Goldman Sachs is Wrong

Written By Brian Hicks

Posted September 1, 2009

Goldman Sachs and Morgan Stanley may be bullish on the economy, but not every one is drinking the Kool-Aid. Paul Tudor Jones, billionaire manager of Tudor Investment, Clarium Capital Management and Horseman Capital Management sure aren’t… and neither are some corporate insiders.

Tudor recently told investors that stocks are in a “bear market rally” and nothing more, adding “some critical initiatives have been cut short. As a result, toxic assets remain on balance sheets and credit growth is likely to be subdued for a long period.”

Clarium’s Kevin Harrington said, “this is more likely a ski-jump recession with short-term stimulus created a bump that will ultimately lead to a more precipitous decline later.”

And, says, financial journalist and neuro-economist Jason Zweig “don’t he happy, worry.”

Since September 2008 to March 2009, notes Zweig, “officers and directors of publicly traded companies sold twice as much stock in their own companies as they bought, considerably less than the historic average of 7 to one.” By August 2009, the ratio jumped to 31:1.

“The people who run companies don’t know exactly what the future holds, but they do know more about their own firms than outsiders do,” Zweig observes. “If they are furiously selling, how eagerly should the rest of us be buying?”

But I can’t help but wonder… where have I read about warning signs of impending doom before?

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