Propping up the stock market?

[raccoon]

Do you ever wonder if somebody is propping up the stock market?

Think about it. Suppose you've got a million invested in stocks/mutual funds. You've got a lot more than most Americans, but to the stock market you've small potatoes. Of course, you don't want to lose what you have.

Then think how much somebody who has umpteen million would feel about losing what he/she has.

Seems to me the ultra-wealthy/power elite would go to great lengths to keep the stock market from crashing.

[Sammy Pepys]

1. It would be incredibly difficult to pull off...

..and if someone/some group was, I doubt it would be a well-kept secret.

[RazzleDazzle]

3. Not hard at all.

It's referred to as the Plunge Protection Team -- or at least one group or version is. I think there's probably manipulation by private individuals and concerns as well.

[raccoon]

4. I looked that up--Plunge Protection Team. That's scary. nt

[Sammy Pepys]

5. Working Group on Financial Markets...

...also known as the PPT doesn't come into to play in the type of scenario the thread starter is talking about. That type of scenario, as I mentioned before, would be very hard to pull off. The PPT isn't involved in things like that.

[RazzleDazzle]

10. Details, details

dismissive wave of the hand

Maybe you're right. Maybe it's NOT the Plunge Protection Team. But if you think for a minute that there aren't incredible machinations going on in every conceivable area of this economy, I'll have my buddy with the bridge look you up (uh, not the one with a "red bridge" in San Francisco, though).

[Sammy Pepys]

15. There are incredible machinations going on in the economy.

But to quote Han Solo: "There's not one all powerful Force controlling everything." At least not when it comes to propping up the stock market.

The range of interests within the economy is so wide-ranging and disparate that any naked attempt to manipulate the markets would be terribly hard to conceal. On top of that, people just can't keep secrets.

[fasttense]

14. Yeah, according to the Sprott report that is exactly what is happening

"But, the Sprott report notes, frequent surreptitious intervention, conducted through intermediaries, the government's favored financial houses in New York, gives those intermediaries enormous advantages over ordinary investors. Frequent intervention, the Sprott report adds also makes it impossible to distinguish between national emergencies and political expediency.

The Sprott report concludes:

"Given the available information, we do not believe there can be any doubt that the U.S. government has intervened to support the stock market. Too much credible information exists to deny this. Yet virtually no one ever mentions government intervention publicly, preferring instead to pretend as if such activities have never taken place and never would."
http://www.ccnmatthews.com/news/releasesfr/show.jsp?action=showRelease&actionFor=554047

[Warpy]

12. Corporations buy back their own stock

if the price starts to drop rapidly. Well, that is if they haven't lavished enough on their top management to rival the GDP of a small country, leaving the company itself perilously close to bankruptcy so that the tax man will stay away. But yes, lots of corporations have propped up their own stock prices like this.

I don't think the entire market could be directly manipulated by any single outside concern. Even the large pension fund holders would have to get together to do so. The market is too big. However, consider that the market has been flat since Stupid took office. That is what his tax cuts to the super rich did, they propped up the market. The government in effect propped up a market that was overdue for a correction if you consider historical p/e ratios as an indicator of an overvalued market.

(Hey, you didn't think they were gonna HIRE us, did you? An increase in poor folks means a decrease in customers, and the rich aint in the welfare business)

[Roland99]

2. That's my gut feel. This admin is propping GDP numbers. >>>>>

The Truth about the GDP
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=364&topic_id=243843&mesg_id=243843

[Ready4Change]

6. Think of the stock market as a cars engine.

A. When you are cruising down the highway at 65mph (Stock Market at 10,000+) the engines just loafing along. Plenty of power left if you need to pass someone (go to war) or use the air conditioning (social programs.)

B. But if the engine is out of tune, there's less excess power available. Sure, you're still able to cruise at 65mph, but passing someone is a little chancier.

C. Now imagine the engine is more than out of tune. It's burning some oil, blowing some smoke, some of the spark plugs are misfiring. You can STILL maintain 65mph, but passing is a really risky proposition, and you've found you need to turn off the AC in order to climb long hills into the mountains, or else you lose speed.

D. NOW imagine the engine is severely damaged. You've got your gas pedal full to the floor. Smoke is billowing out the back, both from burning oil and radiator fluid from blown head gaskets. It sounds like the bathroom at a bad tex-mex restaurant, and you can only hit 65mph when going downhill. Passing is totally out of the question, and the AC hasn't worked in months.

What I mean by all this is that the Stock Market is not a good gauge of the strength of the overall economy. It is more a gauge of how effectively companies can extract money from whatever economy exists. At some point an economy can grow weak enough that companies abilities to extract money from it will begin to faulter. No matter how many tax cuts and shelters they are given, no matter how they are allowed to exploit their employees or transfer operations overseas, companies can't get blood from the stone of a dead economy.

Where we are on this scale varies according to whom you talk/listen. The WH thinks we are in condition A. WH critics contend we are in condition D.

Personally, I think we're currently in condition B but rapidly sliding into condition C. And the WH policies and attitudes are taking us by the shortest route straight to D.

[Sammy Pepys]

7. I like this analogy

Although right now I think it's more like having your foot mashed down on the accelerator, but then pulling off and coasting. On a completely flat, straight highway you might be able to cruise along time, but you're going to go up hills, down hills, and around turns on this one that you can't do anything about...it's part of the landscape...and you're going to lose some energy along the way. Every once in a while, you mash your foot down some more and pick up some speed, but you never keep it down long enough to actually maintain any appreciable speed or power. But youyr actually not coordinating those efforts with the terrain...you might be mashing the accelerator when going down hill, but not when up hill.

[RaleighNCDUer]

9. I believe we're at 'C'

and approaching the foothills.

We're running without AC, but the driver has rolled down the window and is exclaiming about the wonderful fresh air, telling us everything is fine.

The market on only ONE indicator of the strength of the economy, though the WH would have us believe it is the ONLY one. We have an unsustainable housing market, hidden unemployment, millions without insurance and a single illness, and a single paycheck, away from the streets.

The safety net has been shredded, but we're still doing triple somersaults 80 feet above the ground.

Have a nice day.

[RazzleDazzle]

11. I agree, and well said

[Warpy]

13. I look at the cuts in Medicare and Medicaid

and think we're at the bottom edge of C. The driver has whined about his gas mileage nonstop, has taped the AC switch in the OFF position, has the windows rolled up to increase fuel efficiency (it does, by a hair) and is smoking a big, green cigar while he tells us the air inside the car is comfortable and who the hell needs AC, it only wastes gas and it smells funny, too.

[Democrats_win]

8. Bu$h supporters try to push it up then it falls back to equilibrium.

That´s just from my observations.