PPT in Effect today?

Discussion in 'Trading' started by tatertrader, Jul 15, 2002.

  1. Any evidence or sneaking suspicions that the Plunge Protection Team stepped in to avoid a nasty sell off today?

    The political aspects are intriguing, but I'm more interested in the economic ramification of potential market manipulation.

  2. What is the plunge protection team? Is it the fed pumping money into the market?
  3. http://www.elitetrader.com/vb/showthread.php?s=&threadid=6587&highlight=plunge+protection


    The Washington Post acknowledged the existence of a select group of four who could and would intervene in markets to prevent massive capital flight and a run on shares that would cause an economic collapse if there weren’t enough cash to pay out during a massive sell off. In his Feb. 23, 1997 story headed “Plunge Protection Team,” Post reporter Brett Fromson identified the Federal Reserve chairman, the Securities and Exchange Commission chairman, the chairman of the Commodities Futures Trading Commission, and the secretary of the Treasury as the team’s key players. The intervention of the team in the 1998 crash of Long Term Capital Management, after it became wildly overexposed in the gold market, revealed that private institutions such as Goldman Sachs, J.P. Morgan, Merrill Lynch and other major banks could be involved as well.

    Fromson quoted a former team member as saying, “In a crisis, a lot of deference is paid to the Fed. They are the only ones with any money.” Or, I might add, the ability to print it.

    Pointing to the 1987 stock market crash, the single largest crash in history, Fromson observed, “The Fed kept the markets going by flooding the banking system with reserves and stating publicly that it was ready to extend loans to important financial institutions, if needed.”

    On April 5, 2000 New York Post reporter John Crudele reported that the stock market had turned back from the abyss. After a 500-point drop that looked like it was leading to a meltdown, someone started buying large amounts of stock index futures contracts through two major brokerage firms -- Goldman Sachs and Merrill Lynch. Unless the brokers tell, there is no way of knowing which of their clients were making the purchases. Then the market rebounded.”

    Calling it the PPT, Crudele both referred to the 1997 Washington Post story and suggested that private banks were acting as team captains.

    From a fun read:

  4. lundy


    do technical traders rationalize their losses with news, fundamentals, conspiracies?

    lets play the blame game.

    market makers
    feralous fed
    bush team
    window dressing
  5. dis


    I loaded up with DIA's and QQQ's near the bottom with an intent to flip 'em tomorrow before lunch. Thanks PPT!
  6. I didn't lose a penny.

    Shouldn't you be sending roses to the Whithouse about now?
  7. = bump for more thoughts on the PPT =
  8. i don't know of anything out of the ordinary today. maybe we will find out tommorrow.
  9. Although I am sure that the Fed/govt can jaw-bone the big players into keeping the markets orderly and can ensure adequate cash reserves to forestall a panic, I really doubt they can prop-up over-priced equities. The markets are just way too big and too liquid for governments to really effect long-term prices. Also, I can't see Greenspan, O'Neil, or Bush going before Congress trying to explain $100 billion or more in trading losses.

  10. I like intrigue but I think that there is no PPT. Either that or this one is broke.

    #10     Jul 22, 2002