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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Lucretius who wrote (181303)7/19/2002 9:29:03 AM
From: MythMan  Read Replies (5) of 436258
 
From today's WSJ..

>>Government Secrets

Tumultuous markets are always fertile breeding ground for rumors, but this one was too juicy to ignore.

Following the spectacular late rebound in stocks Monday, a story started circulating that Uncle Sam was doing its bit to keep the market afloat. The rumor, distributed widely in e-mail messages and chat rooms, was specific: The White House Working Group on Financial Markets, created after the 1987 crash and dubbed by conspiracy theorists as "The Plunge Protection Team," had instructed the Federal Reserve to buy stock futures.

It didn't seem to matter that the White House went on the record denying the talk.

Some Fed watchers did their part, pointing out the flaws in the speculation. Morgan Stanley economist David Greenlaw sent out a research note dedicated entirely to the theory, in which he reminded readers in bold letters that "THE FED DOES NOT HAVE THE LEGAL AUTHORITY TO INTERVENE IN THE S&P FUTURES MARKET" and noted that the weekly publication of the central bank's balance sheet data would make futures purchases impossible to hide.

Meanwhile, IFR Thomson's BondData service surveyed its readers, many of whom would have seen Fed orders come through their trading desks. IFR got more than 30 responses in a few minutes. The results: No one saw the business, no one spoke to anyone who had seen it and no one believed it.<<
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