Comments Jesse has made about the Exchange Stabilization Fund:
>>>As you may recall, in the 1990's Robert Rubin established that one could pump up the market most efficiently by buying the SP futures, and in a sense forcing all the index followers and funds to buy stocks to keep up with that trend. It has been used any number of times, and I suspect is still in the back pocket of the Exchange Stabilization Fund, aka 'The Plunge Protection Team,' as a tool for 'saving the markets.'
As Rubin's dictum went, it was cheaper to pump up stocks in a falling market, rather than coming in after the fact and repairing the post bubble damage with a genuinely productive effort, or even a bail out.<<<<
jessescrossroadscafe.blogspot.com
>>>I should add here that if the equity market does not respond sufficiently on the announcement, we may see the entry of the Exchange Stabilization Fund and its house banks, either into the close or tomorrow. They tend to do this to reinforce some Fed action if the market does not respond on its own. This is view as benign, similar to jawboning, the 'management of perception.'<<<<
jessescrossroadscafe.blogspot.com
>>>But the Plunge Protection Team, tapping any needed money from the Exchange Stabilization Fund, started buying the SP futures, and continued to do so at a couple of key points in the day, and particularly into the close, with some wild price swings. The SP futures dropped almost 10 into the close off that late day buying pump.<<<<
jessescrossroadscafe.blogspot.com
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