Washburn's World

My take on the world. My wife often refers to this as the WWW (Weird World of Washburn)

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Location: Germantown, Wisconsin, United States

I am a simple country boy transplanted from the Piehl Township in northern Wisconsin to the Milwaukee metropolitan area who came down "sout" in 1980 for college and have stayed in the area since.
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Tuesday, September 30, 2008

Plunge Protection Team = Plunge Provocation Team?

The President's Working Group on Financial Markets is colloquially know as the Plunge Protection Team (PPT). If one believes the PPT has the power to artificially prop up the DJIA by systematically buying Dow stocks, one must concede the PPT has the power to artificially depress the DJIA by systematically selling Dow stocks or by executing put options.

My complaints (here, here, and here) with the bailout plan have centered on the power aspects; specifically the creation of an Emperor of the Treasury.

Given the power of the PPT, I find the comments of President Bush ominous.
  • In his comments from the Diplomatic Reception Room of the White House, Bush pointed to Monday's drop in the Dow Jones industrials.
    "The dramatic drop in the stock market that we saw yesterday will have a direct impact on retirement accounts, pension funds and personal savings of millions of our citizens," he said. "And if our nation continues on this course, the economic damage will be painful and lasting."
This manipulation: Give us your Liberty or we will take your Prosperity, as noted by Congressman McCotter during the debate on the bailout bill, is a recurring threat.

Circumstances change, but principles endure. Because of this Andrew Jackson's words from 1832 endure and are as true today as they were then. When politically-connected, rapacious bankers (i.e. banksters) demand "Give us a handout or else." the power and privilege demanded are the same.
  • Under such circumstances the bank comes forward and asks a renewal of its [The Second National Bank of the US] charter for a term of fifteen years upon conditions which not only operate as a gratuity to the stockholders of many millions of dollars, but will sanction any abuses and legalize any encroachments.
The power demanded under the Paulson/Bush plan is a gratuity to the politically-connected which would sanction any abuse and legalize any encroachment.

It is good it went down yesterday. Unfortunately it will be back because they only need to win once.

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