Smoke and Mirrors in the Market Today
Step 1. The SEC allows CYNK Technology – a fake, yes fake, social media company that became to be valued between $4-6b and had a rise of 25,000% over the last couple years, to trade with no thought, no investigation, and an obvious caveat emptor attitude towards investors. Wait, what is their job again? Guess Martha Stewart was busy being good, and that pulled their focus.
Step 2. Some business journalists went on various quests to find out what was going on with CYNK. They struggled to find owners, workers, offices, work product, etc. – but only extremely suspicious activity was found – as in no workers found, office address empty, disconnected phones, etc. I kept reading the reports and got the feeling I was reading the script for a bad episode of Lost. A whole company just disappeared, along with their sole employee.
Step 3. This is all reported. Then, and ONLY then, does the SEC get involved and suspend trading to investigate.
Step 4. Yellen (partly in a lame attempt IMO to cover the SEC’s behind) announces that social media stock, biotech stock, and small caps are overvalued this morning. Some of them probably are, but lumping them all together? Really? Quick, someone shut the barn door – most of horses are out!
Step 5. All of those stocks start jumping off the cliff, like lemmings, while she is talking. This time it felt a little like a possible scene from The Wolf of Wall Street that ended up on the cutting room floor. Did she need a pullback – did she have some stock to buy?
Step 6. Yellen finally stops the noise – I mean, talking. Within two hours, the mini bear market she appears to have caused, begins to recover. All the lemmings climb back up the cliff. Some don’t quite make it – today.
Conclusion: More proof that this administration is all about control, smoke and mirrors and pass the buck.
Just like the CYNK stock!
Don’t worry, though, it’s all just noise!
Note: I never bought CYNK stock, nor do I know anyone who did. I only buy stock of companies that I know actually exist. Just call me old fashioned.
No actual lemmings were hurt in the market today to the best of my knowledge.