The Plunge Protection Team Blog

Paul Kedrosky has a great idea that The Plunge Protection Team Blog wholeheartedly endorses:

I think we need to create a drinking game around U.S. Treasury Secretary Henry Paulson. Feel free to add subprime/bailout/SIV items, but here some of mine around U.S. dollar policy:

• When Paulson says he has been "very clear" about the dollar, take a drink
• When Paulson says "A strong dollar is in our nation's interests", chug the drink

Now the only major problem we see with this game is that besides being crazy-drunk within a short period of time, we'll also be so broke due to the crashing dollar that we won't be able to afford the imported scotch we like.

MarketWatch brings us this gem: Bernanke may have tough talk for glum Wall Street

Ben Bernanke may not have many soothing words for Wall Street this week as the Federal Reserve hammers home its point that it will take more than a modest economic slowdown to pry loose more interest rate cuts.

So now that Bernanke has thoroughly thrashed the dollar and made a joke of interpreting our government's inflation numbers, he's going to "talk tough"? Did someone finally point out what's happening to the price of oil and the price of gold? Is the Fed starting to get a little worried? I don't think Wall Street is all that concerned with Bernanke's tough talk. They know he'll be there to rescue the stock market again as soon as he's truly needed. The Bernanke free money put is still in play

Stay tuned for fun on Thursday as Bernanke testifies before the Joint Economic Committee.

Easy Money Ben Bernanke has been great for holders of gold. Under his chairmanship gold has gone from $466 an ounce on October 24, 2005 to today's price of $800 an ounce. Can't say he's been as good for holders of US Dollars.

Thanks goes out to one of our favorite blogs, The Mess That Greenspan Made, for putting the work in on the chart: Golden Ben Bernanke

And David Merkel, another of our favorite bloggers, points out that since the last FOMC meeting:

• Canadian dollar up 7%
• Euro up 5%
• Swiss franc up 3%
• Yen flat
• The S&P 500 returns 4.5%

And to think, he managed to do all that at the same time as we had low to no inflation! (sarcasm fully intended)

Our friends in the UK have put up an interesting article detailing the ways in which the sky has already fallen:

• The median price of US houses has crashed from a peak of $262,600 in March to $211,700 in September. This is an 18pc drop nationwide...
• Merrill Lynch has just confessed to a $7.9bn write down on CDO subprime debt and assorted follies, nearly double what it suggested three weeks ago....
• In Britain, we have had the first bank run since the City of Glasgow Bank collapsed in 1878.
• The Fed has cut the interest rates a half point and vastly increased the pool of eligible collateral for Discount operations.
• The European Central Bank has injected over €400bn of liquidity in the biggest intervention since the euro was created....
• The US dollar has fallen below parity with the Canadian Loonie for the first time since 1976, and to all-time lows on the global dollar index.

But not to worry! The Plunge Protection Team will do everything in their power to keep stock markets up and Americans oblivious to the destruction of the US Dollars sitting in their savings accounts.

Welcome to the PPT web roundup. The web roundup will be a regular feature on this blog where we link to some of the most interesting news and analysis of the Plunge Protection Team found on the internet.

Today's roundup:

Todd Harrison, a sort of anti-Cramer who used to work for Cramer, confirms what we've been saying. The Plunge Protection team is now out in the open and very, very busy.

We used to huddle in hushed tones and talk about “the invisible hand” or the “plunge protection team.” We did so for fear of being called conspiracy theorists or, worse, unpatriotic. The thought that there was a hidden force seemed bizarre. I was taught that nobody was bigger than the market. Most certainly, if there were games being played, it would eventually come out.

Still, some of the my most trusted and widely respected sources confided in me that they saw it as well. They did so in confidence as Wall Street is a small place where credibility is the gateway of continuity. I, too, held my tongue for fear of retribution or consequence. Even still, to this day, there are folks that will view this column as financial sacrilege.

So what now gives this topic license for discussion? Treasury Secretary Hank Paulson, who recently said, matter-of-factly, that there is indeed a Working Group on Financial Markets in force and at play. Further to that, he has openly held discussions with Wall Street firms and hedge fund managers in an attempt to gain leverage in the financial equation.

Money Matters delves into just how active the PPT has been lately:

The Plunge Protection Team holds more meetings. They are desperate to find some Hail Mary play to save their financial houses from destruction as the SIVs now go off the cliff.

If you have news to add to the roundup, post it in the comments below.