PPT, fact or fiction?

[Maverick74]

Quote from Bogan7:

I dont know if the PPT is real or not BUT I know for a fact that central banks do actually get involved in the futures markets as one of the European central banks from the North was one of our clients and used to swing it around in the bunds.

So if they were active the credit derivative markets what would stop them being active in the equity derivatives market?

Cheers

Because there is no point to supporting the equity markets. The credit markets have a far greater impact on central banks, mortgages, savings and loans, etc. Supporting our equity markets serves no useful purpose. That is why the nasdaq dropped 80% from it's 2000 highs. Where were they? As you can see, the 80% drop in the nasdaq and 50% drop in the S&P had very little effect on our economy, but the savings and loan crisis in the early 80's was devastating. The Asian flu in 98 was devastating. LTCM was very serious. Those were very serious matters. Where stock prices go is of little importance in the grand scheme of things.

 

[Bogan7]

Quote from Maverick74:

Because there is no point to supporting the equity markets. The credit markets have a far greater impact on central banks, mortgages, savings and loans, etc. Supporting our equity markets serves no useful purpose. That is why the nasdaq dropped 80% from it's 2000 highs. Where were they? As you can see, the 80% drop in the nasdaq and 50% drop in the S&P had very little effect on our economy, but the savings and loan crisis in the early 80's was devastating. The Asian flu in 98 was devastating. LTCM was very serious. Those were very serious matters. Where stock prices go is of little importance in the grand scheme of things.

They werent just supporting they were actively trading the market from both sides.

Cheers

 

[SDticks]

Quote from Bogan7:

They weren't just supporting they were actively trading the market from both sides.

Cheers

Why would they actively trade from both sides? Are they trying to make money from trading like a hedge fund? That sounds ridiculous.

 

[Bogan7]

Quote from SDticks:

Why would they actively trade from both sides? Are they trying to make money from trading like a hedge fund? That sounds ridiculous.

It is true though

 

[jeffalvinson]

I believe there is only a limited amount of liquidity the PPT can provide.
Case in point:
The PPT was establish in 1988 but it sure as hell couldn't save the 2000-2002 bear market which took down the
Nasdaq -76%, SPX -50% and Dow -36%. It was a true correction that needed to occur.
On the other hand, they did manage to establish an artificial
support level for the recent free-fall on Feb 27, 2007.
So they can handle single event anomalies that do not have a basis in fact.

 

[bighog]

MAV utopia is here. ..