Monday, September 12, 2005

Manipulating the markets

The visible hand
It is acknowledged that the bond and currency markets are influenced by policy-makers, but equities are considered different territory altogether. Current mythology holds that share prices rise and fall on the basis of market forces alone.
Such sentiments appear to be seriously mistaken. A thorough examination of published information strongly suggests that since the October 1987 crash, the U.S. government has periodically intervened to prevent another destabilizing stock market fall. And as official rhetoric continues to toe the free market line, manipulation has become increasingly apparent.
Some of these interventions have apparently occurred with the active participation of selected investment banks and brokerage houses. In this regard, evidence from credible sources, including a former top adviser to President Clinton, appears to confirm the existence of a so-called “Plunge Protection Team” (PPT). This group is not simply the figment of creative imaginations, and we are not alone in this conclusion.