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AIG Is Casino Hot Potato Darling With 806% Monthly Turnover Ratio

Tyler Durden's picture
Submitted by Tyler Durden on 10/19/2009 11:13 -0500



Nomura has released a report highlighting the stocks with the greatest monthly turnover ratio (the ratio of trading value to market cap). And while overall turnover ratio has increased materially in the US, while not so much in other markets, once again making the case that US stock markets have become an exclusive hot potato gambling center, the monthly turnover of some stocks is staggering:

  • AIG: 806%
  • Las Vegas Sands: 172%
  • Citigroup: 69%
  • Apple: 38.2%
  • GE: 24%
  • JPMorgan: 18%

The full list of high turnover stocks presented below:

The overall increase in high turnover is not just limited to smaller cap stocks (or in the case of AIG, nationalized entities). Compare the turnover of US stocks to all other names in the world: the casino nature of US stock markets is undeniable.

Another way to visualize the discrepancy between the US and the rest of the world is in the below chart. Even though US stocks have halved their turnover ratio from a staggering 40% in November 2008, the current reading of 21% is still roughly double the 12% average for European, Japanese and Chinese stocks.

As the game of domestic stocks hot potato continues unabated, the only real question is what will the event be to force sellers to finally emerge. However as Nic Lenoir warned earlier don't expect any such action on continuing low volume days like today, where the only relevant trade is ongoing pummelling of the dollar driving stocks grotesquely higher as the US middle class continues to lose purchasing power. One hopes that everyone now has an E-trade account and all they do each and every day is invest in highly overvalued stocks which they in turn hope to pass to yet another greater fool.

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by Hondo
on Mon, 10/19/2009 - 11:17
#103421

And all the while the Fed and regulators allow this to happen.  The US has no investable markets....all they have is gambling parlors that the government has created and condoned.  You have to be insane to actually “invest” in the US markets.

.

by Anonymous
on Mon, 10/19/2009 - 13:31
#103579

The casino-nature of U.S. financial markets creates a very favorable environment for true investors. These quick fluctuations create attractive opportunities as markets can diverge greatly from fair values. As "investors" we should welcome these gambling fools into the marketplace.

by Michael
on Mon, 10/19/2009 - 11:22
#103428

We the People did not establish our form of government so that the people who work for us could get filthy stinking rich off of us.

by Rainman
on Mon, 10/19/2009 - 11:39
#103455

Looks like the old buy and hold rule went the way of the telephone booth.

by Anonymous
on Mon, 10/19/2009 - 11:49
#103465

AIG = All In Gamble

by Anonymous
on Mon, 10/19/2009 - 11:58
#103474

That volume/turnover is one side effect of HFT...

[ I'm about to close two short positions at great loss, so a market rollover is just around the corner ]

by Daedal
on Mon, 10/19/2009 - 12:12
#103492

If we didn't have this turnover, stock market would've been up >100% with the level of bullish sentiment going around.

by Anonymous
on Mon, 10/19/2009 - 12:25
#103500

KBW analysts led by Bose George downgraded shares of Fannie Mae (FNM 1.21, -0.25, -17.12%) and Freddie (FRE 1.41, -0.31, -18.02%) to underperform from market perform and cut their price target on both stocks to zero from $1.

http://www.marketwatch.com/story/kbw-says-fannie-freddie-shares-worthless-2009-10-19?siteid=yhoof

AIG (-4%), Fannie Mae (FNM) (-17%+), Freddie Mac (FRE) (-16%+) tanking quietly...shhh...

by Anal_yst
on Mon, 10/19/2009 - 12:37
#103510

3+ seconds for google, a lil long, no?

by Margin Call
on Mon, 10/19/2009 - 12:41
#103512

Not surprising, simply an indicator that the US is furthest ahead in the casino financialization of its economy. Those foreign troglodytes still do laughably archaic things like, you know, produce physically tangible goods. At the onset of this crisis I, like many others, erroneously believed that the meltdown would "rein in" an unhealthy American economic dependence on financial services. Instead, it actually made things worse by wiping away the last remnants of the tangible productive economy. Finance is now the economy, and I don't see much coming out of Washington that tells me those in charge see anything fundamentally wrong with this. In fact, a scary amount of capital (political, financial, social and otherwise) is being blown to make sure the rotting financial services bloat doesn't wither away as it should. And as a result, there is one thing the US is now arguably the global leader of once again: paper production.    

by virgilcaine
on Mon, 10/19/2009 - 12:44
#103516

This feels like the 1999 Dot Com bubble &  Will probably end as badly.

I call this the 'echo bubble".

by Rainman
on Mon, 10/19/2009 - 13:06
#103546

And let us not forget that NASDAQ is still about 50% below its all time high after all these years.

Dow 7200 anyone ??

by orca
on Mon, 10/19/2009 - 12:51
#103524

Is it possible that the reverse stock split on AIG accounts for the bizarre 806%? (ht dikker)

by Anonymous
on Mon, 10/19/2009 - 13:11
#103555

Isn't this contradictory to the fact that there are low trading volume days on many days ? Or may be I am interpreting this wrong.. Can somebody explain ?

S

by Hephasteus
on Mon, 10/19/2009 - 13:15
#103563

I heard 4 out 5 top psychics recommend AIG.

by Anonymous
on Wed, 01/20/2010 - 03:24
#199129

Are you really trying to say that these psychics are saying that AIG will survive and continue to be successful they way they were in 2000? Let me know what you have to say, please. My e-mail address is arumsey2b@live.com.

by peterr (not verified)
on Mon, 10/19/2009 - 19:03
#103894

The added liquidity will only prolong their bankruptcy for another 6-9 months at best.

The consumer isn't coming back.

Goldman and Bank of Amerika run the markets along with Geithner, and beagle boy Ben. There is no free markets, only welfare capitalism and socialism for capitalism.

good articles; good articles 4 slow news day ..http://www..
hat tip: finance news

by Anonymous
on Wed, 01/20/2010 - 03:21
#199127

So you're telling me that 4 out of 5 psychics say or predict that AIG will recover and grow scuccessful the way it was in year 2000?

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