What exactly is a "Plunge Protection Team"

[frayne]

And why do we need it now, asking for a friend !

 

[COcheesehead]

I think it’s like water wings.

 

[audreyh1]

It was supposed to be a big secret!!!!!

 

[CaptTom]

I read an article quoting the usual unnamed "insider" as saying that Trump asked if he'd be blamed for the bear market, and was told "yes."

Clearly, it's better to be seen doing something, rather than doing nothing. For once, he's acting like a typical politician.

 

[Bestwifeever]

Treasury secretary called top U.S. bankers on Sunday amid an ongoing rout on Wall Street and made plans to convene a group of officials known as the "Plunge Protection Team." .... The group, which was also convened in 2009 during the latter stage of the financial crisis, includes officials from the Federal Reserve as well as the Securities and Exchange Commission.

https://finance.yahoo.com/news/u-treasury-secretary-convenes-calls-220937973.html

Well, if that reference to 2009 doesn’t inspire confidence, maybe they should wear capes as they try to unring the tariff bell.... Plunge Protection Team to Mnuchin: hey, don’t put us in the middle of this mess

 

[MRG]

https://finance.yahoo.com/news/u-treasury-secretary-convenes-calls-220937973.html

Well, if that reference to 2009 doesn’t inspire confidence, maybe they should wear capes as they try to unring the tariff bell.... Plunge Protection Team to Mnuchin: hey, don’t blame us for this mess

What a brilliant idea. The capes are a great idea. They could be the SuperPlungers! Why I feel better already knowing Cape wearing people are talking. Nobody needs to get me anything else for Christmas.

 

[Spock]

People have laughed at zerohedge as being paranoid for frequently alluding to a secret "plunge protection team". In the last 24 hours the term is now splattered across Reuters and nasdaq.com.

 

[Closet_Gamer]

Countries like China actively intervene in their markets (not that it works well). Trump is fond of those heavy handed kinds of approaches.

He doesn't have many actual tools at his personal disposal so as far as I'm concerned this is just theater.

Unhelpful theater in my estimation.

 

[Bestwifeever]

What a brilliant idea. The capes are a great idea. They could be the SuperPlungers! Why I feel better already knowing Cape wearing people are talking. Nobody needs to get me anything else for Christmas.

Here’s one of the Plungers going to a meeting now!

 

[Spock]

Countries like China actively intervene in their markets (not that it works well). Trump is fond of those heavy handed kinds of approaches.

He doesn't have many actual tools at his personal disposal so as far as I'm concerned this is just theater.

Unhelpful theater in my estimation.

Japan: The BOJ now owns 77.5 percent of Japan's ETF market, having bought nearly 23 trillion yen of the product since 2013,
https://www.reuters.com/article/us-...f-buying-sees-no-near-term-exit-idUSKBN1O602Q


Switzerland: https://www.nasdaq.com/quotes/institutional-portfolio/swiss-national-bank-913041


More general: https://www.linscomb-williams.com/central-banks-are-buying-stocks/


Yup... "free markets".

 

[target2019]

Plunge Protection is a prophylactic approach.
When it doesn't work, take one in the morning and call me...

 

[RenoJay]

Heaven forbid the govt. focus on the real economy and let the stock market find its own natural level where supply meets demand.

 

[Spock]

Interesting twist or dots that I never connected... The "Fed Put" also fits into the plunge protection team definition
https://en.wikipedia.org/wiki/Greenspan_put

 

[joeea]

I read an article quoting the usual unnamed "insider" as saying that Trump asked if he'd be blamed for the bear market, and was told "yes."

If one takes credit for the ride up, one should expect credit for the ride down.

Clearly, it's better to be seen doing something, rather than doing nothing.

Is it? Does it matter what the something is? Or are completely useless somethings equally better?

Read this: https://www.theatlantic.com/ideas/archive/2018/12/whats-behind-steve-mnuchins-press-release/578968/

My best guess is Option One. I hope I'm right.

For once, he's acting like a typical politician.

I would never use the term "typical".

According to https://www.cnn.com/2018/12/24/investing/stock-market-today-dow/index.html the plunge protection team members who got the Treasury Secretary's call, were "totally baffled by the session". That worries me.

To make this question actionable - in light of the Treasury Secretary's decision to call this "protection team" and release a memo assuring us all that the banks have sufficient liquidity, how should we investors react?

Should we feel reassured that everything is fine and do nothing?
Should we start to worry about bank liquidity?
Should we look for places other than US banks to store our assets?

 

[target2019]

From the Atlantic article:

"The markets have been suffering from something like a nasty cold of late, with a major correction in stock prices due to rising interest rates, trade tensions, the government shutdown, and slowing global growth."

That seems more like bronchitis, meaning more serious than a cold.

 

[Spock]

If one takes credit for the ride up, one should expect credit for the ride down.


Is it? Does it matter what the something is? Or are completely useless somethings equally better?

Read this: https://www.theatlantic.com/ideas/archive/2018/12/whats-behind-steve-mnuchins-press-release/578968/

My best guess is Option One. I hope I'm right.


I would never use the term "typical".

According to https://www.cnn.com/2018/12/24/investing/stock-market-today-dow/index.html the plunge protection team members who got the Treasury Secretary's call, were "totally baffled by the session". That worries me.

To make this question actionable - in light of the Treasury Secretary's decision to call this "protection team" and release a memo assuring us all that the banks have sufficient liquidity, how should we investors react?

Should we feel reassured that everything is fine and do nothing?
Should we start to worry about bank liquidity?
Should we look for places other than US banks to store our assets?

Either SoT is clueless (not a low probability with the clowns running the circus)
Or he's worried about stuff like banks not finding investors to buy the leveraged buy out loans, stranding them on bank balance sheets:
https://www.zerohedge.com/news/2018-12-22/loan-market-freezing-bank-fail-sell-16-billion-loans

 

[aja8888]

What a brilliant idea. The capes are a great idea. They could be the SuperPlungers! Why I feel better already knowing Cape wearing people are talking. Nobody needs to get me anything else for Christmas.

Maybe these team member can take a jump off a tall building in unison to see how well those capes and super powers work!

 

[Bestwifeever]

Either SoT is clueless (not a low probability with the clowns running the circus)
Or he's worried about stuff like banks not finding investors to buy the leveraged buy out loans, stranding them on bank balance sheets:
https://www.zerohedge.com/news/2018-12-22/loan-market-freezing-bank-fail-sell-16-billion-loans

Mnuchin posted his reassurance tweet from a nice beach in Mexico, so the cluelessness is pretty much a given.

 

[Alan]

Thanks folks but this thread is far too political and snarky.