Trump Plans to Convene Plunge Protection Team (PPT)

In lieu of firing Powell, President Trump has a new idea: Convene the PPT

President Trump now advocates intervening in the markets if he does not like the direction of the stock market. This is seriously crazy, but please consider Top Trump official calls bankers, will convene 'Plunge Protection Team'

U.S. President Donald Trump’s Treasury secretary called top U.S. bankers on Sunday amid an ongoing rout on Wall Street and made plans to convene a group of officials known as the “Plunge Protection Team.”

“Today I convened individual calls with the CEOs of the nation’s six largest banks,” Treasury Secretary Steven Mnuchin said on Twitter shortly before financial markets were due to open in Asia.

The Treasury said in a statement that Mnuchin talked with the chief executives of Bank of America (BAC.N), Citi (C.N), Goldman Sachs (GS.N), JP Morgan Chase (JPM.N), Morgan Stanley (MS.N) and Wells Fargo (WFC.N).

“The CEOs confirmed that they have ample liquidity available for lending,” the Treasury said.

The Treasury said Mnuchin will convene a call on Monday with the president’s Working Group on Financial Markets, which includes Washington’s main stewards of the U.S. financial system and is sometimes referred to as the “Plunge Protection Team.”

The group, which was also convened in 2009 during the latter stage of the financial crisis, includes officials from the Federal Reserve as well as the Securities and Exchange Commission.

Seriously Crazy

This administration is seriously crazy.

Might I point out there are already breakers if the market falls too far, too fast. Also note that Yapping No Longer Works.

Here's the Bear Market Reality: Expect Much Worse.

The PPT isn't going to stop the decline unless it buys the entire market.

Dear Secretary Mnuchin, I have a question, if the stock market is undervalued and investors will rotate from bonds to stocks as you stated, why do we need a PPT?

Of course, Treasury Secretary Mnuchin is Totally Clueless About How Markets Function. It is mathematically impossible for investors to rotate into stocks.

Wow. Such stupidity.

Mike "Mish" Shedlock

Comments (36)
No. 1-16
Petersticks
Petersticks

Mish, can you explain why is it mathematically impossible? If I’m not mistaken Martin Armstrong is calling for that same scenario with the sovereign debt crisis. Thanks.

2banana
2banana

Besides taking and jawboning...

What can they really seriously do?

killben
killben

If Trump wants to ensure a crash, this is way to do it. Time somebody lit a fire to the tinder of overvalued stocks.

Six000mileyear
Six000mileyear

I think President Trump is calling the top US bank CEO's / PPT before any of the first level market circuit breakers are activated in order to soothe the market with words instead of shots of liquidity. Trump has to know Wall Street will listen to itself more than the President. Since CEO's all claim they have strong balance sheets and sufficient liquidity, Trump can say the CEO's lied about their strength when the liquidity crisis DOES hit. The FED can then be dismantled for "just cause", its members misleading the president about their financial health.

The question is how does the liquidity crisis transpire, inside or outside the US? A hard Brexit is a good candidate. Italy is having problems. China has manufacturing and real estate gluts, along with the debt to create them.

AWC
AWC

Not quite there yet, but this all culminates in a statement along the lines of "Whatever it Takes." Including direct purchase of equities, securities (Pensions?) and the launching of some scheme like a "Universal Basic Income." I wouldn't sell these nuts short. They are capable of stunts beyond the wildest imaginations.