Billionaires Dumping Stocks, Economist Knows Why.

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%.

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“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.”

When do you know the ship is sinking?


The rats are bailing off of it before anyone else knows the ship is sinking!

never a good sign, these guys have all the money and when your average investor sees this they get really jittery and stop investing and worse yet, they bail too!

"To re-elect President Obama would be like the Titanic backing up and hitting the iceberg again!"


........and,by damn if it didn't back up,and went Full Steam Forward!

maybe by now they have figured out that the Stock is worth way more than the Corporations it represents!

Are you kidding?

JP Morgan Chase, Citigroup, Goldman Sachs are the "to big to fail" banks .... that are going to fail. CEO's are resigning, rats are leaving those sinking ships.

People are learning the truth that all paper contracts are worth the paper they are printed on.

No one is purchasing our debt anymore except the Federal Reserve.
And they are printing fiat money.

It's clearly a fat bubble, but I'm in the passenger section so my retirement will take another hit. Frankly 401k is simply paying your taxes directly to the corporations that are lobbying to destroy us by default greed.

If your money is in a 401K get out of it any way you can and collect your money... or you may loose it.