STREET DOGS: Working committee on markets doesn’t work
The Reformed Broker says the idea of a Plunge Protection Team is demonstrably ridiculous
Renowned US investor Asher Edelman was on CNBC’s Fast Money last week rehashing the old story about how a "working committee on markets", known as the Plunge Protection Team, established under president Ronald Reagan to "stabilise" markets, is currently keeping US markets at near record highs. According to Edelman, the team is "run by the head of the SEC, head of the Commodities Trading Group, secretary of the Treasury and head of the Fed", reports only to the president and works with the banks, "typically, JP Morgan, Morgan Stanley, Goldman Sachs", to execute orders on all exchanges when they feel the market "is not behaving as they would like it to behave". Commenting on the claim, The Reformed Broker, Joshua Brown, says it’s demonstrably ridiculous. "Especially when you consider the fact that we’ve seen the market cut in half twice during the past 17 years, with dozens of instances of 10% and 15% corrections all along the way over the past 29 years since the end of Reagan’s term....
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.