The Mind Blowing (RECORD) Pump to PSEi 7,800: No Market Manipulation? Today’s Marking the Close Was 2.58 TIMES Pre Runoff Gains!!!!

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's SRC and the BSP's AMLA. 

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.

Upping the Ante of Geopolitical Blackmail: Duterte Tells US Government: Time for You to Leave!

Last weekend I wrote,

The administration seems to be applying a tacit blackmail stratagem at the US: “if you push hard on my war on drugs, then we will shift allegiance to China!”

It’s not tacit anymore.

From today’s headlines (Inquirer):

PRESIDENT Duterte said on Monday he wanted U.S. forces out of his country’s south and blamed America for the restiveness of Muslim militants in the region, marking the first time he publicly opposed the presence of American troops in the country.

Duterte has had an uneasy relationship with the U.S. since becoming president in June and has been openly critical of American security policies. As a candidate, he declared he would chart a foreign policy that would not depend on America, his country’s treaty ally.

The U.S. military in 2002 deployed troops to train, advise and provide intelligence and weapons to Filipino troops battling the al-Qaida-linked Abu Sayyaf militants in the southern Philippines. When the American forces withdrew in February last year, U.S. officials said a smaller contingent of U.S. military advisers would stay. Details of the current U.S. military presence in the south were not immediately available.

Duterte did not mention any deadline or say how he intends to pursue his wishes. The U.S. Embassy did not immediately issue any reaction.

(bold mine)

I’m all for “independent foreign policy” and “non intervention”, but then again that’s not the real issue. It’s a smokescreen. The main issue has been the ochlocratic ad hominem (path to dictatorship) politics that has now been reinforced through “geopolitical blackmail”.

Actions have consequences.

In the same weekend note I observed: “much will now depend on the feedback mechanism between the parties involved as with those associated with them.”

If the Philippine government makes real of the threat to undermine the interests of the shadow but powerful and highly influential political forces behind Washington—the neo-conservative and military industrial complex—then potential responses or repercussions may have already been set in motion. To repeat:

 -This would eventually prompt US rating agencies credit downgrades—especially if US military interests are compromised.

-This would reduce investment and portfolio flows from US and allied nations.

-Credit flows will likely ebb too, thereby putting pressure on access to international credit markets and thereby tightening financing conditions. This will be baneful to a leftist government with a penchant for political spending profligacy: social spending (welfare state), bureaucracy, infrastructure, and most importantly, the military institution.

 The reduced access to credit and fund flows will likely accelerate on the unraveling of the mounting economic and financial imbalances inherited by this government from the previous two regimes.

-The Philippine government will be alone to deal with territorial disputes. (This should be a good thing if only the Philippines government’s response would be to increase trade rather than through brinkmanship politics)

-Finally, it would be a lot cheaper or cost effective for the US government to engage in covert operations to influence the domestic political environment than to pullout from the country. The US government may surreptitiously work to offset whatever leverage the administration has been building to countermand the US government’s influences in the country. The US government has been no stranger to the financing, influencing and orchestrating destabilization to regimes it perceives as hostile to its interests. Operation Gladio should be stark reminder.

Unpredictable behavior?

Leftist governments virtually operate on the same set of actions

Has Phisix Peso Correlation Been Resurrected?

The local currency, the peso, it seems had partly been plagued by the fallout from last week’s geopolitical ruckus.

 

The Philippine peso and the Thai baht (-.75%) were the biggest losing currencies for the region this week.

The USD php rallied by a substantial 1.16% to 47.16 from last week’s 46.62.

In two weeks, the USD php rose by a hefty 1.73%. This week’s performance neutralized the previous year to date losses by the USD peso. As of Friday, the USD peso yielded .2%.

It would seem that the Phisix peso inverse correlation may have been resurrected.

In 2015 the correlation between the weak PSEi and the strong USD (weak peso) solidly played out for the entire cycle or from one inflection point (March April) to another inflection point (January 2016).

But after the turnaround in 2016 the correlation appears to have been broken. The PSEi soared by almost the same degree as with the 2014-2015 at only less than half the time from January through July. While the USD peso retrenched along with the initial surge by the PSEi, the USD peso stopped falling, began consolidating and ironically even rose along with the Phisix which raced to 8,102.

However since August the USD peso Phisix relationship appears to have been revitalized. 

 

Present dynamics has truly been interesting. That’s because of the contradictory numbers dished out by the government. The BSP declared that July GIRs have reached record highs. The irony has been that external debt appears to be rising along with GIRs. Besides, the BSP can’t seem to unload or unwind its FX derivatives which also have been adrift at near record levels. Has the BSP been stuffing its GIRs with even more borrowed or short ‘dollars’?

Has the BSP been puffing up its GIRs to portray G-R-O-W-T-H? If the answer is yes, then the peso will fall further. Add to these the coming explosive budget and trade deficits.