From AlterNet’s Call it What it Is: Corruption: “In a functional democracy — one where lawmakers pursue the public interest — the stock prices of politically connected companies or industries shouldn’t be impacted by the changing fortunes of politicans with whom they’re cozy. But yesterday, Representative Henry Waxman (D-CA) wrested control of the influential House Energy and Commerce Committee from fellow Democrat John Dingell (MI), and auto stocks tanked on the news.”
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3 Comments
So that is the reason their stocks tanked and not that the have been mis-managed for a decade? So when GM’s stock fell like 90% in the past year it was because this guy got replaced this week?
So Obama’s love for alternative energy is a bad thing then?
We’re talking about short-term loss here, not a five year trend.
The announcement came around noon-time on Nov. 20th, and right about that time, all three stocks took a pretty big dip. All three of them have come up a bit since then, but the gist of the writer’s point remains valid. The market sold immediately following the news of Dingell’s loss.
The volume of Daimler shares traded in the hour following the announcement went from roughly 2k to 16k; for GM, it went from 250k to 539k; and for Ford, it went from 454k to 2831k (this same period followed the announcement of a management shakeup at Ford, so that’s why there was such a huge increase of trades for Ford).
Anyway, point being: the market responded to the news of the Dingell loss because it actually has a bearing on the future state of these companies.
And that’s why the Waxman win is important. We now have a chairman of Energy & Commerce who is committed to combating global warming, and not to increasing the bank accounts of the executive of the Big Three.
Any news that involves the auto industry moves the volume of shares traded, it does not prove anything to be true. It might prove what some people(sellers)to believe to be true. IF the shares rebounded would that mean Waxman is also “in the auto industry’s pocket”?
At this point in time it does not take much to spook people into selling shares of companies that are a private jet ride from filing chapter 11