Thursday, November 20, 2008

So Is The Government Manipulating The Market?

Remember when Ron Paul mentioned the Presidents Working Group during the presidential debates.. he asked McCain if he knew about what that was and who was on it? This is the group that is being discussed on this interesting and revealing video segment from Squawkbox (11/17/08)



The Plunge Protection Team is also known as the Working Group on Financial Markets and it was created by Executive Order 12631, signed on March 18, 1988 by President Ronald Reagan. This Working Group was established in response to "Black Monday" October 19, 1987. The group is supposed to give recommendations for legislative and private sector solutions for "enhancing the integrity, efficiency, orderliness, and competitiveness of financial markets and maintaining investor confidence".

Of course the CNBC anchors quickly dismiss the notion of government manipulation as "crazy talk" and equate it to something that might be put forth by those who talk about other "conspiracy theories". It was an interesting exchange nonetheless.

It looks like yesterday's sell-off and exodus into T-bills is a result of more dismal news from Washington even as they hold hearings with carmakers who are asking for public money loans and bailouts to help pay for union salaries and pensions.... but we'll probably see a mini-rebound in the market as we have been seeing ups and downs in this roller coaster ride in the past few months since before the election. So does this PPT have anything to do with these rebounds, or is is Warren Buffet and his ilk scooping up "bargains"? maybe we'll never know for sure.

So given that - is it conspiracy theory, or is the government controlling the market?
By the way; it's interesting to note that CNBC is owned by GE.

1 comment:

Eric Holcombe said...

The government absolutely manipulates many aspects of the market through their interfering legislation and/or huge monetary leverage (Automotive, mortgage, energy, retirement funds, defense contracts come to mind).

We are now hearing rumors of "mandatory" 401k type accounts. Wall Street will sure appreciate the mandated capital extraction - a permanent bailout.

The biggest laugh in the whole video..."but wouldn't you need some kind of legislation to allow you to do that?"

Sorry, but for some reason, I just don't put a lot of trust in a representative from Bank of America telling me about market manipulation.

The Creature from Jekyll Island is alive and well.