Are We Witnessing Stock Market Manipulation?
Let me begin by stating that I am not a stock market guru. However, I do understand statistics and the discontent that aberrations bring to the table. I’ll provide the numbers, you can draw your own conclusions. I’ll also add in the conclusions of three experts on this matter if you are still not suspect.
Total daily market trading volume in the Stock Market is about 6 billion shares. Since July 20, more than 20 percent of this volume has been attributed to the trading of just four stocks: Bank of America (BAC), Citigroup (C), Fannie Mae (FNM), and Freddie Mac (FRE) Themis Trading. It gets even better. These four stocks, represent 40 percent of the trading volume in August, but account for only 2 percent of the markets overall value. The trading volume of these four stocks peaked on Monday, accounting for a whopping 26 percent of ALL STOCK MARKET TRADES that day alone.
Need I remind anyone that these four stocks conincidentally are government owned and the beneficiaries of TARP bailout funds.
Said article authors, Shaila Dani and Elizabeth Gramling (AP): “This kind of concentrated volume is not a sign of a healthy market. A true bull market is driven by strong company earnings in a growing economy.” Citing Joe Saluzzi of Themis Trading in the same article, “Long-term I think we are in for a world of hurt”.
Reuters and others are ruminating that day traders and speculators are the cause of this volume, calling it the “dash for trash.” Skyrocketing share prices are expected to tumble when the speculation dissipates.
Statistically speaking, these numbers are not possible unless purposeful. One can speculate on the coincidence that all four of these stocks are government controlled entities.
The punch line is that the fifth largest traded stock today was General Electric (GE). You know, the company who’s CEO Jeff Immelt is on Barack Obama’s Economic Advisory Board. The same company who was just fined 50 million dollars by the SEC for as they cited: “bending the accounting rules beyond the breaking point” and “GE misapplied the accounting rules to cast its financial results in a better light.”
Coincidences do happen. I’m wary about the ones that happen where our government is (over) involved.
Todd
ideapalooza
August 25, 2009
Blog note: The original article citing authors Dani and Gramling were found in the Naples Daily News Tuesday, August 25. Unfortunately, I could not find any internet links to the original AP article even with fervent effort.