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Plunge Protection Teams Of The World, Unite!
Submitted by Charles Hugh-SMith of OfTwoMinds blog,
The herd must be turned away from selling by any means available, and at this point, that means coordinated buying by all the world's Plunge Protection Teams.
Central bankers are watching Marx's dictum all that is solid melts into air play out in global stock markets with a terror informed by the scalding memories of 2008's global financial meltdown.
Once the trap-door opens, there is no bottom without prompt action by the world's Plunge Protection Teams--the plausible-deniability action heroes of the hyper-speculative status quo who leap into action when global stock markets threaten to melt down.
After half a decade of ceaseless saves, we all know the mechanics of Plunge Protection.
Since the majority of trading is now done by software programs (trading bots, algorithms, etc.), the first step is to create positive momentum so the bots will detect an "up day" and buy, buy, buy.
The easiest way to generate positive momo is to buy a truck load of S&P 500 futures in a time of low volume, where the impact will be the greatest. usually this is pre-market open.
If this fails, the next step is to send a central bank Talking Head out to discuss more quantitative easing. Announcing the central banks' readiness to do more of what has goosed markets higher for six years will generally spark a buying frenzy, as those who have bet against central banks over the past six years have had their heads handed to them on a platter.
If this fails, grandiose but purposely vague claims of "doing whatever it takes" are issued. there is no need to actually have a plan, or to lay out a plan in public; the open-ended announcement is generally enough to reverse a trap-door decline.
If this fails, it's now serious. The Plunge Protection Team must start buying equities. This is usually done by private proxies via dark pools or offshore accounts or by state agencies--investment funds, retirement funds, etc.
When things get very serious, the central bank can buy assets directly, and in such massive quantities that the markets are forced to respond appropriately.
If this fails, the last resort is a coordinated buying campaign by all the central banks, acting in concert. This last stand has a rallying cry: Plunge Protection Teams of the World, Unite!
Of course the PPTs of the world monitor key technical support levels, but what the PPTs are really monitoring is the dangerous sentiments of fear and panic. When the trap-door opens and the herd turns to selling, the entire six-year prop-job will crumble.
The herd must be turned away from selling by any means available, and at this point, that means coordinated buying by all the world's Plunge Protection Teams.
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Simon Potter for Overlord.
Hmm.... I thought we had Global PPT working overtime the last 8 years or so.
Nobody keeps the plates spinning like Simon does...
Where will the "market" close today?
Ask Simon... 212-720-6309; simon.potter@ny.frb.org
The PPT is worse than most conspiracy theories I hear, everyone agrees that manipulation in financial markets is bad. Yet this is their stated goal, and their existence doesn’t seem to bother anyone in the mainstream media. Just seems strange.
The mainstream media like CNBC is totally reliant on the very same banks that own the Federal Reserve Bank, for advertising and access to content. The FRBNY is the HQ of the PPT.
Who the fuck red arrowed this? Which of you assholes does not believe in the PPT or the Virgin Mary? You may think that you're a free man, but your ass belongs to The Hedge. We do not discriminate here; all trolls, morons, low IQs, idiots, shills and pretenders are treated equally.
My guess would be that the red arrow came from the CNBC inner circle or one of their fanboys.
I, for one, am grateful that ZeroHedge doesn't discriminate against those with low IQs.
Here, here!
I have noticed that the screen shifts sometimes when I go to uparrow and the damn thing records a downvote when that happens. If you hit the upvote a second time it erases the downvote and records an upvote.
Thanks for the tip!
Electronic voting sucks!
knucks, the trolls have been active lately......just sayin'
The PPT arrived at Euro close. The volume is the white rabbit.
Gosh! You mean that means that QE4evah is gonna be pursued vigorously by each and every central bank?
Whodathunk, Bitchez!
Nonsense, Pee Wee Herman for overlord, because the people deserve no less.....
You missed slam the hell out of the tvix... signal the receding fear and time to buy
I see the PPT is kicking it into high gear on stocks and trying desparately to cap gold and silver...
http://www.marketwatch.com/
http://www.kitco.com/charts/livesilver.html
Assholes are probably instructed to short the mother fucker down the rabbit hole.
The bulls balls are dangling over the hot coals.
Only the CP'ers can save us!
(edit: the central planners and not teh other CP'ers)
Yeah sure. THe central planners are printing our tickets for fun times at fema camps. Priority is job one. MOney will become useless as these butt sucking pricks made it.
Of course CB/governments will buy, eventually, if unchecked, equities, all of them. Equities are corporate-issued currencies. You can't have a monopoly on the issuing of scrip challenged by all this corporate paper flying around.
Whatever they are trying here at 2k, if anything, does not appear to be working. Usually I can see other legs on the intervention. I don't see them yet. Maybe they are waiting until 3pm again.
Likely strategy is to keep 2K in range for a last minute ramp.
did they forgot the vix slam
no they're on it...no worries
How many days do we have left, Doc?
You'd better hope enough to turn your bitcoins into something tangible and non-network-reliant.
Just sayin'
Yeah... how about a big "fuck that"? We will be buhing up your physical assets for a few satoshis....
Give it a shot after Obozo shuts down the net because of " terrorist threats'.....
Couldn't care less about your prez and what he does. We suspect teh rest of world's Bitcoiners have similar sentiments....
Of course your government wouldn't dream of shutting down any kind of activity they don't like.....
Yes, all of teh world's governments are going to get together (amidst a currency war, shooting war) and reach an agreement on crypto-currency, online math puzzles. Just like they get together and reach consensus on everything else all teh time. Keep dreaming....
I guarantee your government will do what it takes to hold power, whether or not the USA tells them to or not.....
Well teh best way to lose power is to unplug teh internet, ask Mr. Mubarak...
Dont forget the Chinese solution: make short selling illegal and jail some retail investors (not the OG banksters, mind you, but some 'unimportant people')
Is there a pool on which Fed talking head will soon appear?
Those who had Bullard win a sandwich!
Who the fuck would ever want to be holding paper going into these weekends ?????
Not me for sure, but there are tons of people I work with that are real big time cheerleaders.. I don't get it. Still clinging to their free and efficient markets void of any manipulation.
Can we get a link to Fonzie jumping the shark, please.
The World's Central Banks: Kinda like Voltron, except if the different parts weren't cyber lions, but poo.
Alright - all you fucking sellers and shorts are under arrest - bend over and spread 'em!
http://orig03.deviantart.net/ca4b/f/2009/325/d/5/acme_plunger_gun_by_loo...
Plunge Protection Teams Of The World, Unite!That's cool but ..... Doesn't that sound like distribution to you? Uno, instead of the dumb money buying while the smart money is selling and exiting, the so-called 'smart' money is buying. This is confusing but I quess that's the purpose. Better than a stampede????
Practially on cue, looks like the PPT finally got to work today. They're off their game, they should have gotten this fucker to open up 1.5%. Did they really think they could take the day off?
This plunge is all to get the BOJ to launch even more QE. You should be buying with both hands right now because this weekend all sorts of promises are going to be made by central bankers. We'll get one more push to new highs - 2138 on the SPX
Unleash the Bullard!
It they don't save it today with a low volume afternoon ramp - it was allowed to happen. They can move this market any direction they want once the volume dies down - and it will. Unless North Korea starts a war today we stay above 2000. The dow is already 90 pts off the lows. I want this fucker to crash too but lets be honest - retail is not involved in this. The market is a policy tool waved by .gov and their choosen front. Dow 100 points off the lows... gotta love buying without regard to price.
Really too late to do anything. It's options close for Aug!
Release the Kraken!!
I very much appreciate this site. It keeps me well-informed on this and other important issues, and does so with the right amount of humor (during those times when all we can do is laugh).
But, my strategy to deal with this crap remains the same. I'm getting out of debt (in a matter of months), stockpiling all sorts of metals, including Pb, but mostly precious metals. Odd and scary times, indeed. I look at my son's generation and I get extremely angry at the damage these people are doing to them.
-Argenta
you have been here for 6 weeks...we have been enduring this for the past 5+ years...perhaps this time it is different. Let us see.
To be sure, I have been involved in this discussion elsewhere and at entirely different levels than what I'm posting on this site for much longer than 5+ years but yes, let us hope this time is different.
-Argenta
And it's obvious that, after comparing Argenta's comment to yours, that the length of time one has "been here" on ZH doesn't always correlate to quality of the comments.
Obviously people interpret comments in different way and have no sense of irony. In no way was I making fun of Argentas comment. Hopefully he will not be sitting here for another 5 years waiting for this thing to finally implode. Was that better? Did it help unmask the hidden irony?
Wonder Twin Powers, ACTIVATE. Form of, Liquidity (aka Urine). Form of Helicopter.
Looks like we got us a rescue. Markets 'green by noon' (PDT)
The second half of the big shitty looks to be here.
Wells Fargo on CNBC just said go to cash for 6-8 months. Those prudent here that hedged and tried to educate: This is not the time now to gloat, be arrogant, etc. Let's show the world people here have class.
Innovators your going to get opportunities in a year or so. Hang tight, get your plans and research in place. Use the phone! Call boards with there market problem and there solution.
Offer consulting for short-term revenues. If your not good at sales buy "How to Master the Art of Selling."
Software like Business Plan Pro can get you aquatinted with writing plans. It walks you through it. Google the terms you dont know.
You can often attend Angel Groups or Networks in your area if you start a plan and ask them to just observe. Do this for six months if you can.
Mingle after or before innovator presentafions.
Buy one good suit and a nice pair of shoes. All this can be done for about $700 bucks including your gasoline.
You should be able to pitch investors and executives in ten minutes why they should give you dough. Act like it is YOUR money your asking for and mean it. A large number of companies are hedged and have LOTS of dough.
A lot of people will wake up based on seeds you planted. The market is normalizing after 15 years of a financialized economy. David Chanos summarized this position nicely this morning. He is on CNBC.
Lots of truth telling today. Love it! Hate that a lot of people are getting hurt globally right now. At this point, I can know give them some real hope.
Emerging leaders need to show you abilities and lead now. Take care of one another.
This article fails to mention the other half of the PPT duties... keep a lid on PM's
And ironically, all of the above is precisely what scares you into selling because all fear of market pricing does is scream that equities are not worth their valuations. Trying to make something worth what it is not by fiat is an exercise in futility. The Fed could also print up 1.5 billion dollars and buy a hundred million copies of Loudness' Thunder from the East, but nobody would even remotely consider them the greatest music act of all time. But because of PPT and ETFs I don't see how Dow 6000, or 10,000 for that matter, could ever happen again. Exchanges shut down for good at Dow 14000 if necessary. They'll wait just like they're waiting for somebody to buy the 1600 sf shoebox in Eagle Rock I sold that British guy for 680K 2 yrs after I paid 324K for it who let it get foreclosed on. In this job market Its gonna be a long wait.
Looks like the big shitty is here. First time I watched CNBC for more than two minutes for sever years. Lot of truth telling coming out.
Show some class and don't gloat. David Chanos fund is killing it but watch his dry behavior when his recent interview a few minutes ago comes out.
Time to step up and demonstrate some leadership skills and assist corporations to innovate.
Pick up the phone and call boards. Be relentless as a motherfucker and take some short-term dough in consulting if nothing else. They are loaded with cash the megacorps. Go be a lion, give a value proposition and be prepared for a large meal in a few short months.
I waited fifteen years for mine and my mouth is watering. Don't be sick fuckers and celebrate the suffering.
They may try to sell this as the 'long anticipated' correction. So, once everything is down 10-12% then they will go back in with a vengeance. Maybe not though, who knows. I think all the CB's and TBTF's have way too much leverage in the markets right now so either the Fed craps some more QE or the losses from this and more will hit their books. This could also be the TBTF's sending the Fed a message of what will happen if they don't continue with ZIRP and QE. Basically a form of blackmail. Interesting times.
The Citadel can and will do all that is asked of them. Bernanke has made sure of that!
Inventory of pixie dust is low.
The inventory of Pixie Dust is in very short supply.
To see the reality - just look at the huge problems that Europe has had ... trying to bail out Greece. That is ONE SMALL COUNTRY. One country!!
And you really believe that this thing stops at Greece? No chance. Bankruptcy is bankruptcy... at a corporate level, and at a national level.
The DAY that the Fed started this "massive bailout" philosophy, a number of folks (incl. me) called the policy for what it was .. complete BS. That was 7 years ago! By instituting a Bailout Mentality the global central banks have made themselves the last backstop of the entire Global Derivatives scheme. It is undoubtedly the most reckless banking decision that has ever been made ... and the Fed has a key role in it. Now they are starting to reap the fruit of this mindless thinking. I have no sympathy for them.
Don't gloat too much fellow hedgers. Show class and leadership now. Megacorps are sitting on lots of cash. Help them innovate. Don't waste much time on vanity. Bring a value proposition and go be a lion.
Thats right. Forget the Constitution. Import more illegals , print money, hand it out, create a lower "middle" class. Fit policies to the illeagals lower living standards and expectations.
Whatever it takes. Be a lion, Janet Yellen.
got out last friday! that worked out nicely... :D
The herd must be turned away from selling by any means available, and at this point, that means coordinated buying by all the world's Plunge Protection Teams.
What herd are they talking about in this read?
The only "herd" is the banks themselves! The little guy has been liquidating for the last 4 years when the lines were drawn and their were no other safe havens other than the "hall of mirrors" they build for us, the market(s) and holding $$$..
Remove that second leg after what China did a week ago and this stool only has one leg left!
Hope your seat is comfortable following the free yoga and acrobatic lessons you'll need to stay on it!!!
This is the start of a major Bear Market. Expect 4-6 months, but could be as long as 9-12 months. Two days of losses on the Dow Jones - don't even begin to describe where this market is going (DOWN). There is no point in throwing money at any company, until you see if they will even survive the 2015-2016 Recession.
One essental point ... and there are many... is that the are NO consumers left to drive a global recovery. US consumers were tapped out a long time ago. Americans have been throwing MORE charges on their credit cards, and taking on long-term auto loans. This behavior will come back to bite their butts during this Recession.
Growth in China has hit the skids. Chinese traders are trying to BAIL OUT of their own stock market faster than the traders in America. There is no recovery from the "great growth engine of China" this time. It's a myth.
THAT'S THE POINT. The world has run out of consumers who can spend. It is not possible to "innovate" when you have no market to sell to. If we had a Free Market Economy, then the pricing of goods and services would eventually adjust - accurate prices might reveal where new opportunities will be. BUT WE DO NOT HAVE A FREE MARKET. Because the Central Banks policies have wrecked the pricing.
You can begin to appreciate the darkness of the tunnel that we are entering.
PrimalScream - We understand it's the big shitty. I waited 15 years for this time. There is PLENTY to "innovate" for a bunch of people. Lots of companies instantly needing solutions. Now we can help one another.
What do you think some of us were doing here educating ourselves how the world worked for years, banking model, human behavior discussions and politics. Playing with our balls? What you think the pain didn't wake up a few of us small fry up?
No I am not in the 'weaker hands' club. Yes I learned to keep my mouth shut while I waited.
I am encouraging the other small fry that didnt play with there balls and made plans to go have a nice munch like a good waiting lion, just add value and avoid bad tudes with your customers. Be ready to serve and get paid a lot if you have market solutions.
Keep your business plans nice and short fellas. Executive summary, one diagram, two supporting articles and one simple diagram especially if your in tech. Pick up the phone and call boards now relentlessly at Megacorps if you have market solutions for the big shitty.
Raging Debate - It's OK. My remarks were not personal. I don't get involved in tit-for-tat. Everyone is free to make their own investment decisions. I was simply pointing out that there is a real possibility for a Bear Market at this time. We will see ... what the market does!
Everybody has a plan until they get punched in the face - mike tyson
I just love it when a plan comes together - Hannibal from the A Team
wonder who is buying this dip? It's a lot like trying to catch a falling safe from the top of the Empire State bldg.
Barney - May buy a couple stocks I have been eyeballing for a while but may as well wait a short while and see if we get a dead cat bounce.
Barney - May buy a couple stocks I have been eyeballing for a while but may as well wait a short while and see if we get a dead cat bounce.
Mistah Hugh Snith - It is a situation of their making. The Central Banks created this "necessity" to print fiat and buy assets. That is their crime against humanity.
The Plunge Protection team is a fait accompli. Marx knew his people well.
The plunge protection teams, should indeed unite soon, as technically, on August 20, a primary bear market has been announced:
http://www.dowtheoryinvestment.com/2015/08/dow-theory-update-for-august-...
While nobody knows the future, technically the markets is very vulnerable right now.
nice to see someone still doing Classic Dow Theory. It is often abused by people who are not patient and do not analyse the signals consistently. But it is valuable when done well!
August 21, 2015
Rome, Italy
I grew up in Texas in a middle class household to two very hard-working parents.
And to say we were middle class may even be a stretch. We were definitely clinging to the bottom rung of middle class.
Money was always a problem. And my parents each held multiple jobs in addition to making a go of their own business in order to make ends meet.
I never missed a meal. But the constant stress and worry about how we were going to pay the bills that month was palpable.
We didn’t have medical insurance or any savings, meaning we were just one illness or urgency away from being wiped out.
There always seemed to be too much month at the end of the money. So every penny mattered.
We didn’t buy anything unless it was (a) necessary, and (b) a major bargain.
Things eventually got better, as they tend to do. My parents found their financial footing and became more successful. And I’ve done well in life.
But I’ve taken those middle class values with me into the world, and they’ve deeply impacted my own investment ethos.
Just like what was drilled into me when I was a kid, I can’t stomach overpaying for anything. Even when investing, I’m only interested in a major bargain.
This happens occasionally in investment markets, though it’s extremely rare today.
There are plenty of profitable, well-managed companies out there. But they’re incredibly expensive. Twitter, for example, has a valuation of $17 billion. Yet it lost nearly $600 million last year.
Netflix manages to grind out a profit; but the company is valued at more than 200 times its earnings.
AirBnB is a private company. Yet its value is at least $25 billion even though it doesn’t own a scrap of real estate or turn a profit.
These all strike me as extremely expensive. And ludicrous.
But it’s unfortunately the norm these days.
Most financial assets are in major bubbles, whether it’s real estate (yes US housing is at that point again), stocks, bonds, private equity, etc.
So it’s very difficult for anyone with middle class values to invest... unless you expand your thinking to the whole world.
There are pockets of value out there if you look hard enough-- like mining companies and developing markets.
Let me give you an example of something that I bought recently, and talk you through my thought process. As a caveat, I should tell you that I generally dislike stocks.
Stock markets are a rigged game designed to extract wealth from the little guy and put it in the pockets of investment banks and high frequency traders.
So for me to be interested, there better be some serious value on the table.
Royal Dutch Shell, one of the world’s largest oil and gas companies, is a good example.
Thanks to the slide in oil prices down to $40 (and perhaps lower), Shell’s stock price has been hammered.
So the company is trading right now at the value of its net tangible assets.
In other words, by buying Shell stock, I’m purchasing every asset the company owns at COST.
Yet on top of that, they pay a 7% dividend yield.
In real estate, it’s like being able to purchase a beautiful house in the best part of town at a price that barely meets the cost of construction.
And on top of that, there’s built-in rental income that starts putting money in your pocket right away.
This is a solid deal in my mind, especially for a company that has a long-term history of consistently growing its dividend yield.
(By the way, I can reinvest the dividends that they pay me into more shares, so I’ll be continually adding to my position over time.)
The added benefit is that Shell is not a US company.
I bought the stock overseas (I’ll explain why next week) and paid in British pounds.
So I could make money off the dividend. Or if the stock price goes up. Or if oil prices go up. Or if the pound appreciates against the dollar.
That’s one of the primary benefits of investing internationally: there are a LOT of different ways to make money.
And it makes a ton of sense to do this now that the dollar is at a 10+ year high against nearly every major currency out there.
(Again, developing markets are looking especially cheap, and I also bought into some of them as well, including Russian and Colombia.)
To be clear, I’m not recommending that you follow me into this.
It’s entirely possible that Shell’s stock gets cheaper. In fact, I’m expecting it. I also expect it will stay cheap for a very long time.
I just have the willingness to wait, because I know that it’s hard to lose when you buy profitable assets so cheap. Plus, Shell has seen worse in its history.
During World War I, for example, German forces wiped out over 20% of Shell’s production capacity.
So I’m confident they’ll be able to weather $40 oil without collapsing.
Have a good weekend,Simon Black
Founder, SovereignMan.com
Ha ha ha. So Simon Black owns lots of Shell stock, bought on credit and is now deep in shit and going to have to sell his house, shirt and girlfriend when the margin comes to be paid. Thanks for the tip Simon, I'll short Shell right now! Post a photo of your girlfriend and let us know when the bidding starts!
It's just natural ... Gravity is natural!