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DOW JONES     THE PLUNGE PROTECTION TEAM INTERVENTION RISK INDICATOR (mart.j)

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mart.j     posted : 08/05/10   03:25 pm


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THE PLUNGE PROTECTION TEAM INTERVENTION RISK INDICATOR
by Robert McHugh, Ph.D.
March 6, 2006


For the past several years, we have seen repeated �out of the blue� short-covering rallies just about the time a decline seems to be gaining some momentum. Our suspicion has been that the �Working Group� established by law in 1988 to buy markets should declines get out of control has become far more interventionist than was originally intended under the law. This group has since been dubbed the Plunge Protection Team. There are no minutes of meetings, no recorded phone conversations, no reports of activities, no announcements of intentions. It is a secret group including the Chairman of the Federal Reserve, the Secretary of the Treasury, the Head of the SEC, and their surrogates which include some of the large Wall Street firms. The original objective was to prevent disastrous market crashes. Lately it seems, they buy markets when they decide markets need to be bought, including equity markets. Their main resource is the money the Fed prints. The money is injected into markets via the New York Fed�s Repo desk, which easily showed up in the M-3 numbers, warning intervention was nigh.

This past November, the Fed announced with little comment and no palatable explanation that it would no longer report the M-3 number after March 2006. It is now almost March 2006. Without the useful resource of M-3, we need to find other tools to monitor when the PPT is likely to intervene, and kill shorts.

For the PPT to be effective in driving markets higher, the potential for a sustained turnaround rally depends upon a high volume of open short interest. By measuring this short interest by the level of CBOE put options, we can gauge when markets are ripe for PPT intervention. The way it works is the PPT decides markets need intervention, a decline needs to be stopped, or the risks associated with political events that could be perceived by markets as highly negative and cause a decline, need to be prevented by a rally already in flight. To get that rally, the PPT�s key component � the Fed � lends money to surrogates who will take that fresh electronically printed cash and buy markets through some large unknown buyer�s account. That buying comes out of the blue at a time when short interest is high. The unexpected rally strikes blood, and fear overcomes those who were betting the market would drop. These shorts need to cover, need to buy the very stocks they had agreed to sell (without owning them) at today�s prices in anticipation they could buy them in the future at much lower prices and pocket the difference. Seeing those stocks rally above their committed selling price, the shorts are forced to buy � and buy they do. Thus, those most pessimistic about the equity market end up buying equities like mad, fueling the rally that the PPT started. Bingo, a huge turnaround rally is well underway, and sidelines money from Hedge Funds, Mutual funds and individuals rushes in to join in the buying madness for several days and weeks as the rally gathers a life of its own.

We are about to enter another one of these Bearish set ups. Many technical indicators are warning in spades of a significant coming decline. March is loaded with political risks, cyclical risks, and technical indicator risks. They all point down. With the Fed targeting March as the month M-3 will be hidden, we must presume they are literally loaded for Bear, ready to buy markets with an avalanche of fresh money, so much so that they do not want anyone to know. Thus the risk of PPT intervention at some point during the upcoming decline is quite high. Question: How will we know when conditions are ripe for the Fed and its PPT buddies to intervene? Are Bears wise to not play this next decline, or any future decline for that matter? If so, traders who like to play both up trends and down trends are destined to lose half their money making opportunities.

Above, we have developed what we call a Plunge Protection Team Risk Indicator. This indicator is based upon the premise that the most effective PPT intervention requires an extreme Bearish sentiment as measured by short interest. This indicator measures short interest from the level of CBOE put options outstanding. It simply compares a 10 day moving average of CBOE puts with a 30 day moving average of CBOE puts. Whenever the ratio of the 10 Day to the 30 Day rises above 1.18, we are at great risk of a short covering rally of some sort, probably PPT induced. In other words, whenever the 10 Day MA is more than 18 percent above the 30 Day MA, if you are holding short-term puts, or a short position of some other form, you may want to think about getting out with whatever profits or losses you have.

We have marked in red arrows those times over the past 18 months when the ratio exceeded 1.18. In each and every instance, at least a several day sharp rally developed. It does appear that in every instance, there was a day�s notice before the spike reversal higher took off. It�s sad we have to anticipate this central planning intervention into what used to be free markets, but if we can be prepared, then we can still trade both the ups and the downs profitably. Unfortunately, we must now deal with the metamorphosing of capitalism into corporatist fascism � which simply means, what is good for corporations is right, at the expense of our nation�s founding principles and individual rights. It means markets can never be allowed to drop for fear Wall Street firms� profits will shrink. It isn�t about investment portfolio valuations, for it is proven that dips aid the safest known investment strategy individuals can use, long-term Dollar Cost Averaging. Dips can be good. They provide investments �on sale.� It seems it�s about political ratings, and television ratings, and commissions.

�And He is the image of the invisible God,
the firstborn of all creation.
For by Him all things were created,
both in the heavens and on earth, visible and invisible,
whether thrones or dominions or rulers or authorities �
all things have been created by Him and for Him.
And He is before all things, and in Him all things hold together.�
Colossians 1:15-17


� 2006 Robert McHugh, Ph.D.
Editorial Archive and Bio

CONTACT INFORMATION
Robert McHugh, Ph.D.
Main Line Investors, Inc.
TechnicalIndicatorIndex.com
Kimberton, PA USA
http://www.financialsense.com/fsu/editorials/mchugh/2006/0306.html

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Christina     posted : 08/05/10   04:06 pm


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Dow plunge is wake-up call to deal with debt
By Jeanne Sahadi, senior writerMay 7, 2010: 10:06 AM ET



NEW YORK (CNNMoney.com) -- Technical glitch. Violence in Greece. Historic U.K. elections. A combination of these factors sent the Dow plummeting nearly 1,000 points Thursday before regaining two-thirds of the ground lost.

But here's the thing: the market could be in for a very bumpy ride in the coming months -- except it won't have technical glitches to blame. U.S. debts, more likely than not, could be an underlying culprit.

In any case, Thursday's Dow drama should be a wake-up call that policymakers heed, said Allen Sinai, chief economist and president of Decision Economics.

The story now is Greece's debt crisis, and the fear of debt contagion to Portugal, Italy, Ireland, Spain -- and EU's neighbor, the United Kingdom.

All of that may spell trouble for U.S. exports six to 18 months from now, Sinai said.

Traders realize that, and they also realize there's a risk that the United States -- with its own large and growing stockpile of debt -- will not have financial wiggle room to address future economic weakness, Sinai said. "Everyone with money on the line knows that."

Not everyone shares the view that the shock from events in Greece could move the U.S. economy in a different direction. What happens to Europe's biggest economies matters, said Lakshman Achuthan, managing director of the Economic Cycle Research Institute. "France and Germany are not going into recession anytime soon."

Sinai stressed, however, that the risk of U.S. debt undermining confidence in the United States' ability to handle potential shocks doesn't have to turn out to be reality. "There is time to remove that risk," he said.

The swelling debt loads of several EU countries, the U.K. and the United States means there will be a lot of competition in the market to finance all that debt in the coming years. "That doesn't go away unless you take action," Sinai said.

To reduce the chances of a U.S. fiscal crisis, the action Sinai and budget hawks have been urging U.S. policymakers to take now is to put together a credible plan to stabilize federal debt that would be implemented over time.

"The longer we wait to act, the greater the number of things that could set off a crisis," said Maya MacGuineas, president of the Committee for a Responsible Federal Budget.

Of course, any debt-reduction plan would need to be constructed in such a way as to not hamper economic growth or job creation, since both can also help reduce deficits.

A tall order to be sure, particularly in such a partisan environment. But it's one lawmakers will have to attempt if they want to ensure a more prosperous future than a federal balance sheet stacked with debt could ever deliver, budget experts say. To top of page

http://money.cnn.com/2010/05/07/news/economy/dow_plunge_wake_up_call/index.htm
I\'m happy to receive any constructive criticism about my trades. I\'m always ready to learn more.
Christina     posted : 08/05/10   04:10 pm


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Surge of Computer Selling After Apparent Glitch Sends Stocks Plunging
By NELSON D. SCHWARTZ and LOUISE STORY
Published: May 6, 2010


The glitch that sent markets tumbling Thursday was years in the making, driven by the rise of computers that transformed stock trading more in the last 20 years than in the previous 200.
Enlarge This Image
Ruth Fremson/The New York Times

Visitors on the floor of the New York Stock Exchange watched monitors on Thursday after the Dow Jones index plunged by hundreds of points in minutes.



The old system of floor traders matching buyers and sellers has been replaced by machines that process trades automatically, speeding the flow of buy and sell orders but also sometimes facilitating the kind of unexplained volatility that roiled markets Thursday.

“We have a market that responds in milliseconds, but the humans monitoring respond in minutes, and unfortunately billions of dollars of damage can occur in the meantime,” said James Angel, a professor of finance at the McDonough School of Business at Georgetown University.

In recent years, what is known as high-frequency trading — rapid automated buying and selling — has taken off and now accounts for 50 to 75 percent of daily trading volume. At the same time, new electronic exchanges have taken over much of the volume that used to be handled by the New York Stock Exchange.

In fact, more than 60 percent of trading in stocks listed on the New York Stock Exchange takes place on separate computerized exchanges.

Many questions were left unanswered even hours after the end of the trading day. Who or what was the culprit? Why did markets spin out of control so rapidly? What needs to be done to prevent this from happening again?

The Securities and Exchange Commission and the Commodity Futures Trading Commission said they were examining the cause of the unusual trading activity.

Mary L. Schapiro, chairwoman of the S.E.C., and Gary Gensler, the head of the C.F.T.C., held conference calls with overseers of the exchanges who were reviewing trading tapes from the day.

One official said they identified “a huge, anomalous, unexplained surge in selling, it looks like in Chicago,” about 2:45 p.m. The source remained unknown, but that jolt apparently set off trading based on computer algorithms, which in turn rippled across indexes and spiraled out of control.

Many firms have computers that are programmed to automatically place buy or sell orders based on a variety of things that happen in the markets. Some of the simplest triggers are set off when a stock drops or rises a certain percent in the trading day, or when an index moves a specific amount.

But these orders can have a cascading effect. For example, if enough programs place sell orders when the overall market is down, say, 4 percent in a single day, those orders could push the market down even more — and set off programs that do not kick in until the market is down 5 percent, which in turn can have the effect of pushing stocks down even more.

Some circuit breakers do exist, a legacy of the reforms made following the 1987 stock market crash, but they only kick in after a huge drop — and only at certain hours. Before 2 p.m., a 10 percent drop in the Dow causes New York Stock Exchange to halt trading for one hour. Between 2 p.m. and 2:30 p.m., the pause shrinks to a half-hour and after 2:30, there is no halt in trading.

If there is a 20 percent drop, trading stops for two hours before 1 p.m. and by one hour between 1 and 2 p.m. After 2 p.m., the market closes.

Glitches in individual stocks have happened before — what was different Thursday was the scale of the problem. In April 2009, shares of Dendreon, a small biotech company, dived by more than 50 percent in less than two minutes, just before a presentation by Dendreon executives, Mr. Angel said.

Trading was halted on the Nasdaq, where Dendreon is listed, but there was no news as it turned out, Mr. Angel said, and when trading resumed the stock returned to its previous levels. “It took a human two minutes to discover something was wrong and halt trading,” he said.

What happened Thursday was different because it moved hundreds of stocks sharply at the same time, many of them blue chips that form the foundation of individual investors portfolios as well as major indexes like the Dow and the Standard & Poor’s 500-stock index.

The near-instantaneous swings left brokers dumbfounded. Dermott W. Clancy, who runs a New York Stock Exchange broker, said Thursday was one of the five worst days he has seen in 24 years in the business. When the market dropped across all indexes in a matter of minutes, customers were calling him nonstop.

“They’re calling saying ‘Is there something I’m missing? Is there somebody valuing these securities at this level? Is there some news in the marketplace I’m not aware of?’ ” he said.

The answer — that it all started with an apparent error — infuriated Mr. Clancy. “The market was never down one thousand points,” he said. “Procter & Gamble should never have traded at $39. But a lot of people lost money as if the prices were meant to drop.”

For a short while, traders started to distrust what they were seeing.

“There was no pricing mechanism,” Mr. Clancy said. “There was nothing. No one knew what anything was worth. You didn’t know where to buy a stock or sell a stock.”

Jackie Calmes and Binyamin Appelbaum in Washington contributed reporting.

This article has been revised to reflect the following correction:

Correction: May 8, 2010

A picture caption on Friday with an article about high-speed trading’s possible role in Thursday’s abrupt market sell-off misstated the time it was taken. The picture, which showed visitors to the New York Stock Exchange watching monitors, was taken after the Dow Jones index plunged nearly 1,000 points within minutes — not as the plunge was taking place.
A version of this article appeared in print on May 7, 2010, on page B7 of the New York edition.

http://www.nytimes.com/2010/05/07/business/economy/07trade.html

I\'m happy to receive any constructive criticism about my trades. I\'m always ready to learn more.
Christina     posted : 08/05/10   04:27 pm


member  
It's about time the President's Working Group on Financial Markets, better known in some circles as the Plunge Protection Team, dusted off their operators manual, turned on their computers, and got to work. They just issued this press release.
IMAGEIt goes on about "important new authorities" to go along with "existing authorities".

That's all well and good, but it's results that matter and I think we all know what they have to do at the moment - get that stock market turned around and headed north again.

For all the talk about market intervention in recent years, the PPT has been noticeably absent since the credit crisis took a turn for the worse a month or two ago and, to be honest, some of us are starting to think that the PPT doesn't exist at all - that the President's Working Group on Financial Markets is just one more ineffectual government group full of highly paid bureuacrats.

Come on PPT!

We need you more than ever right now!


4 comments:

WP said...

On CNBC they're talking about how you have to get "defensive" right now and stick with consumer staples and health care stocks.

Wouldn't a better defensive position be cash? How can these people be talking about buying any stock right now?
October 06, 2008 7:11 AM
Anonymous said...

I cannot believe that they have not already been hard at work.

Problem is, with falling employment and earnings, no amount of money is going to keep the markets propped up.

We need policy changes that create jobs, not money for the bankers pockets...they are already overflowing with the several 10's of trillions they just looted.
October 06, 2008 8:07 AM
Anonymous said...

Sorry but you are dead wrong that the PPT has not been working. Realistically with market conditions being what they have since late '07..the DOW should have been under 10 a long time ago..the only reason it went there today was the fact that the PPT doesn't control the Global Market..I suspect that our PPT will be contacting is conterparts throughout the world in the next 48 hours..let's not be surprised if after Wed the DOW surprising goes back up! I would then rename it the WPPTU(World Plunger Protection Team United!)
October 06, 2008 4:25 PM
Marcello said...

uh, no PPT ?

then what happened at 10:45am, then again at 2:45pm, yesterday, when every North American index "v"-ed upward after a strong decline.

overlay the daily TSX, DJAI, S&P, Nasdaq, whatever over each other, and they look like the same graph ! the turning points are in exactly the same times.

the boyz are working, no doubt about it
October 07, 2008 6:26 AM




click to enlarge


I\'m happy to receive any constructive criticism about my trades. I\'m always ready to learn more.
mart.j     posted : 15/09/10   11:42 pm


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Plunge protection team where are u , up at the opening and sell at the closing ?




click to enlarge


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Stephan     posted : 28/09/10   07:28 pm


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click to enlarge


Christina     posted : 30/10/10   06:06 am


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Is the Fed Plunge Protection Team Manipulating the Stock Market?

Rumors are, the U.S. government "is propping up the stock market."

'By far, the most frequent question we've been asked recently at EWI's Message Board is this: "What is your take on the persistent internet chatter that the Federal Reserve is holding up the stock market via QE2, POMO, etc.? How can stocks ever decline again if the Fed is in control?" Here is an eye-opening chart that will help shed more light on this issue

You will find many intriguing Q&As at EWI's Message Board. We offer it as a free way for our Club EWI members and subscribers to interact with EWI and the Socionomics Institute's experts. We strive to answer every Message Board reader, and publicly post the best Q&As. By far, the most frequent question we've been asked recently is:

"What is your take on the persistent internet chatter that the Federal Reserve is holding up the stock market via QE2, POMO, etc.? How can stocks ever decline again if the Fed is in control?"

I\'m happy to receive any constructive criticism about my trades. I\'m always ready to learn more.
mart.j     posted : 20/11/10   10:09 am


member  
do not forget who is the FED ?


The Federal Reserve, which allegedly plays the role of the U.S. central bank, is actually privately owned. "The Idaho Observer" (June 2002, page 6) published a reconstructed conversation that took place on October 8, 1992, between Ron Supinski, of the Public Information Department of the San Francisco Federal Reserve Bank, and Ron Hicks (the caller in the text). The conversation explained our fiat (faith based) monetary system.


The following is a conversation with Mr. Ron Supinski of the Public Information Department of the San Francisco Federal Reserve Bank. This is an account of that conversation.
CALLER - Mr. Supinski, does my country own the Federal Reserve System?
MR. SUPINSKI - We are an agency of the government.
CALLER - That's not my question. Is it owned by my country?
MR. SUPINSKI - It is an agency of the government created by congress.
CALLER - Is the Federal Reserve a Corporation?
MR. SUPINSKI - Yes
CALLER - Does my government own any of the stock in the Federal Reserve?
MR. SUPINSKI - No, it is owned by the member banks.
CALLER - Are the member banks private corporations?
MR. SUPINSKI - Yes
CALLER - Are Federal Reserve Notes backed by anything?
MR. SUPINSKI-Yes, by the assets of the Federal Reserve but, primarily by the power of congress to lay tax on the people.
CALLER - Did you say, by the power to collect taxes is what backs Federal Reserve Notes?
MR. SUPINSKI - Yes
CALLER - What are the total assets of the Federal Reserve?
MR. SUPINSKI - The San Francisco Bank has $36 Billion in assets.
CALLER - What are these assets composed of?
MR. SUPINSKI - Gold, the Federal Reserve Bank itself and government securities.
CALLER - What value does the Federal Reserve Bank carry gold per oz. on their books?
MR. SUPINSKI - I don't have that information but the San Francisco Bank has $1.6 billion in gold.
CALLER - Are you saying the Federal Reserve Bank of San Francisco has $1.6 billion in gold, the bank itself and the balance of the assets is government securities?
MR. SUPINSKI - Yes.
CALLER - Where does the Federal Reserve get Federal Reserve Notes from?
MR. SUPINSKI - They are authorized by the Treasury.
CALLER - How much does the Federal Reserve pay for a $10 Federal Reserve Note?
MR. SUPINSKI - Fifty to seventy cents.
CALLER - How much do they pay for a $100.00 Federal Reserve Note?
MR. SUPINSKI - The same fifty to seventy cents.
CALLER - To pay only fifty cents for a $100.00 is a tremendous gain, isn't it?
MR. SUPINSKI - Yes
CALLER - According to the US Treasury, the Federal Reserve pays $20.60 per 1,000 denomination or a little over two cents for a $100.00 bill, is that correct?
MR. SUPINSKI - That is probably close.
CALLER - Doesn't the Federal Reserve use the Federal Reserve Notes that cost about two cents each to purchase US Bonds from the government?
MR. SUPINSKI - Yes, but there is more to it than that.
CALLER - Basically, that is what happens?
MR. SUPINSKI - Yes, basically you are correct.
CALLER - How many Federal Reserve Notes are in circulation?
MR. SUPINSKI - $263 billion and we can only account for a small percentage.
CALLER - Where did they go?
MR. SUPINSKI - Peoples mattress, buried in their back yards and illegal drug money.
CALLER - Since the debt is payable in Federal Reserve Notes, how can the $4 trillion national debt be paid-off with the total Federal Reserve Notes in circulation?
MR. SUPINSKI - I don't know.
CALLER - If the Federal Government would collect every Federal Reserve Note in circulation would it be mathematically possible to pay the $4 trillion national debt?
MR. SUPINSKI - No
CALLER - Am I correct when I say, $1 deposited in a member bank $8 can be lent out through Fractional Reserve Policy?
MR. SUPINSKI - About $7.
CALLER - Correct me if I am wrong but, $7 of additional Federal Reserve Notes were never put in circulation. But, for lack of better words were "created out of thin air " in the form of credits and the two cents per denomination were not paid either. In other words, the Federal Reserve Notes were not physically printed but, in reality were created by a journal entry and lent at interest. Is that correct?
MR. SUPINSKI - Yes
CALLER - Is that the reason there are only $263 billion Federal Reserve Notes in circulation?
MR. SUPINSKI - That is part of the reason.
CALLER - Am I mistaking that when the Federal Reserve Act was passed (on Christmas Eve) in 1913, it transferred the power to coin and issue our nation's money and to regulate the value thereof from Congress to a Private corporation. And my country now borrows what should be our own money from the Federal Reserve (a private corporation) plus interest. Is that correct and the debt can never be paid off under the current money system of country?
MR. SUPINSKI - Basically, yes.
CALLER - I smell a rat, do you?
MR. SUPINSKI - I am sorry, I can't answer that, I work here.
CALLER - Has the Federal Reserve ever been independently audited?
MR. SUPINSKI - We are audited.
CALLER - Why is there a current House Resolution 1486 calling for a complete audit of the Federal Reserve by the GAO and why is the Federal Reserve resisting?
MR. SUPINSKI - I don't know.
CALLER - Does the Federal Reserve regulate the value of Federal Reserve Notes and interest rates?
MR. SUPINSKI - Yes
CALLER - Explain how the Federal Reserve System can be Constitutional if, only the Congress of the US, which comprises of the Senate and the House of representatives has the power to coin and issue our money supply and regulate the value thereof? [Article 1 Section 1 and Section 8] Nowhere, in the Constitution does it give Congress the power or authority to transfer any powers granted under the Constitution to a private corporation or, does it?
MR. SUPINSKI - I am not an expert on constitutional law. I can refer you to our legal department.
CALLER - I can tell you I have read the Constitution. It does NOT provide that any power granted can be transferred to a private corporation. Doesn't it specifically state, all other powers not granted are reserved to the States and to the citizens? Does that mean to a private corporation?
MR. SUPINSKI - I don't think so, but we were created by Congress.
CALLER - Would you agree it is our country and it should be our money as provided by our Constitution?
MR. SUPINSKI - I understand what you are saying.
CALLER - Why should we borrow our own money from a private consortium of bankers? Isn't this why we had a revolution, created a separate sovereign nation and a Bill of Rights?
MR. SUPINSKI - (Declined to answer).
CALLER - Has the Federal Reserve ever been declared constitutional by the Supreme Court?
MR. SUPINSKI - I believe there has been court cases on the matter.
CALLER - Have there been Supreme Court Cases?
MR. SUPINSKI - I think so, but I am not sure.
CALLER - Didn't the Supreme Court declare unanimously in A.L.A. Schechter Poultry Corp. vs. US and Carter vs. Carter Coal Co. the corporative-state arrangement an unconstitutional delegation of legislative power? ["The power conferred is the power to regulate. This is legislative delegation in its most obnoxious form; for it is not even delegation to an official or an official body, presumptively disinterested, but to private persons." Carter vs. Carter Coal Co...]
MR. SUPINSKI - I don't know, I can refer you to our legal department.
CALLER - Isn't the current money system a house of cards that must fall because, the debt can mathematically never be paid-off?
MR. SUPINSKI - It appears that way. I can tell you have been looking into this matter and are very knowledgeable. However, we do have a solution.
CALLER - What is the solution?
MR. SUPINSKI - The Debit Card.
CALLER - Do you mean under the EFT Act (Electronic Funds Transfer)? Isn't that very frightening, when one considers the capabilities of computers? It would provide the government and all it's agencies, including the Federal Reserve such information as: You went to the gas station @ 2:30 and bought $10.00 of unleaded gas @ $1.41 per gallon and then you went to the grocery store @ 2:58 and bought bread, lunch meat and milk for $12.32 and then went to the drug store @ 3:30 and bought cold medicine for $5.62. In other words, they would know where we go, when we went, how much we paid, how much the merchant paid and how much profit he made. Under the EFT they will literally know everything about us. Isn't that kind of scary?
MR. SUPINSKI - Yes, it makes you wonder.
CALLER - I smell a GIANT RAT that has overthrown my constitution. Aren't we paying tribute in the form of income taxes to a consortium of private bankers?
MR. SUPINSKI - I can't call it tribute, it is interest.
CALLER - Haven't all elected officials taken an oath of office to preserve and defend the Constitution from enemies both foreign and domestic? Isn't the Federal Reserve a domestic enemy?
MR. SUPINSKI - I can't say that.
CALLER - Our elected officials and members of the Federal Reserve are guilty of aiding and abetting the overthrowing of my Constitution and that is treason. Isn't the punishment of treason death?
MR. SUPINSKI - I believe so.
CALLER - Thank you for your time and information and if I may say so, I think you should take the necessary steps to protect you and your family and withdraw your money from the banks before the collapse, I am.
MR. SUPINSKI - It doesn't look good.
CALLER - May God have mercy on the souls who are behind this unconstitutional and criminal act called the Federal Reserve. When the ALMIGHTY MASS awakens to this giant hoax, they will not take it with a grain of salt. It has been a pleasure talking to you and I thank you for your time. I hope you will take my advice before it does collapse.
MR. SUPINSKI - Unfortunately, it does not look good.
CALLER - Have a good day and thanks for your time.
MR. SUPINSKI - Thanks for calling.

If the reader has any doubts to the validity of this conversation, call your nearest Federal Reserve Bank, YOU KNOW THE QUESTIONS TO ASK! You won't find them listed under the Federal Government. They are in the white pages, along with Federal Express, Federal Deposit Insurance Corp. (FDIC), and any other business. Find out for yourself if all this is true.

And then, go to your local law library and look up the case of Lewis vs. US, case #80-5905, 9th Circuit, June 24, 1982. It reads in part: "Examining the organization and function of the Federal Reserve Banks and applying the relevant factors, we conclude that the federal reserve are NOT federal instrumentality's . . but are independent and privately owned and controlled corporations - federal reserve banks are listed neither as "wholly-owned' government corporations [under 31 USC Section 846] nor as 'mixed ownership' corporations [under 31 USC Section 856] . . . 28 USC Sections 1346(b), 2671. '

Federal agency' is defined as: the executive departments, the military departments, independent establishments of the United States, and corporations acting primarily as instrumentality's of the United States, but does not include any contractors with the United States . . . There are no sharp criteria for determining whether an entity is a federal agency within the meaning of the Act, but the critical factor is the existence of the federal government control over the 'detailed physical performance' and 'day to day operations' of that entity.

Other factors courts have considered include whether the entity is an independent corporation . . . whether the government is involved in the entity's finances, . . . and whether the mission of the entity furthers the policy of the United States . . . Examining the organization and function of the Federal Reserve Banks, and applying the relevant factors, we conclude that the Reserve Banks are not federal instrumentalities ...

It is evident from the legislative history of the Federal Reserve Act that Congress did not intend to give the federal government direction over the daily operation of the Reserve Banks . . . The fact that the Federal Reserve Board regulates the Reserve Banks does not make them federal agencies under the Act . . . Unlike typical federal agencies, each bank is empowered to hire and fire employees at will. Bank employees do not participate in the Civil Service Retirement System. They are covered by worker's compensation insurance, purchased by the Bank, rather than the Federal Employees Compensation Act.

Employees traveling on Bank business are not subject to federal travel regulations and do not receive government employee discounts on lodging and services . . . Finally, the Banks are empowered to sue and be sued in their own name. 12 USC Section 341. They carry their own liability insurance and typically process and handle their own claims . . ." According to the Federal Reserve Bank of Philadelphia, "When the Federal Reserve was created, its stock was sold to the member banks." ("The Hats The Federal Reserve Wears," published by the Federal Reserve Bank of Philadelphia).

The original Stockholders of the Federal Reserve Banks in 1913 were the Rockefeller's, JP Morgan, Rothschild's, Lazard Freres, Schoellkopf, Kuhn-Loeb, Warburgs, Lehman Brothers and Goldman Sachs. The MONEYCHANGERS wanted to be insured they had a monopoly over our money supply, so Congress passed into law Title 12, Section 284 of the United States Code. Section 284 specifically states, "NO STOCK ALLOWED TO THE US" *

Monopoly - "A privilege or peculiar advantage vested in one or more persons or companies, consisting in the exclusive right [or power] to carry on a particular business or trade, manufacture a particular article, or control the sale of the whole supply of a particular commodity, A form of market structure in which only a few firms dominate the total sales of a product or service.

'Monopoly,' as prohibited by Section 2 of the Sherman Antitrust Act, has two elements: possession of a monopoly power in relevant market and willful acquisition or maintenance of that power, as distinguished from growth or development as a consequence of a superior power, business acumen, or historical product. A monopoly condemned by the Sherman Act is the power to fix prices, or exclude competition, coupled with policies designed to use and preserve that power." (Black's Law Dictionary, 6th Edition) The Federal Reserve Act goes one step farther, "No Senator or Representative in Congress shall be a member of the Federal Reserve Board or an officer or director of a Federal Reserve Bank." They didn't want We The People to have any say in the operation of their monopoly through our elected officials.

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Hedge21     posted : 01/09/12   10:46 am


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Distinguished Members of Congress, ladies and gentlemen:

We are gathered here today for a very rare and historic occasion in our Nation's history.

Before I make some observations that I have made note of here, I want to say to the Congress again, as I do almost daily these days, in the words of the Navy--"Well done."

When I have signed this bill before me, we will have made the first fundamental change in our coinage in 173 years. The Coinage Act of 1965 supersedes the act of 1792. And that act had the title: An Act Establishing a Mint and Regulating the Coinage of the United States.

Since that time our coinage of dimes, and quarters, and half dollars, and dollars have contained 90 percent silver. Today, except for the silver dollar, we are establishing a new coinage to take its place beside the old.

My Secretary of the Treasury, Joe Fowler, is a little stingy about making samples, but I have some here. Joe made sure that I wouldn't put them in my pocket by sending them over here in plastic.

Actually, no new coins can be minted until this bill is signed. So these strikes, as they are called, are coins that we will never use. On one side is our first First Lady, Martha Washington. On the other, a replica of Mount Vernon.

The new dimes and the new quarters will contain no silver. They will be composites, with faces of the same alloy used in our 5-cent piece that is bonded to a core of pure copper. They will show a copper edge.

Our new half dollar will continue our silver tradition. Eighty percent silver on the outside and 19 percent silver inside. It will be nearly indistinguishable in appearance from our present half dollar.

All these new coins will be the same size and will bear the same designs as do their present counterparts. And they will fit all the parking meters and all the coin machines and will have the same monetary value as the present ones.

Now, all of you know these changes are necessary for a very simple reason--silver is a scarce material. Our uses of silver are growing as our population and our economy grows. The hard fact is that silver consumption is now more than double new silver production each year. So, in the face of this worldwide shortage of silver, and our rapidly growing need for coins, the only really prudent course was to reduce our dependence upon silver for making our coins.

If we had not done so, we would have risked chronic coin shortages in the very near future.

There is no change in the penny and the nickel. There is no change in the silver dollar, although we have no present plans for silver dollar production.

Some have asked whether our silver coins will disappear. The answer is very definitely-no.

Our present silver coins won't disappear and they won't even become rarities. We estimate that there are now 12 billion--I repeat, more than 12 billion silver dimes and quarters and half dollars that are now outstanding. We will make another billion before we halt production. And they will be used side-by-side with our new coins.

Since the life of a silver coin is about 25 years, we expect our traditional silver coins to be with us in large numbers for a long, long time.

If anybody has any idea of hoarding our silver coins, let me say this. Treasury has a lot of silver on hand, and it can be, and it will be used to keep the price of silver in line with its value in our present silver coin. There will be no profit in holding them out of circulation for the value of their silver content.

The new coins are not going to have a scarcity value either. The mint is geared to get into production quickly and to do it on a massive scale. We expect to produce not less than 3 1/2 billions of the new coins in the next year, and, if necessary, twice that amount in the following 12 months.

So, we have come here this morning to this, the first house of the land and this beautiful Rose Garden, to congratulate all of those men and women that make up our fine Congress, who made this legislation possible--the committees of both Houses, the leadership in both Houses, both parties, and Secretary Fowler and all of his associates in the Treasury.

I commend the new coinage to the Nation's banks and businesses and to the public. I think it will serve us well.

Now, I will sign this bill to make the first change in our coinage system since the 18th century. And to those Members of Congress, who are here on this very historic occasion, I want to assure you that in making this change from the 18th century we have no idea of returning to it.

We are going to keep our eyes on the stars and our feet on the ground.
Note: The President spoke at 11:21 a.m. in the Rose Garden at the White House. During his remarks he referred to Henry H. Fowler, Secretary of the Treasury.

As enacted, the Coinage Act of 1965 is Public Law 89-81 (79 Stat. 254).

On October 30, 1965, the White House announced that circulation of the new 25-cent piece would begin on November 1. The White House release stated in part, "The new--nonsilver--quarter dollar will be added to the circulation of the traditional 90 percent silver quarter. Both the old and the new quarters are to circulate together.

"Approximately 230 million pieces of the new quarter will be distributed during the week beginning November 1. Initial distribution will be backed by production that will rise from 28 million to 60 million pieces a week during November, and will be still higher thereafter."
Citation: Lyndon B. Johnson: "Remarks at the Signing of the Coinage Act," July 23, 1965. Online by Gerhard Peters and John T. Woolley, The American Presidency Project. http://www.presidency.ucsb.edu/ws/?pid=27108.

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Christina     posted : 27/09/12   09:55 pm


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http://www.newyorkfed.org/research/epr/00v06n2/0007osle.html

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I\'m happy to receive any constructive criticism about my trades. I\'m always ready to learn more.
Hedge21     posted : 15/09/13   06:47 pm


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article 11/29/2011 from zero hedge juste for your cultur and Information

http://www.zerohedge.com/news/hank-paulson-tipped-goldman-led-plunge-protection-team-about-fannie-bankruptcy-7-weeks-advance




Today, BusinessWeek's Michael Serrill and Jonathan Neumann have released a blockbuster report based on a FOIA response by the Treasury, which proves that in America rules are only for little people, that this country has been a banana republic for years, that Animal Farm was spot on, and gives excruciating detail of how Hank Paulson tipped off a select group of Goldman diaspora hedge fund managers about the eventual failure of Fannie and Freddie 7 weeks ahead of this information becoming public knowledge. The report basically is a summary of a meeting that took place at the offices of Eton Mindich's Eton Park headquarters on July 21, 2008, 7 days after his famous '“If you have a bazooka, and people know you have it, you're not likely to take it out," speech and 7 weeks before both GSEs effectively filed for bankruptcy and were put into conservatorship. Now if it only ended there it would have been fine - a case of potential criminal collusion between the government (although nothing specific against Paulson as he didn't actually trade: he just made sure his former Goldman colleagues made money), and the 0.00001% in the face of a few multi-billionaires who most certainly did trade on material non-public information sourced by Hank. Where it however gets worse is when one considers the actual role of one Eric Mindich in the hierarchy of the Asset Managers' committee of the President's Working Group on Capital Markets, better known of course as the PPT: a topic we discussed first back in September 2009 when we asked "What Is Goldman Alum Eric Mindich's Role As Chair Of The Asset Managers' Committee Of The President's Working Group?" Back then we did not get an answer. Luckily, courtesy of a few answered FOIA requests, some real investigative journalism, and not reporting for the sake of brown-nosing just so one can get soundbites for their next name dropping "blockbuster" and straight to HBO movie, we are starting to get the full picture of just how high in US government the Goldman Sachs controlled "crony capitalist" adminsitration truly runs.

Before we get into the details of Mr Mindich's curious relationship with the government, here is the gist of the BusinessWeek piece, which as noted focuses on Paulson who "said he had erred by not punishing Bear Stearns shareholders more severely. The secretary, then 62, went on to describe a possible scenario for placing Fannie and Freddie into “conservatorship” -- a government seizure designed to allow the firms to continue operations despite heavy losses in the mortgage markets."

The gathering comprised some of Wall Street's most storied investors. Mindich, a former chief strategy officer of New York- based Goldman Sachs, started Eton Park in 2004 with $3.5 billion, at the time one of the biggest hedge-fund launches ever. [Dinakar] Singh, a former head of Goldman's proprietary-trading desk, also began his fund in 2004, in partnership with private- equity firm Texas Pacific Group Ltd. Lone Pine's [Stephen] Mandel worked as a retail analyst at Goldman before joining Julian Robertson's Tiger Management LLC, one of the most successful hedge funds of the 1980s and 1990s. He started his own firm in 1997. [Daniel] Och was co-head of U.S. equity trading at Goldman before founding Och-Ziff in 1994. The publicly listed firm managed $28.9 billion in November. One other Goldman Sachs alumnus was at the meeting: Frank Brosens, founder and principal of Taconic Capital Advisors LP, who worked at Goldman as an arbitrageur and who was a protege of Robert Rubin, who went on to become Treasury secretary.

In other words the point of the meeting was nothing short of the former Goldman CEO telling all his former Goldman colleagues just what he was planning on doing in his capacity as Treasury Secretary.

Others also benefited:

Non-Goldman Sachs alumni who attended included short seller James Chanos of Kynikos Associates Ltd., who helped uncover the Enron Corp. accounting fraud; GSO Capital Partners LP co-founder Bennett Goodman, who sold his firm to Blackstone Group LP in early 2008; Roger Altman, chairman and founder of New York investment bank Evercore Partners Inc.; and Steven Rattner, a co-founder of private-equity firm Quadrangle Group LLC, who went on to serve as head of the U.S. government's Automotive Task Force. Another person in attendance: Michele Davis, then-assistant secretary for public affairs at the Treasury Department, who now represents Paulson as a managing partner at public relations firm Brunswick Group Inc. In an e-mail response to Bloomberg Markets, she referred all questions to Paulson's book on the financial crisis, “On the Brink” (Business Plus, 2010), which makes no mention of the Eton Park meeting.

No mention? What a shocker. Perhaps it may have to do with this:

The fund manager who described the meeting left after coffee and called his lawyer. The attorney's quick conclusion: Paulson's talk was material nonpublic information, and his client should immediately stop trading the shares of Washington- based Fannie and McLean, Virginia-based Freddie.



The manager who described the Eton Park meeting says he also discussed it with an investigator from the FCIC. The discussion was confirmed by a former FCIC employee.

Of course, it only means that one would not have to cover shorts on "existing positions." The market's shift from a NYSE to OTC Pink Sheets listed stock would do it for them.

That manager says he ended up profiting from his Fannie Mae and Freddie Mac positions because he was already short the stocks. On his lawyer's advice, he stopped covering his short positions and rode Fannie and Freddie shares all the way to the bottom.

Naturally, the one defense of this criminal disclosure comes from a former Fed president:

“It seems to me, you've got to cut the guy some slack, even if he tipped his hand,” says William Poole, a former president of the Federal Reserve Bank of St. Louis. “How do you prepare the market for the fact that policy has changed without triggering the very crisis that you're trying to avoid? What is he supposed to say without misleading these people?”

So going back to Eric Mindich. Why is he so special? Presenting Exhibit A, the members of the Asset Managers' Committee of the President's Working Group on Capital Markets, aka the PPT:




click to enlarge



ust what is this curious committee consisting of all key hedge fund managers?

The Asset Managers’ Committee and the Investors’ Committee are private sector committees established by the President’s Working Group on Financial Markets (“PWG”). The first task of the Committees was to develop and publicly release best practices so that market participants may enhance investor protection and systemic risk safeguards consistent with PWG principles and guidelines. The final reports are available through the homepage of the respective Committee.

In other words, these are the hegde funders who comprise the Plunge Protection Team.

But this will be nothing new to our readers. Here we refer to our article from back in September 2009:



On September 25, 2007, the President's Working Group on Financial Markets, better known as the Plunge Protection Team, announced the formation of two private sector committees, one comprising of Asset Managers and the other, of Investors. It is the first one that is more interesting, as the committee is chaired by one Eric Mindich, best known for his Goldman Sachs wunderkind status, who at 27, was the youngest Goldmanite ever to be promoted to partner. In 2004, Eric split off from Goldman, nonetheless maintaining a favorable relationship with the mothership through its "Fund of Funds" division (we jest), and its various Prime Brokerage client platforms, by starting Eton Park, which with its starting capital of $3 billion, is still likely a record of highest AUM at a fund's inception.

So what was the justification for the creation of this specific committee. From its Mission Statement:

PRESIDENT’S WORKING GROUP ON FINANCIAL MARKETS

ASSET MANAGERS’ COMMITTEE



Mission Statement



The Asset Managers’ Committee is comprised of representatives from a broad array of asset managers. Its purpose is to facilitate an exchange of information between the alternative asset management community and the agencies comprising the President’s Working Group on Financial Markets (“PWG”). It will be a standing committee, and its members serve at the behest of the committee’s chairperson for three-year terms. Members may be reappointed for additional terms. It is expected that the committee will develop best practice guidelines, as described below, and also subsequently review and reassess, and if necessary revise, those guidelines.



The first task of the committee is to develop detailed guidelines that would define “bestpractices” for the alternative asset management industry, including practices regarding information, valuation, and risk management systems. They would foster efforts to enhance market discipline, mitigate systemic risk, augment regulatory safeguards regarding investor protection, and complement regulatory efforts to enhance market integrity. These guidelines would review and build on existing industry work and the principles and guidelines released in February 2007 by the PWG, particularly Principle 9, where possible. The initial focus will be on practices for hedge fund managers.

Yet less than a year later, the economy and capital markets collapsed, forcing Hank Paulson to launch an unprecedented sequence of events to prevent the full meltdown of the Western World. Indeed, the same Hank Paulson who one year prior to Lehman's collapse had this to say regarding the Asset Managers' committee:

"These groups are drawn from among the industry's finest in their respective areas," said Treasury Secretary and PWG Chairman Henry M. Paulson, Jr. "The market will benefit if experienced participants develop and implement best practices."

It is safe to say that whatever the committee's true mission was, its stated one was an unmitigated failure. For reference purposes, the full committee consists of the following:

Eric Mindich, Chair, Eton Park Capital Management
Anne Casscells. AETOS Capital, LLC
James S. Chanos, Kynikos Associates LP
Anne Dinning, D. E. Shaw & Co., L.P.
Jonathon S. Jacobson, Highfields Capital Management
Marc Lasry,Avenue Capital Group
Edward A. Mulé, Silver Point Capital
Daniel S. Och, Och-Ziff Capital Management
Daniel H. Stern, Reservoir Capital Group
William Von Mueffling, Cantillon Capital
Michael Vranos, Ellington Management Group LLC

Pardon our hypocrisy, but virtually all of these funds (with the likely exception of Kynikos) would have gotten destroyed had Bernanke, the Chairman of the PWG and the President, decided not to intervene. Furthermore, as is well know, the President's Working Group on Financial Markets has long been not only the front for the elusive Plunge Protection Team, but is an organization this is so wrapped in secrecy that not even minutes of its meetings are kept as John Crudele of the NY Post found out post his US Treasury FOIA submission. Yet the Asset Managers' Committee seems to be in that gray area where it is not totally consumed by the PWG, and thus it is possible that a record of its actions may actually not disappear into the void once any market critical decision is made.

We concluded our article from over two years ago as follows:

Zero Hedge is submitting a FOIA request to the US Treasury to disclose any and all information, records, emails, telephone conversations, with and amongst members of the committee and specifically focusing on former Goldman Sachs employee and Chair of the Asset Managers' Committee Eric Mindich, at and around the time of the Lehman collapse. We expect nothing but heavily redacted pages at best. Yet with recent scrutiny of latent Goldman interests in virtually every segment of the executive branch, Zero Hedge does find it oddly convenient, that in those dark (for Goldman Sachs) days, the two key people making capital markets related decisions were yet another two Goldman Sachs alumni: Hank Paulson and Eric Mindich. And we believe in the spirit of fake transparency so heavily endorsed by the President, it is worth at least attempting to get some additional information on the deliberations by the proxy entities that truly run this country's economy and capital markets.

We are happy that Bloomberg was more successful in getting a FOIA response than Zero Hedge. We urge Messrs Serill and Neumann to enjoin our request for data on what Paulson may have leaked to his Goldman buddies in advance of the Lehman collapse. Because maybe, just maybe, if the Goldman-run Plunge Protection Team let Lehman fail, it was under direct instructions from Hank Paulson... just as he tipped Mindich et al to the GSEs failure. And all those rumors about a directed run on the bank (whose failure benefited none other more than Goldman Sachs) coordinated by none other than the man in charge of it all, will suddenly come true.

Because we have a sinking feeling we will have been proven absolutely spot on in our "paranoid conspiracy theorism" all over again...
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