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The PPT and the Government are Manipulators Nonpareil

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August 02, 2008 – Comments (9)

This post is in response to TMFSinchuruna's recent blog:

http://caps.fool.com/Blogs/ViewPost.aspx?bpid=72855t=01006124249416869148

I would have rec'd your blog 10 times if I could have, Sinchuruna. I agree with every point you made.  I'm completely convinced that the PPT is pulling out all stops to manipulate the market.  Every time gold opens higher, it magically gets tamped down.  Every time index futures are down big, the market magically recovers.  Just when the market was about to fall off a cliff a couple weeks ago, oil drops $10 and saves the market.  The government is the biggest manipulator of all.  How long can they succeed in preventing a meltdown?  I've been blown away about their success so far.  In fact, I've been contemplating a new investment strategy, which is to imagine that I'm part of the PPT and try to anticipate the PPT's next step.  If oil or gold futures are up big, short them at the open.  If S&P futures are down big, buy them at the open.  When the VIX goes above 30, buy put options on it.  If I had been using this strategy all year, I think I'd be sitting on massive gains.  (As it is, I'm fortunate that my real money returns for 2008 are positive but not spectacular).

The only thing is, I'm convinced that the PPT will fail eventually.  And then look out below!  This kind of massive manipulation can't work forever -- the markets will eventually find their correct levels.  I simply can't believe it has worked so far.  It's hard to remain steadfast to your investment convictions when you strongly suspect that you're fighting a PPT with almost unlimited powers.  But I think you have to stick to your convictions -- What else are you gonna do?

 

9 Comments – Post Your Own

#1) On August 02, 2008 at 4:59 PM, kdakota630 (29.81) wrote:

Forgive me, but "PPT"?

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#2) On August 02, 2008 at 5:13 PM, StatsGeek (29.53) wrote:

http://en.wikipedia.org/wiki/Working_Group_on_Financial_Markets

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#3) On August 02, 2008 at 7:20 PM, abitare (58.10) wrote:

John McCain and Miss Teen SC on Economics

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#4) On August 02, 2008 at 8:00 PM, nuf2bdangrus (< 20) wrote:

PPT---"The working groupl on capital markets"  known by the rest of us as the plunge protection team.

 

THey were in full force when UBS wrote off 20B and the market almost crashed, and it miraculously jumped 300 pts. 

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#5) On August 02, 2008 at 10:38 PM, GS751 (27.55) wrote:

I sometimes what they do locked away in their offices on their bloomberg terminals..........

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#6) On August 03, 2008 at 8:59 AM, tiobueno (99.47) wrote:

2003 article by John Mauldin: PPT doesn't (can't) exist

http://www.safehaven.com/article-721.htm

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#7) On August 03, 2008 at 12:20 PM, StatsGeek (29.53) wrote:

The PPT is another name for the President's Working Group on Financial Markets, so it does in fact exist.  The very debatable question is what powers the PPT has, i.e., do they buy and sell futures in the markets to try to avert crashes.  Given the recent massive interventions by the Fed and the Treasury, it should shock no one if they are also printing money in order to prevent a stock market crash.  The entire financial system is very fragile right now.  Just my opinion.

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#8) On August 05, 2008 at 11:14 AM, tiobueno (99.47) wrote:

Statsgeek,

Yes, absolutely, we all know that the President's Working Group on Financial Markets does exist. The PPT does not exist. But, anyway, your opinion counts.

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#9) On August 07, 2008 at 3:14 AM, AnomaLee (28.88) wrote:

http://www.treas.gov/tic/mfh.txt
 4/  Caribbean Banking Centers include Bahamas, Bermuda, Cayman Islands, Netherlands Antilles and Panama. Beginning with new series for June 2006, also includes British Virgin Islands.


How are these nations consolidated into the Caribbean Central Bank able to increase their holdings of official debt by over $70billion since 2007?

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