Rats jumping ship? Pessimistic executives cash out of shares

[marmar]

from the Financial Times:



Pessimistic executives cash out of shares
By Anuj Gangahar and Michael Mackenzie in New York

Published: June 23 2009 03:00 | Last updated: June 23 2009 03:00


Growing pessimism about the prospects for a global economic recovery sent stock and commodity prices tumbling yesterday while new data showed that leading US corporate executives were cashing out of their share holdings at a rapid pace.

US government bond yields followed equity prices lower, confounding analysts who had expected that Treasury rates would rise this week as the federal government auctioned off a record $104bn of debt.

Analysts said the market mood was captured by a World Bank report that said the global economy would contract 2.9 per cent this year, compared with a previous estimate of a 1.7 per cent fall. A White House spokesman said later in the day that the US unemployment rate was likely to rise to 10 per cent in the next couple of months.

The downbeat commentary reinforced the view that investors should be more worried about the impact of economic weakness on corporate profits than the possibility of higher inflation and interest rates.

"We have had a great run in equities, emerging market currencies, credit and other risky assets, now people are struggling to justify lofty valuations," said Alan Ruskin, strategist at RBS Securities. He added: "The 'green shoots' argument for the economy was very tentative to start with." .............(more)

The complete piece is at: http://www.ft.com/cms/s/0/36a8ae54-5f8e-11de-93d1-00144feabdc0.html