HOUSING BUBBLE

In an article in U.S. News and World Report this week the National Association of Home Builders said that "builders still remain upbeat and confident in the housing market" and added that "builder attitudes suggest that new-home sales and starts will continue to be brisk." On the other hand many executives in the home-building sector are dumping their company stock at a record rate. Over the past ten months, insider selling has reached peak levels at 8 of 12 large publicly traded home-building companies, according to Richard Bernstein, chief U.S. strategist for Merrell Lynch. And that's despite the fact that most Wall Street analysts have "buy" recommendations on those shares. One thing to consider, though, is that within a year of the Internet's bubble bursting in 2000, there was record net insider selling at 14 of 20 large tech firms according to Bernstein. Hmmm.