I am not talking about Greenspan and interest hikes. I read about persons/institutions unknown that are able to manipulate the markets i.e.- The Plunge protection team and other large well heeled investors/institutions. Can anyone elaborate?

P.S. Is Greenspan a Democrat or Republican?

-- Ron (Ronpt@hotmail.com), February 01, 2000

Answers

See thread below: OT: stock indexes (Round numbers.)

How is that possible?

-- W (me@home.now), February 01, 2000.

Goldman Sachs is one of the largest investment banks on the planet. Chase, Citbank, JP Morgan, etc are others. They have trillion dollar deals that expose them to risks of many types.

In 1998 when Thai baht and Indonesia ruppea (sp?) collapsed due in my opinion to China undercutting their export markets and due to their own overextended expansion of their currency/money supply; the IMF with backing from US Treasury and FED Reserve put together a package that loaded some hedge funds like Long Term Capital Management withthe baht and ruppea by allowing LTCM to sell dollars and buy bahts and ruppeas.

Result: baht and ruppea stabilized but LTCM was now exposed to further erosion of billions of dollars which if they covered their positions by selling baht/ruppeas and buying dollars would call losses for other investment groups like Goldman Sachs and others. So Greenspan and Rubin (US Sec Treas) bailed out LTCM using US tax dollars.

Other investors firms, Goldman Sachs were still exposed to currency and interest rate fluxuations on the inflation side if dollar weakened. So GS led consortium to sell gold short to the tune of if I recall correctly 13 million ounces more or less or a short position of about 4 years of current annual gold production. This caused the price of gold to fall and as it fell the short positions could be rolled forward at a significant profit.

Enter Y2K liquidity fears and concern about deflation. FED and US Treasury issue about $290 billion of excess liquidity to address Y2K and defaltion. This finds its way into asset inflation especially internet IPO and .com stocks. Simultaneous other G& countries incl Japan, Australia, England etc also increase their countries' money supply for same reason. As I recall, japan has actually issued more yen than US has issued dollars.

So today the big investment banks and central banks have trillion dollar exposures in the futures/options/foreign currency/interest rate markets. However, these big players stioll hav ebig BIG assets base and can manage prices by buying a target to move price up or selling short with tremendous leverage to drive price down.

Fear is that Inflation will require significant rises in interest rates and cause the shorts to cover their sold out positions. If this happens stocks will go down, bonds down and gold and silver will go up.

One market that is difficult for the US to control is the OIL market. Price and availability is being stretched. This puts inflationary pressure and puts the BIG banks between the proverbial rock and hard place.

-- Bill P (porterwn@one.net), February 01, 2000.

Ron:

They apply their assets where they have the greatest leverage at any given moment in time.Usually options on futures and stocks,nearby index futures, etc.

-- James (brkthru@cableone.net), February 01, 2000.

Is manipulation of stocks for financial gain illegal?

-- Jerry (JThoms@aol.com), February 01, 2000.

I think you are referring to the manipulation of the perception that the market is well. With so much attention paid to the DOW Industrial Average, its health is used by many American as a health indicator for the overall market. Since the DOW is only 30 stocks, a large influx of capital into DOW indexed options should do the trick. This is why the DOW makes huge gains while the broader indices suffer. The average person hears that the stock market (ie DOW) did well, so everything must be OK.

-- Chris Tisone (c_tisone@hotmail.com), February 01, 2000.

See the folowing:

Gold Anti Trust Action

Gold-Eagle.com

The manipulation is being investigated by several US Senate and House committees to see if it violates anti trust laws.

Investigations continue.

-- Bill P (porterwn@one.net), February 01, 2000.

Financial gain is not an issue ,the manipulations are political in nature.

-- James (brkthru@cableone.net), February 01, 2000.

Chris, re the DOW;

Last fall Dow Jones changed the companies that are included in the Dow by adding Intel, Microsoft, SBC, and Home Depot replacing Chevron, Sears, Goodyear and one that i cant remember. This makes it easier to manipulaye boththe Dow and the NASD by focusing on a few stocks namely Intel and Microsoft.

-- Bill P (porterwn@one.net), February 01, 2000.

Better links:

Le Metropole Cafe

Gold-Eagle.com

-- Bill P (porterwn@one.net), February 01, 2000.

Bill, Oh yeah. I forgot about that one. We can change the composition of the DOW at will, without warning to reflect "the new age economy". There was no advance warning when the DOW dogs were removed and the stellar achievers replaced them. I wonder if there is a way to calculate what the DOW would be today had the dogs remained in place.

-- Chris Tisone (c_tisone@hotmail.com), February 01, 2000.

Factor in womanipulation.

-- dinosaur (dinosaur@williams-net.com), February 01, 2000.