Is “Plunge Protection Team” a Myth?
When Congressman Alan Grayson asked this question, Bernanke said in a written statement, “No!”
But a lot of market participants believe that the government does in fact intervene in markets in many overt and covert ways, one of which is to buy S&P futures. CNBS guys debunk this. [This via Zero Hedge]
A highly amusing exchange occurred earlier on CNBC when guest Damon Vickers of Nine Points Capital had an unexpected moment of truthiness and turned some heads when he said that “unless the plunge protection team comes in over the next couple of days, the markets are looking very dicey here.” When a disgusted Joe Kernan asks if Vickers was making a joke about the PPT, the response is “absolutely not – it’s common knowledge that the government steps in and does things to step on the gas and buy stock here and there.” To which Byron Wien has a strong retort: “I don’t believe it.” All that and much more in the clip below. In the meantime, the market is sure having a field day with stocks as once again bad news are discarded and the smallest glimmer of positivity serves as a springboard for yet another ramping short covering spree.