Monday, October 06, 2008

Plunge Protection Team (once again) to the Rescue!

The DOW fell hard from opening today and the losses accumulated throughout the afternoon - at one point (~ 2:45pm) it was down 800 points and the meltdown was all but assured, but wait! Take note of the hand of God coming into the picture at ~ 2:50 - pulling the DOW back up over 400 points in the last hour of trading.

Free markets?
Absolute Bullshit!

These four malicious, lying, thieving bastards (Heads of The Plunge Protection Team), need to be crucified!

Treasury Secretary Paulson (Chairman of the PPT)

Ben Bernanke (Chairman of the Board, Federal Reserve System)

Christopher Cox (Chairman of the Securities and Exchange Commission)

Walter Lukken (Chairman of the Commodity Futures Trading Commission)

For those who don't know: The Plunge Protection Team (PPT) was created by Ronald Reagan back in 1988 through executive order 12631. The Working Group on Financial Markets, also known as the PPT was created to respond to events in the financial markets surrounding October 19, 1987 ('Black Monday'). They are chartered with providing recommendations for legislative and private sector solutions for "enhancing the integrity, efficiency, orderliness, and competitiveness of United States financial markets and maintaining investor confidence".

Former Federal Reserve Board member Robert Heller, in the Wall Street Journal, opined that "Instead of flooding the entire economy with liquidity, and thereby increasing the danger of inflation, the Fed could support the stock market directly by buying market averages in the futures market, thereby stabilizing the market as a whole."

Today however, they are both flooding the market with liquidity AND actively engaged in manipulating the entire market spectrum - using their game of charades in an attempt to game confidence in the markets - an abominable crime!

Remember Martha Stewart and her small-time mischievious "insider trading" - HA!

How about these guys DISTORTING THE ENTIRE US MARKETPLACE? - They should be locked up for LIFE!

WAKE UP PEOPLE! It's almost time to grab the pitch forks and march on Washington!

Signed - a very disgusted Randy


Anonymous said...

Randy, how do we know the rally in the market was due to the PPT? Not doubting your knowledge, just confused about how to tell the difference between a genuine rally and the actions of the PPT.
Thanks, LiberalLori

Randy said...


For one: I watch the markets nearly every day and the end-of-day PPT rally (for the past year or better) has become their standard MO after a significant market sell-off.

This morning, futures were in the tank before market open. In an attempt to assuage fears, Paulson came out with the announcement he was going to Double Cash Auctions to $900 Billion, May Do More

Upon realization (later in the day) that this announcement/action wasn't working as expected, all stops were pulled.

From Link above:

Oct. 6 (Bloomberg) -- The Federal Reserve will double its auctions of cash to banks to as much as $900 billion and is considering further steps to unfreeze short-term lending markets as the credit crunch deepens.

``It is pretty much all out war,'' said Christopher Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd., New York. ``They are pulling out all the stops to try and get borrowers and lenders to meet and do transactions once again.''

Treasury Secretary Henry Paulson is speaking with Bernanke and New York Fed President Timothy Geithner, along with financial-market participants, on market turmoil, Treasury spokeswoman Brookly McLaughlin said in Washington.

President George W. Bush's working group on financial markets, a body that includes the Fed, Treasury, Securities and Exchange Commission and Commodity Futures Trading Commission, said today it's working with ``market participants and regulators globally to address the current challenges to restore confidence and stability to financial markets.''

No, I don't have absolute proof they were behind the End of day 400+ point rally, but can you tell me one small tidbit of good news that could have caused it today?


I usually try to combine a keen eye with a little bit of common sense and tidbits of information to come to a rational conclusion.

It's not perfect, but it's usually enough to filter through the daily barrage of misinformation noise.

If you have a better reason for the closing rally, I'm all ears.


FOFOA said...

More evidence: I was watching CNBC at about 12:30 PDT. Maria Barfolomo was pointing out that the seller's volume was much higher than the buyers. In other words, there were many more people wanting to sell on the trading floor than buy. At that point the dow was down about 550. She said that what the board showed meant that it would likely drop down even more in the last half hour of trading. She was preparing us for what she thought was bad news coming up.

But it didn't go down! It went up 200 points!

The PPT was "painting the tape". Making a "good" closing so that today didn't go down in the record books. The day after the bailout. That's all.

They probably did it on two fronts. First, on the floor they don't let everyone sell that wants to sell. They spend more time pairing big buyers and sellers and let the clocks run out. Second, behind the scenes the PPT was likely putting in THOSE VERY BUY ORDERS.

So imagine what would have happened if the PPT hadn't stepped in! Oh, the evils of the free markets. Thank God for the man behind the curtain!

Black Star Ranch said...

Morning Gentlemen...
I thought I was the only one that saw "PPT" graffiti sprayed all over this "rally". I now am quite convinced this and MUCH MORE deceit is being perpetrated on the American citizen by our elected and appointed. Why would ANYONE put a dime in the stock market knowing this? It would be like betting on professional wrestling. Is it that people just ignore or try to overlook any "bad taste" in their mouth? Ron Paul's latest text stated the revised bailout (which grew from 700 to $850-billion with all the fluff)should have been originated in the House since it contained new taxes (according to The Constitution). Why aren't these points something the press exposes from the highest of rafters? Now, this morning, I read where The Treasury will directly bailout private businesses with short-term loans on either a no-collateral or asset backed situation? When you take away the fairy dust, what it means is the FedGov now can decide who they bail and who they don't bailout, what security is required, etc. What this means to me is the FedGov is now putting themselves in the position of nationalizing any and all companies they want to own or control. Am I wrong in this assessment?

I'm so mad I could SPIT! I think I'll go feed the cow....

Louisa said...

In my mind, that move yesterday was classic PPT. The powers that be have all but admitted they will do whatever it takes to keep things propped up. I also recall a quote from Easy Al Greenspan that the PPT would in fact buy stocks if that what was required to stabilize the system.
Japan,after their bubble burst in 1990, did the same thing. Japan bought stocks and tried to prop up the banks, etc just like we are trying to do, only they were up front about it.

They easiest way to gas the market if you were trying to pump it up is to start buying S&P futures. So that's what happened, and yesterday the futures started to take off for no reason that was at all apparent. This wasn't just a little move upward on rumor, but roman candle upward in the S&P futures. If you noticed a 24 chart on the S&P futures, you'll see that right after the U.S. market closed, the futures just had a cliff-like downward move again - like a bookend to the skyrocket upwards that propelled the rocket rally late in the trading day.

Well it is sure a spectacle to behold them trying to fill up all the holes in the damn.
But, as some have said before, nobody, including governments, is bigger than Mr. Market.

Dave said...

I agree with Randy. I saw the same thing and noted that it followed the same pattern I've seen before. Usually it's accompanied by an abrupt reversal in gold too, but not this time. I guess they had their hands full.

I never liked Martha Stewart, but her conviction was a travesty. I felt she was guilty of insider trading, but that's not what she was convicted of! She was convicted of the preposterous charge of "lying to investigators." Huh? Isn't that part and parcel of criminal behavior? Isn't it the job of the justice system to ferret out the truth? Obviously, somebody wanted to take her down for some reason.


Anonymous said...

Randy, I wasn't attacking you at fact when I saw the rally, I was also suspicious of PPT.

I was asking only because I myself don't know how to tell the difference between PPT action and a rally from people trying to buy bargains. I've noticed in the last few months (I never used to watch the stock markets at all) that every time there is a fall in the markets, there is always a rally either that day or the next day.

So I wondered if that was the PPT or if it was just the way markets always react.

Just trying to learn, honestly.

I wouldn't read your blog all the time if I disagreed with you at all.

Honestly I wasn't trying to get you mad or attack you! I'm just trying to learn more, to figure things out because it's confusing to me.


Anonymous said...

P.S. How are they buying all these stocks? Are they just printing money out of thin air? What do they do with all the stocks they buy?

It seems really bizarre to me that it's legal to have a team manipulating the markets like this. It ought to be illegal, that's what I think.

I really think it's going to come down now to just printing money out of thin air. I think our debt will be monetized, more money is going to go to Wall Street.

I'm a liberal mostly because I want something else besides what Bush and his administration have offered...I actually find myself agreeing with Ron Paul about a whole bunch of stuff.

Mostly I just want something else besides Bush. So for now I'm a liberal because liberal means, not Bush. I could just as happily vote for Ron Paul - again because he represents a different path from Bush.

I'm sorry I got you riled up. I probably didn't express myself well enough in the first post. I'm just trying to figure out when we can tell the PPT is at work. I just wanted to know so that I could recognize it on my own from now on.

Liberal Lori

Randy said...


No worries I didn't take it as an attack. Actually, I was frustrated w/Blogger. I had spent ~ 20 minutes typing up a good reply and blogger locked up on me, so I had to start all over again. Argh!

2nd reply (which wasn't nearly as good as the first) may have come across a bit brash but it was due to my blogger irritation.

my apologies


Anonymous said...

Thank you for replying, Randy! I appreciate your blog and all you do here. Our mainstream media isn't covering this stuff like they should, so these days our only reliable sources of information are blogs like yours.

It's so hard to tell emotion on the internet..I'm glad you weren't annoyed with me!

I wonder what will happen next with our economy? I'm actually scared. My husband rolls his eyes at me when I say I want to take some money out of the bank and just have it on hand. I've already stocked up on some food, enough for a month I think, so that made me feel better.

I honestly feel like just about anything could happen at this point. I feel we could have hyperinflation if they run the printing presses to try to bail out wall street, and right now we are seeing shrinking incomes and people who just aren't as wealthy as they once thought they were. So we are seeing a lot of signs that we are in a recession with worse to come.

I just feel very scared. And I'm not sure I trust our top leaders to be straight with us, to tell us what is really going on or what will happen.

I hope I'm just worrying over nothing, that nothing worse than a recession or stagflation like the 70's will happen.

Anyway, thanks again,


Some interesting posting economics wise.