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BubbleVision
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   Topic: Can the Govt. stop markets from crashing?
Posted: 31/Oct/2006 at 11:38am |
The US PPT (Plunge Protection Team) looks like to trying to make a comeback in an earnest to peotect the Dow against any sharp fall
Here is an interesting report
In it, Crudele points out that
- Paulson is activating the Plunge Protection Team and someone wants us to know about it.
- Paulson is focusing much of his attention on making American financial markets more competitive . . .
- the Plunge Protection gang discuss the problems that might occur with hedge funds and derivatives, plus the "government's ability to respond to a financial crisis,"
- the Plunge Protectors would probably be the ones who'd fix the problem. In other words, they'd throw money at it.
Kulman i would like to know Buffets view on PPT.....
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kulman
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Posted: 01/Nov/2006 at 6:47am |
Intriguing, to say the least!
Such PPTs were active in India as well (UTI/LICs etc..) is it not Basantjee?
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Life can only be understood backwards—but it must be lived forwards
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basant
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Posted: 01/Nov/2006 at 7:41am |
Over the long term they rarely work no matter how much UTI tried stopping the rot after the 2000 tech bubble the index wanted to fall and it fell. Meanwhile UTI became invested in a set of DUDD stocks like DSQ and Pentamedia.On the other hand in June the spate of buying by LIC creates an optical concept that they were able to stem the rot whereas I would like to beleive that if Q1 and Q2 profits were below expectations we would have sunk again.LIC and UTI is indirectly using the common man's money.
But these things are good from the politician's point of view since they give the imnpression to the general public that the govt. is trying to control the markets (for their benefit.
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BubbleVision
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Posted: 01/Nov/2006 at 9:35am |
As far as i am concerned... No PPT has ever worked well in a market. They cant stop crashes.. They can only delay inevatiable...
We dont have to look far.... Look at what Saudis did in 2006... The prince declared that no one would incurr a loss to the tune of $75,000/- (Yes the govt chests were open for people to speculate in stocks) for investing (or trading) in stock markets and yet the markets kept on crashing...
I think there was a similar experience in HK when "Market Stabalization Fund" was created in the 1990's... which resulted in more destablized market.
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You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer!
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BubbleVision
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Posted: 01/Nov/2006 at 9:42am |
The opposition party's will use the PPT (if they dont stop the crash)... that the Govt wasted "Tax Payers hard earned money" to benefit a few rich prople who invest in stocks....
This is a mess which every Govt should aviod...
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You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer!
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basant
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Posted: 01/Nov/2006 at 10:04am |
Originally posted by BubbleVision
The opposition party's will use the PPT (if they dont stop the crash)... that the Govt wasted "Tax Payers hard earned money" to benefit a few rich prople who invest in stocks....
This is a mess which every Govt should aviod... |
But that happens in India because stock market investors make a very insignificant part of the vote bank. Say in 2030 when 30% of our population would be invested in stocks then markets would take priority over the farms.
On the other hand in the developed nations politics might actually drive the Govt. to take up a saviour's role - how much they succeed is a matter of complete guesswork (nonsense) though.
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'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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BubbleVision
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Posted: 01/Nov/2006 at 10:11am |
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I think that having a PPT is one of the surest way that the markets wont go up in the long term (I am not saying that the markets always goes up in the long term)... Look at Reliance on which the UTI made a ceiling at 350 for many years....
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