Here's what the Plunge Protection Team does in markets

[mgray]

Take a good look (http://wp.me/ppklu-el) at US equity futures the past two trading days.

While the global exchanges sold off, US futures soared 200+ points.

[bearcow]

they have already invoked rule 47 this morning, my online brokerage is not working as well. Fortunately their mobile site works

my guess, we should be red today at the close

[A Voice from the Mountains]

I don't know what rule 47 is and I've never heard the term "plunge protection" but I already figured this was what was happening, and the markets are obviously rigged anyway. But in light of the relative high of the market previously, and all of the global economic problems, and people saying this is a "correction," who in the hell would be spending so much money buying stocks now?

[Matt P]

I don't know what rule 47 is and I've never heard the term "plunge protection" but I already figured this was what was happening, and the markets are obviously rigged anyway. But in light of the relative high of the market previously, and all of the global economic problems, and people saying this is a "correction," who in the hell would be spending so much money buying stocks now?

Markets are completely rigged, yes. It is my understanding the best investors buy low when everyone else is selling and sell high when everyone else is buying.

Matt

[A Voice from the Mountains]

Markets are completely rigged, yes. It is my understanding the best investors buy low when everyone else is selling and sell high when everyone else is buying.

Yes, that's the general idea, but lately the markets have been relatively high (artificially), until recently. Even as they fall, it's pretty clear they haven't hit the bottom yet, and when they do, it may take a good while to reach where they have been inflated to. So the fact that people would be buying a bunch of stocks as they're beginning to fall hard but are not yet that low does not seem very intuitive to me. People buying right now might as well be saying, "Here's my money, you guys can have it!"

[Rocky_Shorz]

So rule 48 reversed panic trades, what does 47 do? Prevent selling?

[Octavusprime]

Sounds like someone is trying to prop up the economy. We'll see if it works pretty soon.

[rgray222]

I believe that this entire market volatility stems from one thing...Quantitative Easing. Over the last six years Obama has pumped through the Federal Reserve over $5 Trillion into the market. This has not only created the largest wealth gap in the history of the world, but it has stabilized the market in ways that we have never seen before. The market should not be stabilised, it should live and die on its own merits without government intervention.

The pundits have been talking about China and the price of oil causing the market crash but the Fed announced that they were about to stop the quantitative easing program. That one announcement caused the market to drop like a rock. When the Fed saw this they later announced that they were not ready to stop the QE program. The market immediately rebounded. I believe we will see massive swings in the market between now and the next election. The market has already started to price in the loss of the QE program so when the official announcement is made it will be a nonevent.

Obama will go down in history as the president that has been the most pro wall street in the history of the country. Of course, he speaks terribly of wall street but he has increased the number of banks that cannot go bankrupt from 4 when he took office to 11. He allowed banks to take billions of TARP and Stimulus money and much of it will never be paid back. He publicly demonized the bankers but did virtually nothing to punish them for the cavalier behavior which caused the economy to crash in 2008.

Obama absolutely will not leave the QE program in place for the next president. It has to go and now that he set this in motion we can expect to see withdrawal symptoms like we have never seen before. If you in the market fasten your seatbelt.

[mgray]

The market turned up 600 puts on NY Fed chief Bill Dudley (ex-Goldman Sachs director) saying a September rate hike is off the table.

Meaning 3 more months of cheap money. Dudley is the last of the rate hike Bulls to concede, so market soared on the news.

It doesn't change the fact that we are entering a global recession, which is why China and crude oil are still selling off.

[cursichella1]

...NY Fed chief Bill Dudley (ex-Goldman Sachs director)...

That's says it all.

[Pam]

Mgray, you stated on your website that you suspected the interest rates were rising due to the Chinese dumping treasuries to finance buying equities to prop up the market. Do you think this may be a desperate act to prevent total economic breakdown in China, or is this kind of thing done more frequently then what we are aware of?