Is there a plunge protection team looking out for the wealthy? Yes. Do they try to manipulate markets? Absolutely. So, I totally agree with those two concepts. Where I part ways with the author is that the PPT is often very unsuccessful in their efforts. Just like technicians, they are capable on many small moves and usually failures at major turning points.
First, let's look at the markets. It is the Fed's job to manipulate the govt. bond market and the currency markets. And that is where the PPT has been most successful. While the stock market was falling apart in 2008/2009, the T-Bonds were staging a major bull market. Interest rates on T-bonds reflect current economic conditions in no way. Corporate bonds and munis are much less malleable.
While we were having bubbles in real estate and oil, the dollar crashed and burned. The concept behind this is to reward the Energy behemoths (real estate came along for the ride) while destroying the store of value of the American working class. Thus, unions become weaker, as solidarity is strained when folks are afraid of losing their jobs or becoming underemployed. The wealthy, knowing that Bush would attack the workers, simply kept more of their assets offshore. Then had pet Congressmen pass laws that allowed them to bring their money back to the USA without taxation.
However, the PPT and the wealthy did not want the stock market crash we've recently suffered. They sure didn't want AIG and Lehman to fail. Those two cos. along with Citi and Merrill, are citizens in good standing in the we vs. them war. They didn't want to see nearly everyone in the Forbes 400 suffer a major wealth decline. What does it matter if a guy with $10 billion loses $3 or $4 billion? He's still wealthy. But they don't think that way and the guy with the mere $6 billion is pissed and scared.
The problem was, allowing the fox to guard the henhouse eventually means no more hens and a starving fox.
Manipulation is not new. I often blame Ronnie Babe for catering to the wealthy after the 1987 crash, but it was going on way before the red head was Prez. The wealthy want free, unfettered markets until they lose, then they want a rule change. As the old Hoyt Axton song goes:
"Some you win and some you lose.
And the winners all grin
And the losers all say,
Deal the cards again.
Man, won't you deal the cards again."
The wealthy are powerful enough to get a mulligan. And that's governments main job. Well, main job after creating and fighting wars. |
