Hey buyittradeit, yes the PPT exists
really, and have been doing their job, which at times has been very frustrating, at least to me. It's just been less and less effective lately, even with more and more money thrown around.
Many people, like Kevin Phillips have writen some about the history of the PPT - check out his latest book "Bad Money". But, basically, before Alan Greenspan, the internet, CNBC, Bloomberg TV, etc. the Fed was an even more secretive entity inside the beltway, actually many federal agencies were back then.
After the 1987 crash, President Reagan established the President's Working Group on financial markets. The Plunge Protection Team was the nickname given the group. The group consisted of then newly appointed Greenspan, Treasury Sec Jim Baker, and the rest of the usual suspects.
Some of their "secret" operations were rumored included buying S&P futures on certain down days, etc. and is where the nickname originated.
On the present team: Bernanke's "creative" operations over the past year either coincided with or were independent of his late rate cuts and/or with now more recent large scale plans like with Paulson and the $700 billion bailout (actually $810B+)they got Congress to approve. Or even more recent like the Fed's $600 Billion MMIFF program several days ago regarding CD's and CP in order to prevent more plunges.
The current Working Group is now often casually mentioned on the Nightly News and you'll often see video of Bush, Ben, Hank the Hammer, and company in the cabinet room.
But, all their operations and all their money, so far, can't stop this market from unwinding, and at a quickening pace.
Today was the first limit down day we've had during this mess. We've still not had those other halt measures mentioned in your linked post on the NYSE. Thanks to the PPT. But, overall, by percentage, the drop over the last couple of weeks or month works out to be the steepest drop in history on a medium timeframe, a larger decline than any other "crash" including 1929. In the end, in some ways, it's more or less the same as if it came in one or two days. Some real damage has been done.
At this point, this market is going to go to about the same place it needs to go, regardless of the PPT. Granted, their larger reactionary measures will have some effect and help next year. But, their response is all coming late.
It's too bad that's how Washington works. Katrina and other examples are the same. Everyone knew for decades of the problem in New Orleans, nothing serious was done to address the real problems. After it hits, is when DC deals with it, with far more costs than anything preventative.
GL.
