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View Full Version : Revisit,Juicing the stock market; the secret maneuverings of the P P T



Tylerdurden
10-14-2008, 05:14 PM
Mar 5, 2007, 01:33

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The Working Group on Financial Markets, also know as the Plunge Protection Team, was created by Ronald Reagan to prevent a repeat of the Wall Street meltdown of October 1987. Its members include the secretary of the Treasury, the chairman of the Federal Reserve, the chairman of the SEC and the chairman of the Commodity Futures Trading Commission.
Recently, the team has been on high alert given the increased volatility of the markets and what Treasury Secretary Henry Paulson calls “the systemic risk posed by hedge funds and derivatives.”
Last Tuesday’s 416-point drop in the stock market has sent tremors through global systems. An 8 percent freefall on the Chinese stock exchange triggered a massive equities sell-off which continued sporadically throughout the week. The sudden shift in sentiment, from bull to bear, has drawn more attention to deeply rooted “systemic” problems in the US economy. US manufacturing is already in recession, the dollar continues to weaken, consumer spending is flat, and the sub-prime market in real estate has begun to nosedive. These have all contributed to the markets’ erratic behavior and created the likelihood that the Plunge Protection Team may be stealthily intervening behind the scenes.
According to John Crudele of the New York Post, the Plunge Protection Team’s (PPT) modus operandi was revealed by a former member of the Federal Reserve Board, Robert Heller. Heller said that disasters could be mitigated by “buying market averages in the futures market, thus stabilizing the market as a whole.” This appears to be the strategy that has been used.
Former-Clinton advisor, George Stephanopoulos, verified the existence of The Plunge Protection Team (as well as its methods) in an appearance on Good Morning America on Sept 17, 2000. Stephanopoulos said, “Well, what I wanted to talk about for a few minutes is the various efforts that are going on in public and behind the scenes by the Fed and other government officials to guard against a free-fall in the markets. . . . perhaps the most important the Fed in 1989 created what is called the Plunge Protection Team, which is the Federal Reserve, big major banks, representatives of the New York Stock Exchange and the other exchanges and they have been meeting informally so far, and they have a kind of an informal agreement among major banks to come in and start to buy stock if there appears to be a problem. They have in the past acted more formally . . . I don’t know if you remember but in 1998, there was a crisis called the Long term Capital Crisis. It was a major currency trader and there was a global currency crisis. And they, with the guidance of the Fed, all of the banks got together when it started to collapse and propped up the currency markets. And, they have plans in place to consider that if the markets start to fall.”
Stephanopoulos’ comments have never been officially denied. In fact, as Ambrose Evans-Pritchard of the U.K. Telegraph notes, Secretary of the Treasury Henry Paulson has called for the PPT to meet with greater frequency and set up “a command centre at the US Treasury that will track global markets and serve as an operations base in the next crisis. The top brass will meet every six weeks, combining the heads of Treasury, Federal Reserve, Securities and Exchange Commission (SEC), and key exchanges.”
This suggests that the PPT may have been deeply involved in last Wednesday’s “miraculous” stock market rebound from Tuesday’s losses. There was no apparent reason for the market to suddenly “go positive” following a ruinous day that shook investor confidence around the world. The editors of the New York Times summarized the feelings of many market-watchers who were baffled by this odd recovery: “The torrent of bad news on housing is only worsening, with a report yesterday that new home sales for January had their steepest slide in 13 years . . . Manufacturing has already slipped into a recession, with activity contracting in two of the last three months. How is it then that investors took Mr. Bernanke’s words as a ‘buy’ signal?”
How indeed, unless other forces were operating secretly behind the scenes?
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