It’s been pretty widely reported recently that an unusually large percentage of the daily NYSE volume was the result of trading in just five highly speculative stocks namely Fannie Mae (FNM), Freddie Mac (FRE), Citigroup (C), Bank of America (BAC), and AIG.
To better visualize this I have plotted the combined daily trading volume of these stocks as a percentage of the total NYSE daily volume going back to 2001.
As you can see from the chart below (click for super-dynamic zoom-able version) the reports are accurate.
In fact, the latest results show that these five “junk stocks” account for over 18% of all daily trading volume on the NYSE and have recently accounted for as much as 40%.
Is this a sign of strength or speculation?
I suppose to answer that question one might ponder the fact that Fannie and Freddie are both failed government shams that are essentially insolvent and likely to be closed down and rolled by the creeps in Washington into some new farce while Citibank and Bank of America are likely only living by the good graces of the mark-to-“make believe” swindle… AIG… it’s just a plain old fashioned failure that’s being propped up by you and me.