Michael Gracie

They are calling it a ‘floor’:

Pakistan set a floor for stock prices on the benchmark exchange, moving to halt a plunge that has wiped out $36.9 billion of market value since April.

Securities can trade within their daily limit of 5 percent “but not below the floor-price level” of yesterday’s close, the exchange said on its Web site, without giving details.

Stocks can no longer go down - it’s the “No Loss Sale Rule“, and not so cleverly disguised. Imagine the order imbalance that would occur in a real marketplace!

Obviously a lot of people do, as do a lot of people’s brokers, who the people, in turn, listen to. And round and round we go.

From eWeek: The stock that bullish analysts on Wall Street said earlier this month was headed soon for $600 turned tail and fell below $400 as the shares suffered their worst day and week of trading since the Web search leader went public in August, 2004.

In just a week, poof! There goes $20 billion.

I was having dinner a few weeks back with an old friend, and the subject turned to the US economic situation. I’ve known this guy for roughly two decades and trust him like a brother; he is a very smart character who doesn’t pull punches. I was inclined to listen - the fact that he analyzes high-yield bonds for a big investment bank’s private client group certainly didn’t hurt his cause either.

I’ve believed that indebtedness at every level of our society, from federal, state and local government, right down to consumers’ credit cards, home equity lines and first mortgages, has reached epic proportions. But when this fellow said he thought we were headed for another depression, my sceptical nature reared its ugly head. I have a predilection for looking at the downside, as I started my career in restructuring situations, but I relish that downside for its opportunity and I also know that nobody likes a doomsayer. It wasn’t until I read about our nation’s savings rate hitting zero that I began to rethink his claim.
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It is all about the money. And of course, the distribution. We know phishers chase the cold hard cash, so why shouldn’t their slightly less sneaking pure-spam brethren?

You have mortgages, pharma and porn as the norm, but what was once a big deal coming across the fax, is growing again in popularity across the web. Yes, spam-based stock scams are again on the rise.

Could this be a new leading indicator that the stock market is headed north once again?