Signs of the ‘Bezzle’: Wow! Incensed Fixers Pumped a SHOCKING (Record) .93% to Keep PSEi 7,800 Intact!!!!

Ladies and Gentlemen, may I present…RAGE as expressed in the stock market!

 

Selling pressure dominated the entire session in a seeming carbon copy of yesterday. 

The difference was in the degree of response at the closing bell. Yesterday’s marking the close of 59.55 points chopped down the day’s loss from 1.4% to just .64%. Today’s action eclipsed yesterday: a mindboggling (perhaps a record) 72.74 points or the near elimination of the total loss of 1.03% to just a marginal .1% deficit due to an astounding .93% pump!!!!

This was a sign of a massive hissy fit that had overwhelmed the index managers from two successive days of selling.

So incensed index managers wanted to deliver this message in clarion: We will NOT LET THE PHISIX FALL BELOW 7,750!!!!

One may add: We will DO WHATEVER IT TAKES to send the PSEi back to record highs! All those whom have sold will REGRET!

Rage. Fury. All wrapped in a statement ventilated by a ferocious .93% pump!

And here’s more. In two days a total of 132.39 points or a stupefying 1.7% pump from last Friday’s close of 7,845.49 had been used to shore up the index.

I’m certain that the two day pump has etched a record.

Peso volume difference from yesterday’s 59.55 points pump was Php 2.4 billion (volume variance between regular session and closing). Or a big chunk of yesterday’s pump came was financed by Php 2.4 billion

Today’s record or quasi record was a humongous Php 5.54 billion (Php 12.95 billion minus Php 7.41 billion)!

I’m quite sure lots of third party money are being funneled to take unnecessary risk just to attain symbolical gains.

What cannot be established through regular pricing MUST be attained through price fixing!

Yet such kind of intensive engineered pumps tells us why a BW-SSO blowoff episode can happen! 

It has been already happening intraday!

ALL major sectors participated on this D-Day operations!

 

Look at the staggering price leaps that turned lead into gold (red to green right rectangles)!

To explain some of the biggest movers

SMPH was pumped by a gigantic 4.75% (biggest pump was in December 2015 at 8%) to deliver a fantastic 2.93% return for the day!!!! So from a depth of -1.83% to +2.93%!!! Flabbergasting!

JGS was inflated by a grand 2.9% to end the day up by another remarkable 1.3%!

BDO and SM had been propped up by colossal 2.7% and 1.04% to post 2.05% gain while the latter’s losses were trimmed to 1.02% from 2.06%

Sy owned companies have been favorites of manipulators. Has such actions been meant to implicitly keep the owners' at top spot at the Forbes Philippine richest?

 

The PSEi could have turned positive, but these issues were “dumped”. These virtually spoiled the party or the objective of a total reversal for the day.

Because bidders were much organised, minority dumps were essentially suppressed.

[Perhaps part of this may also be due to window dressing]

Yes stock market's marking the close spikes ONLY IN THE PHILIPPINES! 

This also shows that when the cost of gaming the markets are low, then manipulation flourishes.

Deception, fraud and unscrupulous activities accompany all major market tops [Kindleberger’s sauve qui peut (save himself who can)]. 

Great examples: Enron in 2000, Madoff and US rating agency-investment bank collusion in 2008 and the “bezzle” or embezzlement according to economist John Galbraith in 1929, from Chapter VIII “The Great Crash 1929” (source)

“In many ways the effect of the crash on embezzlement was more significant than on suicide. To the economist embezzlement is the most interesting of crimes. Alone among the various forms of larceny it has a time parameter. Weeks, months or years may elapse between the commission of the crime and its discovery. (This is a period, incidentally, when the embezzler has his gain and the man who has been embezzled, oddly enough, feels no loss. There is a net increase in psychic wealth.) At any given time there exists an inventory of undiscovered embezzlement in – or more precisely not in – the country’s business and banks. This inventory – it should perhaps be called the bezzle – amounts at any moment to many millions of dollars. It also varies in size with the business cycle. In good times people are relaxed, trusting, and money is plentiful. But even though money is plentiful, there are always many people who need more. Under these circumstances the rate of embezzlement grows, the rate of discovery falls off, and the bezzle increases rapidly. In depression all this is reversed. Money is watched with a narrow, suspicious eye. The man who handles it is assumed to be dishonest until he proves himself otherwise. Audits are penetrating and meticulous. Commercial morality is enormously improved. The bezzle shrinks.”

These massive pumps are likely symptoms of the “bezzle” operating underneath.

PSEi 7,800 Falls; Defense of Maginot Line Spurred a STAGGERING .8% Marking the Close Pump!!!!!!!!!!!

Increasingly desperate times calls for increasingly desperate measures

With sustained declines, the pressure to keep the Phisix within spitting distance from the Maginot 8,000 line seems to be mounting. Since each declines translates to the widening of distance from the recent highs, then this calls for the intensifying use of marking the close to buoy the index.

 

Interestingly, the Philippine Stock Exchange was under heavy selling pressure the entire day.

Nevertheless, regular price fixing actions went in operations. An afternoon delight pump was attempted (light blue downward arrow on Bloomberg’s intraday chart) at post lunch recess.  Curiously, it was foiled.

So up to the last 2 minutes the PSEi was down by a huge 1.6% but was pumped to 1.4% about a minute (upper left) prior to the market intervention phase. A new modus has been in operation. This involves a last minute pre-market intervention pump to amplify the momentum on marking the close thrust. This looks like an abbreviated afternoon delight but implemented at the (one to two) last minute/s.

This also could have been meant to reduce the scale of marking the close.  I discovered this only last week. Perhaps a cheaper means to attain the objective.

Nevertheless, at the runoff period, the deficit of 110.11 points was chopped by an incredible 59.55 points or more than half or 54%! This sent the Phisix down by 50.56 points or .64% at the close! Juxtaposed in the above are the images of the PSEi at the market intervention phase and at the close.

As shown above, the marking the close pump of 59.55 points was even LARGER than the 50.56 points deficit at the close! That’s the magnitude of the pump used to save the 7,700-7,750 level. The PSEi hit a low of 7,719

Last week, the degree of price fixing involved an average of 22 points per session. Today this has more than doubled!

ONLY IN THE PHILIPPINES!

Again understand that to push the index requires a coordinated and synchronized pump on several market cap heavyweights—mostly from the top 10 of the index.

The effects of which can be seen first from the sectoral performance.

 

With the exception of the services, all four mainstream sectors were beneficiaries of the frantic pumping. 

Now detailed into particular issues, here are the eyepopping numbers.

Largest market cap SM soared 2.3% to end the day down by only .43%! This means SM was down by as much as 2.73% just a second prior to the intervention phase.

With Newton’s Law’s hounding JGS, the issue spiked 2%, which reduced losses to only 1.28%. This means that the pre marking the close losses totaled a considerable 3.28% for JGS!!!!

Metrobank closed down .91%. But this has been alleviated by a 1.34% pump which implied for a 2.25% deficit prior to the closing numbers!

47% of URC’s 3.83% spike was due to the 1.8% marking the close!

SMPH closed unchanged today. But it was down by 1.4%, a second prior to the transition to the runoff period!

Shocking numbers all intended to pump the index

What couldn’t be done in regular session had to be manipulated at the close!

All actions have consequences. Not only has these severely inflated valuations of individual issues and the index, such compounds on distortion or in the fundamental function of the stock market as a discounting mechanism through price discovery.

The end result from the above is the continuing buildup of imbalances or enlarged detachment between fundamentals and prices, and their non stock market ramifications—e.g. inflated collateral values (for credit and M&A functions) and more

Yet the greater the imbalances the larger the probability for a violent market clearing process.

In short, the obverse side of every artificial credit financed boom is a calamitous bust

Bonus chart: Will China's SSEC serve as a template for the PSEi?