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Plunge Protection Team Now Official

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What was once conspiracy theory is now an accepted and acknowledged policy tool.

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I've been digesting this article in The Telegraph. Not that the Plunge Protection Team is a shocker. We've spoken about the Unusual Suspects for a long time and have been monitoring the Invisible Hand since. It's out there and what was once conspiracy theory is now an accepted and acknowledged policy tool.

A few thoughts:

  • Never underestimate the motivation of a corner and caged animal. We've been eying this for a long time and it remains very much in play.

  • Ultimately and eventually, intervention won't work, it'll simply buy time.

  • I will humbly offer that the Working Group didn't take a break after 9/11, as the article suggests. It's my belief that they were proactive into major political events, be them elections or invasions. This statement will raise eyebrows, I know, but the mere mention of this topic did the same when we first alluded to it six years ago.

  • So, what to do? Be aware that it's there but don't blindly believe that it'll save the day. We've already seen massive intervention, central bank liquidity injections, discount window collateral shifts, adjustable-rate mortgage freezes and behind the scenes maneuvering. Expect to see more but keep it in perspective.

  • And take a deep breath. We're navigating our way through the most interesting period in the history of the financial markets. It's far from easy and anything but sane but we'll find our way and get there together. That is the benefit of the Minyanville community and by reading this, you're already better prepared than most.

    R.P.
No positions in stocks mentioned.

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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