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Realtraders,
The only thing this Team will be able to plunge are the toilets that will
be filled after the collapse. After years of seeing currency intervention
fail, my bet is that the "plumbers" are fighting a losing battle. Why
doesn't someone jump in and explain the "year end" (Oct. 31) tax loss
selling that we about to see from the funds? Short now, buy Nov. 1. Trick
or Treat?
Steve Karnish
CCT
----------
> From: dbtg <dbtg@xxxxxxx>
> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> Subject: Re: [Doom and Gloom Dow Industrials Forecast]
> Date: Wednesday, October 14, 1998 2:44 PM
>
> There's another article in the NY POST on Oct 12.... guy says the PLUNGE
> PROTECTION TEAM was in there on Thursday....
> >
> >New York Post-October 12, 1998
> >
> > MARKET-RIGGING: SHORT-TERM FIX, LONG-TERM DISASTER
> >
> >By JOHN CRUDELE
> >
> >THANK goodness someone has finally decided to rig the stock market.
> >
> >With the impeachment process in motion and Ken Starr confirming my
> >exclusive of a few weeks ago that there are more impeachable offenses
> >being looked into, someone had better take action to rig the market
> >before the political crisis turns into an economic one.
> >
> >My bet on the rigger is Washington, probably through something that the
> >Washington Post last year called the Plunge Protection Team. That's a
> >group of financial big shots from the Treasury, the Fed and Wall Street
> >whose stated job is to keep the financial markets from collapsing - as
> >evidenced by Thursday's dramatic turnaround and Friday's 167-point
> >gain.
> >
> >But the prop under the stock market could just as easily be coming from
> >Wall Street firms, with the blessing and assistance of the Federal
> >Reserve. That's not so preposterous, considering these very firms -
> >with
> >the Fed's blessing - had to step in a few weeks ago to protect the
> >financial system from the mess created by the Long-Term Capital hedge
> >fund.
> >
> >But there are right ways to rig the market and there are wrong ways.
> >There are also legal and illegal ways.
> >
> >As it turns out, the right ways, or the effective ways, at the present
> >moment also happen to be the illegal ways.
> >
> >The wrongheaded and ineffective way would be to continue to try to
> >correct the current stock market downturn through things like interest
> >rate cuts.
> >
> >First, I'll tell you how the stock market is being rigged. Then I'll
> >tell you what's even more important - what's going to happen in
> >Washington and why you should get out of stocks before this rigging
> >adventure leads to disaster.
> >
> >Here's some history:
> >
> >Back in 1989 a Fed governor named Robert Heller proposed rigging the
> >stock market. Heller had just left the Fed when he gave a speech
> >suggesting that the central bank should step in and take direct action
> >to keep the stock market from collapsing.
> >
> >The Fed had taken action before. It made sure there was enough
> >liquidity
> >during the crash of '87 to keep the system going. It may have even
> >strong-armed a few banks into propping up the market. And it has often
> >lowered interest rates at opportune times.
> >
> >But Heller's idea was different.
> >
> >He wanted a more direct approach, especially when the bond and currency
> >markets were becoming uncontrollable (like they are these days).
> >
> >Heller believed that in an emergency, the Fed should start buying stock
> >index futures contracts until it managed to pull stocks out of their
> >nosedive.
> >
> >Essentially, whenever there is heavy buying of these futures contracts
> >it causes the underlying stock market to rise. The futures contracts
> >can
> >be bought cheaply; they are highly leveraged so you get more bang for
> >each buck, and they eliminate the need for a rigger to purchase, say,
> >all 30 stocks that make up the Dow. Heller explained that the process
> >was simple. And it is.
> >
> >The trouble is, the government never has had authority to rig the stock
> >market.
> >
> >But there are indications that this sort of rigging works, at least for
> >awhile. Hong Kong authorities rigged their stock market last month when
> >selling pressure became too great. That government did it openly and
> >proudly.
> >
> >How do I know the market is being rigged?
> >
> >I really don't. But I am very suspicious.
> >
> >Take last Thursday, when the Dow was down more than 200 points and the
> >House was passing a resolution to investigate the President of the
> >United States. Exactly when the debate was going on in Congress, the
> >S&P
> >500 futures contracts shot up in price like someone needed a market
> >rally awfully bad.
> >
> >A noble effort. Maybe even a necessary one. But let's keep this to
> >ourselves. If the rest of the world found out what was going on they
> >might want to find some other place to invest.
> >
> >The U.S. is likely to need a lot more market riggings in the months
> >ahead as more of Starr's findings come to light.
> >
> >The bottom line?
> >
> >Washington is going to have to perfect its market rigging technique.
> >Make it a little more subtle. Perhaps start at 2:35 p.m. in the trading
> >day rather than always at 3 p.m.
> >
> >And do it in a hurry - the next big explosion in the Starr
> >investigation
> >of the President will probably come soon after the elections.
> >
> >But if you're an investor who doesn't trust the government to pave your
> >street much less protect your portfolio, it's time to skedaddle.
> >
> >---- End Forwarded Message
> >
> >
>
>
>
> -----Original Message-----
> From: charles meyer <chmeyer@xxxxxxxx>
> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> Date: Wednesday, October 14, 1998 4:27 PM
> Subject: Re: [Doom and Gloom Dow Industrials Forecast]
>
>
> >Earl and All:
> >
> >There was an article about that titled--get this--"Plunge Protection
Team"
> >about Fed intervention during the little crash last October.
> >
> >Charles
> >
> >----------
> >> From: Earl Adamy <eadamy@xxxxxxxxxx>
> >> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> >> Subject: Re: [Doom and Gloom Dow Industrials Forecast]
> >> Date: Wednesday, October 14, 1998 2:55 PM
> >>
> >> IMHO, the Fed's been getting practice - I've seen at least 4 days
since
> >Sept
> >> 1 where the Fed's footprints appear to be all over the intraday
charts.
> >When
> >> the spoo runs up 30 points from a pivot low in an hour with zilch
change
> >in
> >> a/d issues and a/d volume, it's a reasonable bet that the Fed's been
> >> supporting the market by buying futures - far cheaper/easier to do
than
> >> buying stocks. I think this is intended to keep the shorts from
getting
> >too
> >> aggressive.
> >>
> >> Earl
> >>
> >> -----Original Message-----
> >> From: steven poser <swp@xxxxxxxxxx>
> >> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> >> Date: Wednesday, October 14, 1998 9:22 AM
> >> Subject: Re: [Doom and Gloom Dow Industrials Forecast]
> >>
> >>
> >> >Mitch -
> >> >
> >> >That is a point worth noting, but outside of this list and those that
> >> >follow the astrology guys, I do not think everybody else is truly
> >> >looking for the capitulation trade on Black Monday's anniversary.
Though
> >> >Acampora downgraded his targets, many of the big street technicians
> >> >believe that we have put in a bottom for at least another month.
> >> >
> >> >The other thing to be aware of is that if the market does blow up by
> >> >500-1000 points in a day, it will require some action from the Fed to
> >> >make people stick their feet in the water. Every try catching a
falling
> >> >knife? People will not just jump in without a good reason. How many
> >> >times have you said that you will buy when something gets to a
certain
> >> >level, and then did not (unless you are real disciplined or already
had
> >> >the trade in, or were smart enough to be short into that level).
> >> >
> >> >I do believe that the capitulation trade will be met with a rate cut
and
> >> >that a bottom will be in soon, but I would not count on the views in
> >> >this forum as being universal.
> >> >
> >> >Steve
> >
>
>
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