Dear John: I have read numerous columns you have discussed just how the plunge defense group stops sharp price come by getting certain futures agreements, which compels the purchase of shares to stop or slow down the free loss of stocks.
You seem to show that the plunge defense team contains members of the Federal Reserve as well as particular Wall Street bankers.
Can most of these individuals do significant damages to the economic situation as well as the Trump presidency by doing nothing?
It can lead to a major economic downturn– or perhaps anxiety. J.D.
Dear J.D.: Here are the realities.
In late 1988, President Reagan developed the President’s Working Group on Financial Markets. In 1989, Robert Heller, that had just left the Fed, suggested in a speech as well as later on in an op-ed in the Wall Street Journal, that the Fed must rescue the securities market whenever it enters into significant difficulty.
Based on those two facts, I’ve constantly been extremely suspicious that Washington, with the aid of buddies on Wall Street, has been protecting the market. That seemed to be proven throughout the Great Recession when United States Treasury Secretary Hank Paulson had countless calls with Goldman Sachs right in the center of the situation as well as right before markets began turning far better.
So, can these same individuals turn on Trump and let the marketplaces plunge?
Sure, other than that the majority of the gamers you describe additionally have their lot of money bound in the stock market.
The bigger concern could be: When the stock exchange begins to fall because there’s a bubble, will the same sort of people eagerly come to the market’s rescue?
Which solution am I simply do not know? Sorry.