Public Heel....
We are in disagreement on the PPT, but that is fine - I have my convictions on the subject based on my personal observations in the markets (and other things, like some comments from Fed meeting minutes), and you have your own.
As for the mechanics of PPT intervention, it is easy - the Fed and/or the Treasury Dept. provides the funds (your basic bottomless pit) and give it to firms or institutions with instructions to buy the market with a view of starting or sustaining a rally. Note that a number of the members of the Working Group on Financial Markets (the PPT) are also major market makers in the markets, able to execute their own trades (C, JPM, GS, MS, and MER) so the execution of the intervention is both direct and easy. There are many other ways this could be done, including placing orders with foreign firms to accomplish the same thing with complete anonymity.
From comments made during the initiation of these forays into the markets, GS seems to be the lead in most of them, and if you remember CNBC (and some of its floor trading guests) has often commented on those days about "the very large buy orders from an unknown buyer in the index futures that turned the market around today." Frequently, GS has been the shop that handled the "unknown buyer", although MS has also been involved. It is no coincidence, and "da boyz", while a very powerful and real influence in the market, does not have the risk capital to step in front of a moving train of a market collapse where a mistake in judgement could put them out of business - only the government has the resources to take such a risk and do whatever it takes to turn the market around.
That is certainly not to say that "da boyz" do not participate and profit from the PPT actions. They are the first to see the PPT move in and are best equipped to turn on a dime from sellers to buyers, covering their shorts and going long. This drives the markets even higher and causes more short covering, which gives the "rally" legs, although the PPT usually has to goose the market a few times to show it is serious. Once the short covering gets going, the mo-mo players move in to run the shorts even more and the artificial rally becomes real.
All I can tell you is that from a perspective of having done this for over 30 years (starting as a Merrill broker then a office manager and VP another firm), I have seen enough to absolutely convince me that the PPT is both real and actively intervening in the markets. I even tend to agree with the general logic behind it, although I question what they are doing at the moment unless they know some very bad things that we do not, which is certainly possible.
Good luck to you.
mlsoft
AI
