Plunge Protection? Market Manipulation?
"Wall Street Becalmed", a war cry from the frustrated investment banking community – a rational for poor earnings performance of the trading arms of many a bank. Goldman Sachs earns single digit returns on capital with mid teens its objective.
The American political world in extreme volatility, unlikely to survive the madness of its President. U.S economic growth stalled – growing at rates below the rest of the developed world. Why don't the markets reflect these and other real problems in the U.S economy – with an occasional correction or, at least, some downs with the ups?
"THE PLUNGE PROTECTION TEAM"
Created by Ronald Reagan in 1988 to deal with crashes such as the crash of 1987, the group was formed under Executive Order 12631.
The "Team" comprises of the Fed Chair, the Secretary of the Treasury, the head of the SEC and commodity Futures Trading Association. It works closely with all the U.S. exchanges and certain Wall Street Banks including Goldman Sachs and J.P. Morgan Chase (an Insider Trading Risk?). The primary stated goal of the group is to enhance the integrity, efficiency, orderliness, and competitiveness of our Nation's financial markets. The Team reports to and answers only to the president. There are no minutes kept of meetings, communications or transactions. The goals are to be achieved by the Federal Reserve in combination with certain key banks, intervening in markets, all markets including the derivative markets. These interventions seem to have successfully brought the markets back from the edge of disaster frequently since the creation of the Plunge Protection Team – all done with taxpayer and bank depositor monies.
What if the low volatility of markets since the Trump election evening crash is a product of frequent intervention in markets engineered by the group in abeyance to the new President? What if taxpayer money is the supporting factor for the markets unusual and perhaps, unwarranted performance over the past months?
For those who follow markets closely – "watch the tape" there has been constant chatter and amazement at the resilience of markets during each and every downturn.
Are our markets being manipulated by a group formed to protect them from irregular activity? Is this lack volatility in markets another façade to justify, economically, to investors the lack of efficiency of U.S. leadership? Should congress review the activities of the Plunge Protection Team in its budgetary review? Americans need to know how taxpayer monies are being spent and for whose benefit. Are the 99% again enhancing the wealth of the 1% through market manipulation?