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Afternoon entertainment: Who Dunnit? Invisible hand suspects

Stock indices being supported, pushed to risk on everyday when Europe opens. Why?

Some possible reasons.

problem

 

 

But the nastiest one could be this

Waiting to go Kaboom!

German-GDP-versus-Deutsche-Bank-gross-derivatives-exposure

(Source: http://www.valuewalk.com/2016/02/deutsche-bank-cds/)

Why do we bring this topic up?

 

Because the clock may already have started ticking.

2016-05-24_16-36-07

 

Coming to the question of ‘invisible hand’, it may be possible that stock indices are being artificially levitated to project an image of normalcy while things are breaking down.

 

 

Who has the means and motive to do it?

US players: Fed, Treasury, primary dealers (banks), exchanges

the-plunge-protection-team-ppt

The Plunge Protection Team is a panel that includes Fed Chairman Ben Bernanke, Treasury Secretary Henry Paulson, Securities and Exchange Commission Chairman Christopher Cox, and acting Commodity Futures Trading Commission head Walter Lukken. According to John Crudele of the New York Post , the Plunge Protection Team’s (PPT) objective is to redirect the stock market by “buying market averages in the futures market, thus stabilizing the market as a whole.” In the event of a terrorist attack or a natural disaster, the group’s activities could play an extremely positive role in saving the market from an unnecessary meltdown. However, direct intervention into supposedly “free markets” is less defensible when it is merely a matter of saving an over-leveraged banking system from its inevitable Day of Reckoning. And, yet, that appears to be the reason for the White House confab.
The psychology behind the PPT’s activities are explained in greater detail by Robert McHugh Ph.D. who provides a description of how it works in his essay “The Plunge Protection Team Indicator”:
“The PPT decides markets need intervention, a decline needs to be stopped, or the risks associated with political events that could be perceived by markets as highly negative and cause a decline, need to be prevented by a rally already in flight. To get that rally, the PPT’s key component — the Fed — lends money to surrogates who will take that fresh electronically printed cash and buy markets through some large unknown buyer’s account. That buying comes out of the blue at a time when short interest is high. The unexpected rally strikes blood, and fear overcomes those who were betting the market would drop. These shorts need to cover, need to buy the very stocks they had agreed to sell (without owning them) at today’s prices in anticipation they could buy them in the future at much lower prices and pocket the difference. Seeing those stocks rally above their committed selling price, the shorts are forced to buy — and buy they do. Thus, those most pessimistic about the equity market end up buying equities like mad, fueling the rally that the PPT started. Bingo, a huge turnaround rally is well underway, and sidelines money from Hedge Funds, Mutual funds and individuals’rushes in to join in the buying madness for several days and weeks as the rally gathers a life of its own. (Robert McHugh Ph.D., “The Plunge Protection Team Indicator”)

(Source: The Market Oracle http://www.marketoracle.co.uk/Article4074.html)

A.k.a. Working Group on Financial Markets 
(Source: https://en.wikipedia.org/wiki/Working_Group_on_Financial_Markets)

 

China: China Securities Regulatory Commission (CSRC), stated owned banks, brokers
csrc
(Source: http://www.csrc.gov.cn/pub/csrc_en/about/who/)

A.k.a National Team

The China Securities Regulatory Commission, which polices the country’s markets, organized the purchase of shares using cash supplied by the central bank. Much of the actual buying has been carried out by China’s so-called “National Team,” a group of state-backed investors, brokerages and funds that have purchased shares at the government’s behest.

(Source: http://money.cnn.com/2015/09/08/investing/china-stock-market-bailout-beijing/)

 
Supranational: Bank for International Settlements

(Source: http://www.bis.org/publ/bppdf/bispap24.htm)

(The conspiracy that doesn’t go away: http://www.globalresearch.ca/the-tower-of-basel-secretive-plans-for-the-issuing-of-a-global-currency/13239 and this http://www.conspiracyclub.co/2015/04/12/secretive-group-runs-the-world-bis/)

Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’. Operates multiple strategies.

“Dear reader, I do not have a financial license to give advice. I do not know you the reader. Your financial objective and risk tolerance may be different from mine. I am not responsible for any consequence of your action.

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One thought on “Afternoon entertainment: Who Dunnit? Invisible hand suspects”

  1. Tan Teng Chew says:

    aha.. the invisible hand.. thanks for the article! Guess small timers at their mercy then… =(

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