Stocks pronounced dead have ambient pulse

NEW YORK, Oct. 12 (UPI) -- Some of the U.S. firms that made headlines with massive meltdowns during the recession are piling up big numbers in a faux recovery, market investors said.

Shares of American International Group are up 41 percent from lows, but the value of the company is still diminished by huge federal bailout deals that must be repaid.

Shares values of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corp. have risen 88 percent and 134 percent, respectively, USA Today reported Monday. But these companies are also beholden to the government after huge losses pushed them into receivership.

"People are playing these as the next penny stocks," said Robert Maltbie of research firm Singular Research.

Even bankrupt Washington Mutual bank that appears on the lightly regulated Pink Sheets has seen its stocks rise 1,050 percent.

But it's easy to be wowed by large percentages on the value of penny stocks that are not hugely profitable, experts say.

"With stock prices so low, you have speculative buying," he said Christopher Whalen at Institutional Risk Analytics,

In the meantime, "it's not unusual for bankrupt things to flop on the floor of the boat for a while," he said.