I find it very odd that a mild 4-6% correction in the stock market could draw reassuring words from the President of the United States.
Yesterday, President Bush spoke to a group of reporters at the Treasury Department-Read Article.
The "Plunge Protection Team" is also known as Executive Order 12631- Working Group on Financial Markets, signed into law by President Reagan after the 1987 market crash.
Here are some highlights of the order;
"By virtue of the authority vested in me as President by the Constitution and laws of the United States of America, and in order to establish a Working Group on Financial Markets, it is hereby ordered as follows:
Section 1. Establishment. (a) There is hereby established a Working Group on Financial Markets (Working Group). The Working Group shall be composed of:
(1) the Secretary of the Treasury, or his designee; (2) the Chairman of the Board of Governors of the Federal Reserve System, or his designee; (3) the Chairman of the Securities and Exchange Commission, or his designee; and (4) the Chairman of the Commodity Futures Trading Commission, or her designee.
Section 2. Purposes and Functions. (a) Recognizing the goals of enhancing the integrity, efficiency, orderliness, and competitiveness of our Nation's financial markets and maintaining investor confidence.
Oddly, Treasury Secretary Hank Paulson "said he hoped declines in housing prices had been largely offset for Americans by higher stock prices:"
Mr. Paulsen also happens to be one of the four people who can manipulate the markets through the use of futures options.
Given yesterday's comments by Mr. Bush, and if Hank Paulsen, and the Plunge Protection Team (PPT.. aka the President's Working Group on Financial Markets) continue to intervene, we probably will not see a drop on the Dow below 12,800. If they didn't intervene at all, we may be looking at 10,800.
