Today was what I think could be counted as a pretty good confirmation of the existence of PPT (plunge protection team) and they way it works.
I always suspected that PPT is not involved in direct market manipulation because the Uncle Sam is pretty short in cash in those troubled times. But it takes some art to move the markets in the most critical moment the most effective way without spending a dime on that.
Look at today chart:
Today afternoon the market clearly broke down the triangle formation which was pretty sufficient to trigger a quick ride back to January lows next week. Then, just half an hour before the market closed the rumor surfaced that Ambac will be rescued. They didn’t give any details before the marked closed, so the intriguing news sent the shorts to the run and the chart was saved.
Do you remember that every time the markets were about to plunge something always happened. Usually it was some kind of a plan (that later was proved to be ineffective) or some kind of rumor (that later was proved to be wrong or not important) or some familiar faces pop on TV saying that they have some magical solution to all problems. Whatever works, but you can’t undo the market – once shorts stampede to cover the plunge is over. This tactics must be familiar to those who follows the political roots of current elite. Remember, when Bush was campaigning against McCain back in 2000 the rumor surfaced that McCains is adopting a black bastard child. Of course that was wrong and the origins of the rumor were not proven, but it worked! And whatever works must be used.
How convenient is that Buffett has a policy to never comment on rumors that he’s buying something?
The Theroxylandr in Flame 
February 22, 2008 at 9:04 pm
This was the most blatant media abuse and market manipulation seen this year – but hey it’s early. Feel free to insert your preference of prepositions to describe the abuse “of” or “by” the media. Perhaps complicit works just as well.
There was nothing new about what CNBC announced and was simply a ploy by the PPT to buy more time or the hedge funds to stir up liquidity to sell in to. Of course, in these desperate times it takes desperate measures by desperate people who will lie and cheat to achieve their end. A sad commentary on the quality, or rather the lack thereof, of our elected leadership today. Just another day on Wall St. – right?
February 22, 2008 at 9:31 pm
I think PPt probably isn’t the best term to use. But for anyone who followed today’s action and didn’t come away with some inkling of manipulation , I’m not sure what to tell you. The bottom line is that CNBC “broke so-called news ” concerning a bailout of ABK in the last half hour of trading…. the reality is that at best , we may see the Banks who would be impacted the most by the imminent downgrade of ABK making a relatively meager capital injection. ABK’s problems have not gone away. This at best is just an example of kicking the can down the road. Despite the silliness of responding to an end of the day rumor from CNBC , the equity markets jumped on this news quite exuberantly…. draw your own conclusions….
February 22, 2008 at 10:16 pm
[…] Today was what I think could be counted as a pretty good confirmation of the existence of PPT (plunge protection team) and they way it […]
February 22, 2008 at 10:45 pm
Fred – good wine might some times push me to cut corners on my explanations. I painfully monitored the indices today for an entry point but never got one. I was probably 2 minutes from selling several YM contracts before it ripped up. I never chase – learn that one the hard way.
Agreed probably not the PPT directly but have your pick of invested parties. There is no “I” in this team.
Second, a catalyst was needed to “save” the market (i.e. protect the invested parties interests) from a technical breakdown and so one was produced.
Sadly, these type of activities will not be properly investigated as they are the tools of the power and wealth that corrupt the system and maintain its “status-quo”. I believe one film captured it best – “Wall Street”. Blue Horeshoe loves Ambak – tell your friends
February 23, 2008 at 10:15 am
Even a dumb retail investor on the other side of the Atlantic (i.e. me) was forced to raise his eyebrows and curl his stiff upper lip when the markets closed up at the end of Friday trading.
However, ecomomies are not saved, and debts aren’t paid by rumours. Manipulation cannot change the outcome, whatever that outcome eventually proves to be, so I will sit back patiently with my bets still on the table.
February 23, 2008 at 10:47 am
Justenuf , Let me break it down — just my humble opinion of course. Friday was clearly manipulation. First, you had Charlie G of CNBC break the news in the morning of an “imminent ” downgrade of a bond insurer, perhaps by the end of the day. This story came on a day with no economic news or release of data. As the day wore on , equities , which had been in postitive territory, broke to the downside. Right about the time that Moody’s downgraded Channel Re ( somewhere around 3 pm or perhaps 3:30 pm ) , back comes Charlie G with the breaking news , ” breath-taking bailout ” of ABK… presto , markets reverse and go from down 120 or so on the Dow to up more than one hundred. Since the story as reported did not indicate an actual deal had been reached and even noted it could still blow up , this by itself didn’t justify the ramp up we all saw yesterday. Moreover , as more details have come out , it’s clear that a “bailout’ is not what’s being discussed. My understanding is that the banks most effected by a potential ABK downgrade are backstopping a rights issuance to existing shareholders ( using the Soc Gen rights issuance recently , expect a 40 to 50 percent haircut on the price of that issuance ); this rights issuance , which may be 2.5 billion — pretty big since ABK is worth about a billion. So , this is more along the lines of what Warburg did with MBI. And if the banks backstop this issuance and buy the rights due to the lack of investor interest , massive dilution to existing shareholders. Considering ABK insures about a half trillion in munis and structured products , the amount we’re talking about is chump change. The overall dynamic of ABK hasn’t changed even if the deal goes through. The manipulation on Friday was raindeer games by the pigmen to make a few bucks , aided by the clowns at CNBC breathlessly relaying their instructions as news. As far as ABK goes , any rights issuance of the magnitude discussed would result in massive shareholder dilution for existing shareholders. Moreover , we still don’t have any concrete plans to delineate how their businesses can be split , what happens to the structured side of the business or why does this make the slightest bit of sense for the banks. The banks are self insuring their own risk here ( kinda like giving money to your auto insurer ( who is insolvent ) , after your own car is totalled– now your carrier can pay your claim ! LOL ) and potentially becoming the owners of a very troubled business without a clear comprehension of the overall risk imbedded in ABK , which included counterparty risk with other bond insurers. Sadly , these activities are directed by the Government ( PPT influence – not cash per se) and aided by their media tools . Print and TV tools by the way. Besides , with the TAF and massive FHLB injections from the 3rd quarter on , what more can the government do ? They have already become the Lender of last resort !
February 23, 2008 at 11:17 am
Note that “lost” in the well timed ABK news was that MBI’s reinsurance agent was downgraded late in the afternoon…………
February 23, 2008 at 3:47 pm
TV… the news regarding Channel Re wasn’t lost…. that news was pushed to the side on purpose. That’s the point of manipulation , but it doesn’t change the fact that the downgrade occurred. So , what should be considered is why that specific downgrade as to MBI ( and let’s be very clear , this is very significant for MBI ), was brought forward on Friday. I’m not sure how one could support an AAA rating for MBI if Channel Re was dropped to the levels it was dropped… so , one could assume , by the end of next week , it wouldn’t shock anyone to see MBI go down three or four levels — consistent with the new levels for Channel Re. here is the reality… neither ABK , FGIC or MBI can generate new business….. so , they all are in runoff mode.
February 23, 2008 at 6:03 pm
Well, I call them the boys, the Wall Street boys.
This situation is similar to “when you owe the bank a $1000, you have a problem. When you owe the bank $100,000,000, the bank has a problem.” Fed and the treasury have a problem with Wall Street and finance. There is a Fed and treasury open market operation team that does step in.
Those who think that the government does not step in, are just as imaginative as those who weave conspiracies in every market move.
What is most amusing is that some folks are advocating day trading instead of allowing these moves go untraded. If you tried to day trade today, you would have gotten killed. Nasty day. Who in their right mind would have gone long at 3:30 unless they were inside?
February 23, 2008 at 11:28 pm
Of course the news wasnt lost, notice the “” around lost…………….
February 24, 2008 at 1:06 am
Gotcha on that TV….. Funny how that just kinda worked out , right ? Once you understand th game is played , it’s a bit predictable.
February 24, 2008 at 5:55 am
If you tried to day trade today, you would have gotten killed.
It depends. Bulls, bears, pigs. A pig would have gotten killed yesterday. Take SRS and SKF, for example (two of my favorite trading vehicles). Both pushed higher early in the session on Friday, so I took my profits (after entering late on Thursday). But if you had waited, i.e. if you had been a pig, you took a hit later in the day.
It’s obvious that the PPT can manipulate the markets well enough without getting involved in cash trading. Just leak these rumors etc (none of which are ever investigate). People should trade and not be afraid to book profits now that we are in the near runup to the March rate cut and the PPT has been (once again) shown to be very active.
February 24, 2008 at 5:59 am
…this by itself didn’t justify the ramp up we all saw yesterday.
Not sure what you mean by “justify”. Many sectors of the market are obviously not trading on fundamentals right now. Anyway, most of the buying was no doubt short covering — many of these financials etc still have massive short interest. And if you want to protect profits or prevent losses in the face of what you describe as “manipulation” (I tend to agree), then covering is always “justified”.
February 24, 2008 at 10:31 pm
Eh , I agree equities aren’t trading based on fundamentals. I disagree that the ramp up primarily was short covering…. not with the velocity of the moves within the same half hour time frame ( across the Dow , Nasdaq and S&P ) but certainly short covering played a role. My point is until we see what the precise terms of whatever workout is actually on the table for ABK or details are presented concerning any good bank / bad bank bifurcation , I think the news is prematurely described as great news. It may be good news , bad news for cdo investors and the Investment Banks that rely on insurance from ABK…. or we may get no news at all next week , like the SUPER SIV ( until that just faded away. )
February 25, 2008 at 8:42 pm
Do you see the problem we both have ? It’s hard enough having a discussion regarding so called fundamental issues or even technicals n the current climate…. let’s just look at today. S&P decides to keep AAA for ABK and MBI today….. yet after the close , look at the news from MBI. Prior to making their decision , do you think it’s realistic to believe they had no clue as to MBI’s plans ? So just as to MBI , we would probably agree the shareholders get the short end of the proverbial stick.. but at least they did raise some money … but let’s look at ABK… why has the AAA rating been affirmed ? they haven’t raised any additional capital and if a split is announced , how does that play out ? Absent details , why the rush to affirm the ratings ?
February 28, 2008 at 7:53 am
Morning all ! I don’t know if anyone has checked the 10k from FNM , but if you have a moment to read an epistle scarier than Frankenstein or Dracula , take the time to thumb through it. In particular , check pg. 79 wherein the Home Saver Initiative is discussed….. I could summarize it , but that would take away the simple pleasure of discovery away from. But I assure you if you are a FNM shareholder or hold FNM paper , you want to check this out. Comments from anyoneelse concerned about would be appreciated.
December 27, 2008 at 10:21 pm
tapecgscaczjbspkwell, hi admin adn people nice forum indeed. how’s life? hope it’s introduce branch 😉