The secret maneuverings of the Plunge Protection Team

Discussion in 'Trading' started by S2007S, Mar 8, 2007.

  1. S2007S


    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 Hank 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 system. An 8% 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.

    Continued here:
  2. I wonder if they get a nod and a wink on their tax forms in exchange for backstopping a big sell off.
  3. Big difference between 3% and 30% in a day. They don't even get a hard on unless a couple of circuit breakers are hit.
  4. S2007S



    3% was very worrisome for these markets.

    When greed rules for so long, fear is forgotten.
  5. if we were to take the scattered accounts of the ppt's interventions at face value, using futures to support the market when short interest is highest... is it technically legal to artificially target and disadvantage the short side of the market to maximize the effect of the intervention?

    punishing the market's self corrective nature doesn't seem like a free market practice - or in anyone's long term interest. it might not even be legal
  6. ammo


    paulson on his 140 mil windfall from goldman sax,he mixed his profits from his forced sale of stockholdings tobecome non compromising in his new job with his huge bonus and paid no tax because he did it fir the job
  7. nkhoi

    nkhoi Moderator

    1)PPT is real.
    2)They will save the market.
    3)There is no better time to buy the dip.
  8. ===================
    Maybe 100% true, maybe that's reason CME has some interesting wide limits on ES downmoves- a matter of public knowledge.Its on thier website

    Its also a matter of public record, since 1987, some markets still have downmoves/bear trends, like QQQ[Q] going from $120 in March ,7 0r 8 years ago to $20 or $21 area, back to $45.45...

    Apparently PPT has discretion for some pretty wide stops???;
    thats more than 50% down:cool:
  9. achilles28


    If the market wants to tank, the ppt can't do much but temporarily stem the flow

    My 2 cents
  10. anybody who has traded these markets for a number oy years must reckonise the price action is staggering.

    massive points drops with bearish news everywhere and then a miraculous bounce with buying from nowhere.

    it staggers me the amount of time these markets bounce back in the face of extreme selling.

    the exchange stabilisation fund ( link below ) is the the official arm of the us treasury otherwise known as the plunge protection team.

    i firmly believe that the us treasury/fed will never let a repeat fall of the past ever happen again.

    there is too much at stake e.g. carry trade/ systemic risk / exchange failure.

    its too big too fail.

    i said this 5 five days ago and was poo-poohed by various posts and we are now 300 points higher in the down and 2 big figures higher on usdyen.

    am i surpised - no.
    #10     Mar 9, 2007