.com
http://www.moneynews.com/MKTNews/billionaires-dump-economist-stock/2012/08/29/id/450265?PROMO_CODE=110D8-1&utm_source=taboola#ixzz2K971uzzL
.