Ladies and Gentlemen…
Behold…
The one and only stock market in the world which practices price fixing with impunity….
Successive losses for the past few weeks have most likely infuriated the index managers. It has derailed their plans for a new record. And the farther the PSEi goes astray, the less likely their objectives would achieved. Hence, something must be done…soon and fast.
And that something entails that the most expensive stock market in Asia has to be manipulated higher. Expensive will become even MORE expensive. But for the consensus, expensive doesn’t really matter. Valuations should be ignored. Stocks have been presented as about a numbers game ONLY. And as a numbers game, it becomes not only an object for chronic gambling, but more importantly, this has been imbued with a political function—the projection of economic progress.
So the index has to be fixed to portray economic advances. In essence, the Philippine stock markets have been politicized. And having been politicized it has lost its functionality as a mechanism for efficient asset allocation through price discovery.
Worst, manipulation for the purpose of projecting a political economic feat represents artificiality.
Today’s actions only reinforce my perspective that HISTORY is in the making. And by history, this translates to a decisive watershed…a breaking point. Yet markets are a process.
With the PSEi suffering another round of loss, an afternoon delight pump went into operation. It succeeded. Such coordinated actions buoyed the PSEi back ito green by the late afternoon. And at the last second of the official or regular trading session, just prior to the runoff period, the PSEi was up 45.14 points or .6% (upper left).
After the market intervention phase, when the runoff period opened, the Phisix zoomed by a SHOCKING 2.15% or by 162.41 points!!!!
Marking the close delivered a staggering 117.27 points on top of the 45.14 to arrive at the day's 162.41 gains!!!
In terms of %, from .6%, the end session pump provided a huge additional 1.55% for the day’s 2.15%!!!! That’s 2.58 TIMES (1.55 divided by .6) the contribution of the regular session’s gains!!!!
Awesome in magnitude!
What cannot be accomplished through the pricing process must be attained through price fixing!
And this must be ONE of (if NOT) the LARGEST ever pump!
It was a hideous pump on a low volume day. The difference from the above volume was about Php 2 billion. Albeit not all of the difference was allocated on the pump, perhaps about half or Php 1 billion. Who has access to so much money to push the index to the sky??? Let me guess, either depositors money or taxpayer money.
Such price fixing activities have not been about profit and losses, but rather to project a STATEMENT. A political statement no less. Hence, the focus on the massive (if not RECORD) push on the headline index.
With the exception of services, all mainstream sectors participated in the pump. Index managers had to ensure of the fulfilment of the day's operation, hence the broad actions (channelled via the biggest market caps).
Of course again, to achieve such kind of magnified effect means that the pump had to center on the biggest market caps.
Th numbers above have simply been breathtaking: 2%, 2.3%, 3.13%, 3.5%, 3.8% and 4.15%!!! All in a difference from a second (end of the trading session and opening of the runoff period--technically 6 minutes of price float)!
Some may believe that all these may mean little to market activities. Unless one appreciates how markets operate, the fact that prices have to be fixed means that the price function of the stock market has been structurally deformed or grotesquely distorted.
It is a MANIFESTATION of a BUBBLE.
Finally as a reminder, marking the close is considered illegitimate in the context of the Philippine government's edicts; specifically the SEC'
But who cares about stipulated regulations when it benefits the establishment?
And this likewise shows why when the cost of deception is low, deception blooms. And that beneath such charade are the likely fraud, swindles (Kindleberger) and embezzlements (Galbraith) which accompanies market tops.
Oh by the way, these are signs why a final BW-SSO move can occur. Out of desperation, today's move can be replicated until the cabal either break ranks or runs out of money.
And this shows too why charts are hardly reliable metrics. Charts implicitly stand on Efficient Market Hypothesis EMH. Charts ignore MANIPULATION. In the case above, rather than prices reflecting on investors' information, manipulators MAKE the chart.
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