Buckle up: market plunge ahead. (Insider Report).

Speaking to a gathering of central bankers in Berlin on June 3rd, Federal Reserve commissar Alan Greenspan declared that he saw indications of a "fairly marked turnaround" in the U.S. economy. Greenspan's remarks sent stocks surging.

On June 4th, the Dow edged above the 9,000 benchmark, leading many investors to conclude that the market bulls are running again, and that the long-anticipated recovery had arrived. "People are now looking for reasons to buy stocks, not sell them," Michael Murphy, head trader at Wachovia Securities in Baltimore, told the Washington Post.

As a June 4th Wall Street Journal story pointed out, not everybody is joining in the buying frenzy. "Executives are rushing to sell their companies' shares at a pace not seen since 2001," noted the Journal. "More than $3.1 billion in shares was sold in May by corporate insiders, the most such selling in 24 months.... The moves are a concern because 'insider' buying and selling -- by people who presumably are the most knowledgeable about their companies' prospects -- have been good predictors of the market's direction. For example, many executives sold their holdings in early 2000, just before a bear market in stocks began. Now, many again are locking in profits ... on the heels of the market's recent gains."

Bill Bonner, publisher of The Daily Reckoning (an online financial and investment report), points to other ominous signs that the economy -- rather than recovering -- has a long fall ahead before bottoming out. Among the signs seen by Bonner are those advertising bankruptcy counseling services. "In America, in the springtime of the third year of George W. Bush's rule ... bankruptcy has become as popular as weight-loss," comments Bonner. "Bankruptcy rates are hitting records despite the best efforts of those who manage the economy.... In addition to bankruptcies and unemployment, business profits as a percentage of GDP have fallen to their lowest level in about 40 years."

The last fact mentioned by Bonner would explain the corporate insiders' eagerness to lock in profits now, while investors -- enticed by the Bush administration's targeted reduction on taxation of dividends, and by the Fed's loose-money policies -- are lured back into a badly inflated stock market likely overdue for a catastrophic plunge.