Mercury Rising 鳯女

Politics, life, and other things that matter

Booming and Busting Venezuelan Stocks

Posted by Charles II on February 13, 2007

In the fin de siecle madness that ended in the Crash of 1929, one of the features was price manipulation of stocks by the spreading of false rumors. This enticed small investors to buy stocks, “booming” them or, alternatively sell them to “bust” the stock. Big investors raked in the chips.

I think the same is happening in Venezuela.

 cantv.GIF

The above is a chart from the NYSE of VNT, the American-traded version of CANTV, which is the Venezuelan telephone company. That company is alleged to have wiretapped Chavez at the behest of the United States. Hugo Chavez recently announced that he would nationalize the stock. The press immediately went into overdrive to portray this as a seizure. In fact, he is paying market price.

Note the price crash and its rapid subsequent rise as what I speculate are large investors scoop it up at bargain prices.  Including, I would bet, a bunch of financial journalists who spread the panic.

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