Debate on the Existence of Plunge Protection Team
From an anonymous trader/investor:
CNBC Video Clip Denying Existence of Plunge Protection Team (aka President’s Working Group on Financial Markets:
The link below contains the CNBC video clip and GATA discussion wherein the CNBC crew are AMAZED to learn about market intervention by the PPT of the S&P futures or that such a group and its activities even exists. MSM at its best in trying to suppress the truth.
Well, well, well … it’s early morning and a guest on CNBC’s Squawk Box blurted out in vociferous fashion about how The Working Group on Financial Markets, or the Plunge Protection Team, has been active in the S&P futures markets … most notably on October 10 and 24. He mentioned that late market action in which the S&P rose 100 points from low to high for no apparent reason, and that the US Government was in no mood to let the markets close for the weekend(s) in a near state of panic.
The guest, Scott Nations, President of Fortress Trading, refused to back down. Bet you won’t be seeing him back anytime soon.
>
UPDATE DECEMBER 10, 2008
BR adds: It turns out that Scott Nations has been a regular on Squawk for the past few weeks. So much for that theory.
November 19th, 2008 at 8:07 am
Get these conspiracy kooks to show who is doing this… what accounts? what are the volumes? who controls it? Memos? Where / when the securities are resold before they continue with their fictitious claims. Are the conspirators all Pisces and Saggitarians? …Love signs? Are their offices all odd-numbered?
Paranoid loon balls, susceptible to conspiracy suggestions. Take of the tin foil hat while you research it further, than get back to me.
November 19th, 2008 at 8:12 am
It’s hard to know who the members of the PPT would be at this stage, now that Mother Morgan and Granny Goldman are in sick bay and most of their competition is at death’s door or six feet under. Maybe that’s why we haven’t seen as much evidence of their existence. The market is so thin that a hedgie could sneeze and cause a 100 point move. Scott Nations always makes sense though and I bet he was having a laugh when he saw all the consternation he had caused.
The CNBC Muppet Show is amusing. Becky always seems like the girl at camp who reported the others who snuck into the boy’s tent to smoke dope and drink beer. Mind you she does seem to get quite hot for old Warren though. Perhaps she gets a pressie at Christmas. She likes the plane rides, too, just like Maria. Maria really likes the plane rides - by all accounts she is a life member of the Mile High Club. But we are getting into CNBCsucks territory here, and he does it better than the rest of us.
November 19th, 2008 at 8:20 am
The second I saw that I sent in an email to squawk giving them the link explaining it for novice reporters like on CNBC. You can look it up on Wikipedia aka Plunge Protection Team.
November 19th, 2008 at 10:31 am
“Scott Nations” is such a stupid hollywood fake name I want to vomit. Kind of like the name “Sam Champion” but way way worse. It just reminds me about how unfree our markets are. It makes me wonder how much of our financial system is really a part of the war machine…I have to wonder what amount of it is fake, put in place by USG and how much of it is honest shrewd investment…I love black-helicopter theories but mostly when I don’t think they’re real. Posts like this bother me for that reason.
November 19th, 2008 at 10:53 am
so with the SP down 4%, the FOMC gives GS a large short term loan at nearly zero interest and tells them to put the funds to work immediately. GS decides to buy SP futures in massive size at or above the bid. Next question please.
November 19th, 2008 at 11:47 am
How can something that doesn’t exist issue a press release?
http://www.treas.gov/press/releases/hp1177.htm
~~~
BR: The President’s Working Group on Markets exists; But are they, as the gent from the video alleges, in buying S&P futures ?
November 19th, 2008 at 1:22 pm
Let’s also not forget Ron Paul’s fleecing McCain during the Florida GOP primary debate - of all the topics Paul could have brought up, he goes with the infamously kafka-esque P.P.T:
http://www.youtube.com/watch?v=oUZwL9GPcNw
Color me unsurprised
McCain’s response = Miss Teen USA - “Well obviously we’d like to see more sunshine” = classic
November 19th, 2008 at 1:52 pm
Just J-school grads on TV. I’ve said it before here, they know nothing about finance that can’t be read in a Wikipedia or Investopedia entry. That goes double for you, Liesman. No shame.
My company just moved into a new building and now we have CNBC on the plasmas everywhere. I will say that Ratigan seems to have grown a pair in the last few weeks.
November 19th, 2008 at 2:17 pm
Maybe it’s these guys:
http://www.theonion.com/content/news/fraternity_in_danger_of_losing
“DURHAM, NC—When the residents of Sigma Alpha Theta house learned last week that the 80-year-old building they call home was under threat of foreclosure, they decided to take matters into their own hands by devising a wacky, R-rated plan to completely repair the battered American economy.
“The moment we got the bad news, we knew there was only one thing we could do,” said Theta president Peter “Cool Pete” Barrow. “Sneak into the Federal Reserve Bank with two cans of Barbasol and a giant fishing net in order to adjust the overnight lending rate while no one is looking.”
“We’re not going to take this decline in investor confidence coupled with the suffocating effect of unregulated derivatives-trading lying down,” Barrow added, belching.
While Theta House is closely guarding the details of its laugh-a-minute economy-rebuilding scheme, Barrow admitted that it involves a 50-gallon drum of Crisco, the U.S. Senate, five Russian exchange students in bikinis, incentives designed to provoke a massive injection of capital from the private sector over the next three fiscal quarters, and a dead horse.”
November 19th, 2008 at 5:13 pm
Excuse me Barry, but what ‘debate’? Seems like it’s just a lot of people calling each other names.
1) If the government is trying to prevent a market plunge, it is doing a piss poor job. Given the government’s record in other endeavors (Iraq, Katrina, establishing a secret world government, fluoridating our precious bodily fluids), I guess its utter failure is the best possible evidence of the PPT’s existence. Sort of like using the pervasiveness of evil in the world as proof for the existence of all-powerful, all-merciful God.
2) I especially like the guy who cites Wikipedia as evidence.
3) Occam’s razor, baby, Occam’s razor!
November 19th, 2008 at 8:50 pm
Let’s go over how it probably works. Remember Uncle Sam has more money than anyone in the US. If they want to buy futures they’ll buy futures. The intent of the team is not to prevent a crash. We all know the Nas crash of 2000 happened. The difference between all crashes since 87 was they were over significant periods of time instead of a few days.
When the market starts tanking the Fed comes in to buy futures contracts to push up the price and avert the panic condition. When the major banks see the futures aren’t indicating such a panic they calm down themselves preventing the further selling. If that doesn’t work and things start getting ugly near the tripping points of the breakers or confidence is really lousy they’ll start buying critical stocks on the DOW.
They have almost unlimited cash and orders come from multiple exchanges. If the market doesn’t go down the shorts panic and then it turns around the other way for normally a big gain. The Fed just needs to gain 1% on every trade and it’s a money maker every time.
Can this really work though when the total system has lost confidence and there really is no bid for stocks? Then, the answer is still no. There has to be at least some confidence in the markets for this to work.
November 19th, 2008 at 9:06 pm
Notice how Santelli didn’t deny the existence of the PPT, jusaid said he wasn’t going to “get involved in all that.” Smart man — likes the gig. BR, can you start a Scott Nations watch: 1 day and counting since Nations was essn on CNBC….
November 19th, 2008 at 9:32 pm
If someone could go back to the 30s bear market rallies of similar size and circumstance and show that the moves were driven by a semi-formal network then we could suspect similar things today. I don’t know.
But I can tell you that I saw a ton of people in my daily life who shouldn’t be anywhere near markets touting that this was a great time to buy and that they indeed have bought thinking this was “the bottom”.
One friend of mine rode GM from 5.20 to 6.XX; I congratulated him and said that was a great trade and it was the perfect time to sell. He said he wasn’t selling until it hit 20. I didn’t have the heart to tell him it would never see 10.
November 19th, 2008 at 9:45 pm
Please check out the massive volume spikes in the last hour of virtually every day since the market started to crash. Sometime between 3 and 4 a 10x volume uptick will hit the tape and try to rally the market. Often times it works, but sometimes reality is too strong a temptress and someone loses a lot of dough. The rally almost invariably hits the more crappy low priced stocks the hardest but stays away from the better stocks. Evidence that we are not near a bottom (because the poop still floats) , and evidence that there’s a deep-breadth, non-fundamental, massive volume uptick bid on the market everyday. PPT anyone?
November 19th, 2008 at 10:03 pm
Fact: A group that could undertake such actions exists (the President’s Working Group For Market Stability)
Pretty Good Assumption: If they ever try to buy futures, they are ceratinly doing it now.
Conclusion: Check recent suspicious action for clues.
For me, I don’t have to check…of course they do it. But remember, I said back in July, repeated here right before election, if Obama got elected, they would likely stop and market would tank. (Note: Market down 20% since election)
November 19th, 2008 at 10:06 pm
nearly every other country in the world has a gov that periodically comes in and attempts to support the market during a freefall. this is a fact. japan did it for YEARS on end and the gov was not even secret about it. why is everyone convinced it does not happen here?paulson is on record as saying he is in constant communications with his wall steeet cronies. is he communicating with the manufacturing sector. how about the teachers in the midwest.when wall street rings his little bat phone paulson responds. almost every gov intervenes in its currency market which is 100x the size of the equity market.
November 19th, 2008 at 10:16 pm
Who’s to say that those large purchases in the futures and in the last 30 minutes aren’t quant trading programs? That’s what I think they are. The smartest traders (or computers) in the room buy panic and sell fear without emotion. The Federal government could mess up a one car funeral. They’re not capable of manipulating anything for more than a few minutes.
November 19th, 2008 at 11:08 pm
Like jmborchers says… actors within the government are interested in an orderly decline, and would step in to avert panic, if that was their modus operandi. Do they have to do it by buying directly? Or could they just tip off a few influential traders for coordination and collusion to trade their own books?
Maybe the PPT is the reason our most recent market crash took a month (Sept 08) instead of a single day (Oct 87). Or maybe the market pricing mechanisms are a process and not an event.
I believe that if the PPT exists (and I won’t really know for sure unless they admit to it), they are far less active than most people believe. Oct 10 and 24 are certainly suspicious. Anyone want to file a Freedom of Information Act with the Treasury to see what the call records look like for those days?
November 20th, 2008 at 12:17 am
“The Federal government could mess up a one car funeral. They’re not capable of manipulating anything for more than a few minutes.”
This flippin’ nightmare won’t be over until, the like, above, is wrung out of each and everyone one of us.
Past that, this: harold hecuba Says:
November 19th, 2008 at 10:06 pm
nearly every other country in the world has a gov that periodically comes in and attempts to support the market during a freefall. this is a fact. japan did it for YEARS on end and the gov was not even secret about it. why is everyone convinced it does not happen here?paulson is on record as saying he is in constant communications with his wall steeet cronies. is he communicating with the manufacturing sector. how about the teachers in the midwest.when wall street rings his little bat phone paulson responds. almost every gov intervenes in its currency market which is 100x the size of the equity market.
Is an obvious, readily observable, and easily referenced Truth.
http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=BOJ+defending+the+Yen
for ex.
November 20th, 2008 at 1:18 am
Nations’ “evidence,” other than some speculation and hearsay, seems to be that the market did weird things that he can’t otherwise explain. I’m not sure that it looks any stranger than other bear markets.
November 20th, 2008 at 5:01 am
Sorry, I will stick with Caroline Baum here against the PPT, because it would be too easy to trace. Financial transactions leave marks, and writing books, etc., about the indiscretions of superiors is too lucrative. Ask Michael Lewis, or, on the other side, ask Chuck Colson.
November 20th, 2008 at 10:55 am
To “theother”: Sorry buddy, you’re wrong. I know Scott, he used to be a floor trader in the Ten Year Note pit at the CBOT when I was trading in the Five Year Note pit.
November 20th, 2008 at 11:02 am
@David Merkel
It is not about being traced and never is. It is about being prosecuted that they are worried about, or should I say not worried about. The fed’s fractional reserve banking system is an obvious scam and a complete rip off to anybody who takes fifteen minutes to study it. For most people I explain it to, the hardest part to believe is that the banking system has that much power to destroy the value of their money. Once most people ‘get it’ they become really angry and I am positive if enough people truly understood how their money worked they would be marching on the capital demanding changes. It is done right out in the open yet it is still being done. Why do you suppose the government continues to do so knowing that if the public caught on they could soon be sitting beside Conrad Black? Because they have no fear of prosecution.
The system works and is set up for the system. Until people wake up and demand changes, the leaders and ‘owners’ of the system will continue to run it as they see fit.
And BTW it is rumored that Conrad Black has been lobbying for a pardon from Uncle George before he leaves office. Why will I not be surprised if that comes through?
November 20th, 2008 at 12:18 pm
Don’t forget the Fed is just a bunch of private banks with the president picking the governors and chairman….
At this point in the market the Fed really has the cash to move markets, the markets is illiquid now, and a couple of million dollars can move the market in a certain direction.
I am not here to say that the group exists and is active but one can build a pretty good conspiracy theory on the following
- highly illiquid market, a few billion dollars a day would move the market listen to Joe Kernan’s statement
- there’s a good enough reason for such manipulation to occur against breaching the current technical level the market is flirting with (38% fib retracement from the 1900s, 2002 lows, October lows), if breached, that will be unbearable chart damage
- Take a look at dollar action in the past year, if you don’t believe there was any form of manipulation to the dollar, then…..also manipulations in the Gold and silver markets, look at the Aug COT report, 2 US banks were responsible for shorting an equivalent of 20% of the world gold supply few days before the major collapse of the gold and silver market
- Finally recent price action in the markets in the final hr of trading: trading volume all day is very light, and all of a sudden there’s a spike in volume, and the market reverses all the way from negative territory to positive territory see this video http://www.youtube.com/watch?v=cYAcM7KtGUI
- There are many other reasons one can come up with
Worried about traces? No biggie, just increase the money supply to a few banks, it’ll look like regular bank trading activity on the floor.
I just think it’s possible, I would like to believe i’m wrong
November 20th, 2008 at 10:41 pm
hotfudge makes some very, very interesting points.
The opacity the CFTC offers makes it the ideal place for manipulation. As he points out 2 banks shorted the equivalent of 20% of the world’s gold supply and we don’t know which two banks it was! How’s that for a trustworthy system? You’d think one of CNBC’s “journalists” would find that story worth a look.
With 8,000 member banks, they have opportunity and means to manipulate markets undetected. Either in big block trades, or by “smurfing”. No paper trail, no proof. So, the questions that remain are: Would they do it? Why would they do it? and Why wouldn’t they want anyone to know?
Would they do it? - Yup, these are not principled men we are dealing with (don’t make me itemize).
Why would they do it?
Here’s where it gets murky, because while I’d like to think it would be for good reasons, like discouraging the lemmings bent on self-destruction, or giving soon-to-be retirees, and other slow money, more favorable exit points.
Unfortunately, that would lead to other questions, like, “Were you trying to rig the election?” and “How much money did you lose?” and “What other markets are you futzing in?” and, “Hey, where were you guys today?”
Why wouldn’t they want anyone to know? See the previous answers.
So, from here on out, I’m gonna pretend that I don’t believe the PPT trades S & P futures, just like Baldie & the Bimbo. Here goes:
Wow, Becky and Lisman really pants that Scott Nations dude!
Too bad their bullshit detectors were in the repair shop earlier this year, when the clown parade was predicting, “double-digit growth in the second-half.”
November 20th, 2008 at 11:35 pm
Let me (try to) put this to rest once and for all. I’m pretty sure others know this too.
There is a video clip out there of a reporter interviewing either a high level treasury official or a Fed Res. official ( from memory I think it’s a Fed Res.) right after the announcement of the Working Group or sometime in that vicinity right after the ‘87 crash.
The interviewer asks him something to the effect of “what measures can the group take to stave off another ‘87 crash” and the official answers (paraphrasing) “we can work within the futures market”.
I know I’ve given a very vague description but I can’t find this clip. I don’t remember where I saw it nor can I find it; prob. in a documentary but it does exist. Maybe someone with some time and better research skills can locate it……..maybe it’s easy to find……….
There should be no doubt that such a group exists. However, like another poster stated, they prob. aren’t involved as much as some think.
November 20th, 2008 at 11:40 pm
Oh by the way that exchange on CNBC serves a very, very honorable purpose.
It is a clear example of media shills, Fed Res. agents/lackeys, and a truth teller………..
Truth Tellers are clearly outnumbered in our society.
November 21st, 2008 at 10:09 am
The plunge protection team exists and is well documented in this washington post article…
http://www.washingtonpost.com/wp-srv/business/longterm/blackm/plunge.htm
Whether they operate in the futures market or not has never been proven although the moves on days like Oct 1oth, which Scott Nations talks about on the video, definitely feel artificial. In March 2008, as well, it looked like multiple Fed governors would give gloom and doom speeches in the morning to get traders leaning short. Then huge buying came in in the afternoon to cause a massive short covering rally. I wouldn’t put it past guys like Paulson and Rubin (who both know how to get the most bang for the buck trading) to try to prop the market up in the short term to keep from panic setting in.