Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: ecrire who wrote (106091)	1/5/2010 12:32:22 AM
From: maxncompany	10 Recommendations Read Replies (1) \| Respond to of 116555

The market is always right in the sense that whatever the market is priced at is right. But that doesn't preclude reasons as to how the price came to be what it is. The President's Working Group on Financial Markets is not some conspiracy theory. You can deride all you want, that doesn't mean the executive order signed by Pres Reagan on March 18, 1988 is fictitious.

To: ecrire who wrote (106091)	1/6/2010 11:37:00 AM
From: SliderOnTheBlack	10 Recommendations Respond to of 116555

re:"Oh,so now its the Fed goosing the stock market? Well, well, they'll stop at nothing, will they? Come on, get real! Jesse Livermore said: Markets are never wrong. Opinions are." Message #106091 from ecrire at 1/4/2010 9:37:11 PM --------- I don't think the Fed had high frequency, front running, black box traders managing the market for them in Jesse's day. The Exchange Stabilization Fund, more commonly known as the Plunge Protection Team, isn't a conspiracy theory, it's a "force multiplier" for the Wall Street Mafia. And what do you think ole' Jesse would have to say about the behind closed doors extortion of Congress by Hank Paulson with Bankstergate I in 2008, and now Congress giving the Fed a fresh $4 trillion dollar credit line for next time Wall Street bets wrong, and wants to socialize it's losses? In today's market, quoting Willie Sutton may be more relevant than Jesse Livermore. Believe what you want, you still need another 35% rally just to get even with October 2007, not to mention the now decade old 11,497 DOW close from December 1999. Let Ron Paul & Congress get a peek behind Bernanke's curtain and a look at the Fed's books, and you just might be looking at a little Nikkei Deja Vu all over again... Time for Fed to disprove PPT conspiracy theory Commentary: Analyst charges that government is manipulating market. marketwatch.com WASHINGTON (MarketWatch) -- The massive stock-market rally in the past nine months is mostly due to secret government buying of stock-index futures, a respected stock-market analyst said Tuesday. Charles Biderman, chief executive of TrimTabs Investment Research, is the latest and most credible person to charge that the Federal Reserve and the Treasury (in league with top Wall Street firms) is rigging the stock market on a daily basis. In a special report released Tuesday, Biderman said the $6 trillion increase in U.S. stock-market capitalization since March can't be explained by the usual sources of funds flowing into the market -- such as mutual funds, direct retail investment, pension funds, hedge funds or foreign purchases. Read more about Biderman's theory. marketwatch.com The only logical explanation for the extent of the rally, he suggested, is secret buying by a government committee known colloquially as the Plunge Protection Team. It's like the dark matter that astrophysicists conjecture must be there, even if we can't detect it. The PPT was established by President Ronald Reagan in 1988 after the 1987 stock crash to coordinate the government's response to market meltdowns. It consists of the Fed chairman, the Treasury secretary, the head of the Securities and Exchange Commission and the head of the Commodity Futures Trading Commission. Biderman acknowledged that he had no direct evidence that the Fed and other agencies have intervened in the stock market. But he worried about what will happen to the market if the PPT has been buying and suddenly stops. The Fed, of course, is a major player in the fixed-income markets, buying and selling billions in Treasurys, agency bonds and mortgage-backed securities. It's taken on hundreds of billions in assets from Bear Stearns, American International Group Inc. and many unnamed banks to which it's lent money. Presumably, all of those positions are duly reported by the central bank each week. But the Fed has never said it is buying equities or equity futures. Doing so would likely violate the Federal Reserve's investment policies, and could violate federal law if not disclosed properly. Aside from the legal issues, the PPT would have operational constraints. It's hard to believe that the Fed could keep such a conspiracy a secret for 20 years or more. An operation big enough to manipulate markets for months on end would be big enough to develop leaks. With so much money at stake, anyone with direct knowledge of the conspiracy (such as a $30,000-a-year administrative aide) would be highly tempted to blow the whistle. Yet Biderman's accusation of PPT market manipulation is another argument in favor of a complete public audit of the Fed's books. As any casual reader of this site's community boards knows, there is a widespread belief that the PPT does manipulate stock prices on a daily basis to enrich its pals and screw individual investors. It would be useful to prove them wrong. And if they are right, the PPT should be put out of business. ---------- SOTB