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Posted on 17 August 2012 | 8,413 views

Soros and Buffet Sell Stocks as the Federal Reserve is Preparing Contingency Plans for a Complete Financial Collapse

Question: The Dow has crossed over 13000 and is touching its highest levels since April of 2008 — so why are Soros and Buffett unloading stocks? Answer: The Federal Reserve has already coordinated with major U.S. banks (announced last week) to prepare contingency plans for a complete financial collapse.

While the stock markets are reaching new four year highs, the underlying foundation of these stocks are not very strong, and the low volume in the markets signals that very few retail investors are actually participating in the summer rally. Thus the low volume, positive trading that is taking place in July and August leaves the markets wide open for a massive correction, or at the very least, new selling pressures when seasonal volume picks up later in the month and into September.

The rich historically have more information available to them than the average investor does, and it has been prudent over time to follow closely what the major traders do. Thus it is extremely concerning to the American people, and for the future of the U.S. financial system, when global investors and political insiders divests from consumer and financial stocks, especially at a time when many of them they are trading at four year highs, to instead what appears to be a prelude for a new stock market crash in equities.

Soros, who manages funds through various accounts in the US and the Cayman Islands, has reportedly unloaded over one million shares of stock in financial companies and banks that include Citigroup (Ticker Symbol: C) (420,000 shares), JP Morgan (Ticker Symbol: JPM) (701,400 shares) and Goldman Sachs (Ticker Symbol: GS) (120,000 shares). The total value of the stock sales amounts to nearly $50 million.

What’s equally as interesting as his sale of major financials is where Soros has shifted his money. At the same time he was selling bank stocks, he was acquiring some 884,000 shares (approx. $130 million) of Gold via the SPDR Gold Trust.

Recently, Buffett has complained of disappointing performance at some of the more consumer-oriented holdings of his Berkshire Hathaway (Ticker Symbol: BRK-A) (Ticker Symbol: BRK-B) investment vehicle — now, in a regulatory filing dated August 3, 2012 — Berkshire is reporting about a 21% reduction in the amount of consumer products stocks it holds.

Stocks such as Johnson & Johnson (Ticker Symbol: JNJ), Procter & Gamble (Ticker Symbol: PG), Kraft (Ticker Symbol: KFT), Visa (Ticker Symbol: V), CVS Caremark (Ticker Symbol: CVS), General Electric (Ticker Symbol: GE), and Verisk Analytics (Ticker Symbol: VRSK) were sold off.

Berkshire Hathaway sold off almost the entire stake in Ingersoll-Rand (Ticker Symbol: IR), only leaving 20, 000 shares behind and holdings in United Parcel Service (Ticker Symbol: UPS) were also reduced by 81 percent.

The legendary investor exited his entire position in Intel (Ticker Symbol: INTC) during the second quarter — Berkshire Hathaway bought into the computer chip making firm just three quarters ago. Such a rapid exit is rare for Buffett, who is known for his buy-and-hold stradegy of value stocks.

Buffett appears to be reducing his “bets on consumer products stocks” — if that’s what he is in fact doing, then this might bode poorly for an economy that depends on consumer spending for 70% of its growth.

When major global players with direct ties to the White House, Wall Street, and the banking system starts off-loading stocks, it suggests a very serious market move is set to happen.

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  • Ellen Mayo said:

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  • Barbara Levich said:

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