Equity markets are manipulated. The facts show, when they get out of control, governments and central banksters rush in and rescue them.
The United States has its Plunge Protection Team. By executive order by President Ronald Reagan in 1988, the PPT “Working Group” was formed to keep Congress and the White House informed of critical financial and economic trends and, more succinctly, to identify an oncoming catastrophic market downturn, like the one experienced in 1987, and recommend and take action to avert it.
And back in February of this year, when the Dow tumbled some 1,700 points during a two-day period, as the slide accelerated, the losses were staved off by late stock-buying frenzy. A number of financial analysts speculated it was the PPT that intervened and staved off an even worse decline.
And it’s not just Wall Street.
China, the world’s second largest economy, whose SHANGHAI Index is down more than 30 percent this year, has a National Team that intervenes when its markets sharply declined.
Last month, China’s Central Bank intervened for five days running, injecting $77 billion to prop up the slumping market. Back in 2015, the National Team owned over 6 percent of the mainland stock market in a massive state-sponsored rescue effort to prop up stock prices. And now, in an effort to prop up the sagging Kospi Composite index, which has fallen 14 percent in October, the South Korean government established a fund to prop up local stocks. TJ
As we go to press, global equity market instability continues to accelerate. The Shanghai Composite Index, down more than 30 percent this year, continues to plunge and in the U.S., markets are wildly swinging from multi-hundred-point highs to multi-hundred point losses.
While we know the Chinese National Team has intervened, has the Plunge Protection Team in the U.S. propped up diving markets? Who knows? “We the Little People, perched far beneath the White Shoe Boys Wall Street Gang, are not of a high enough social order to be informed by the powers that be.
And now, with the mid-term elections just a week away in the U.S., the diving Dow, slumping S&P and correction territory Nasdaq are adding more downward pressure on the Republican Party which is expected to lose its House and possibly the Senate majority … as well as state houses across the nation.
Therefore, should selling panic hit the Street between now and Election Day, will the Plunge Protection Team step in to prop up the failing U.S. markets? Will it work? Only time will tell.
Indeed, regardless of the country, the governments will do all they can to artificially pump up failing equities. Moreover, should the market declines intensify, The Plunge Protection Team, The National Teams and other world “Teams,” plus the central banksters, will coordinate market manipulation strategies in attempts or reverse and/or minimize the selloffs.