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

Tyler Durden's picture




 

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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Mon, 10/19/2009 - 12:17 | 103421 Hondo
Hondo's picture

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.

.

Mon, 10/19/2009 - 14:31 | 103579 Anonymous
Anonymous's picture

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.

Mon, 10/19/2009 - 12:22 | 103428 Michael
Michael's picture

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.

Mon, 10/19/2009 - 12:39 | 103455 Rainman
Rainman's picture

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

Mon, 10/19/2009 - 12:49 | 103465 Anonymous
Anonymous's picture

AIG = All In Gamble

Mon, 10/19/2009 - 12:58 | 103474 Anonymous
Anonymous's picture

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 ]

Mon, 10/19/2009 - 13:12 | 103492 Daedal
Daedal's picture

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

Mon, 10/19/2009 - 13:25 | 103500 Anonymous
Anonymous's picture

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-worthles...

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

Mon, 10/19/2009 - 13:37 | 103510 Anal_yst
Anal_yst's picture

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

Mon, 10/19/2009 - 13:41 | 103512 Margin Call
Margin Call's picture

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.    

Mon, 10/19/2009 - 13:44 | 103516 virgilcaine
virgilcaine's picture

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

I call this the 'echo bubble".

Mon, 10/19/2009 - 14:06 | 103546 Rainman
Rainman's picture

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

Dow 7200 anyone ??

Mon, 10/19/2009 - 13:51 | 103524 orca
orca's picture

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

Mon, 10/19/2009 - 14:11 | 103555 Anonymous
Anonymous's picture

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

Mon, 10/19/2009 - 14:15 | 103563 Hephasteus
Hephasteus's picture

I heard 4 out 5 top psychics recommend AIG.

Wed, 01/20/2010 - 04:24 | 199129 Anonymous
Anonymous's picture

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.

Mon, 10/19/2009 - 20:03 | 103894 peterr (not verified)
peterr's picture

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

Wed, 01/20/2010 - 04:21 | 199127 Anonymous
Anonymous's picture

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?

Sat, 05/21/2011 - 00:43 | 1297610 kummar
kummar's picture

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

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