Is the Fed Plunge Protection Team Manipulating the Stock Market?

it's the POMO'S

sorry your analysis is flawed in the face of 30 billion /month in pomo's levered up.

now this doesn't mean it won't flop soon....but i can't determine this from you anaylsis.

The article: "Is the Fed Plunge Protection Team Manipulating the Stock Market?" says that the perception that the Federal Government is manipulating the stock market is an illusion.

The reason given, supported by evidence, is that when stocks are going up the Fed appears to be in control, but when stocks are going down the Fed appears to be out of control.

That doesn't mean that the Fed is not trying to control the Stock Market. It isn't a logical conclusion - if you try to recycle money so as to increase your bank's balances, and fail, that doesn't mean that you were not money laundering. Failing to achieve your objectives at control and manipulation does not mean that you were not engaging in manipulation and attempted control.

There is also a matter of "influence" which is not total control, but which is still a form of manipulation.

What i believe to be going on, is that investors do not themselves consider the propaganda and manipulative information put out by the Fed (i.e. figures that are poorer, but "not as bad as predicted", when the predictions referred to are plausibly intentionally skewed in order to create such "favourable" economic "news" - commonly called "political propaganda") as impartial and realistic, but that investors act by tacit agreement with other investors to behave as though the information is of high economic value.

The information put out by the Fed is always highly visible to all investors, and acts as a signal, in my view, that investors can, or even "must", act upon as though the information were reliable, not because the information has intrinsic value, but because the response of other stock-market traders - and the 'subjective trader', who has constructed herself or himself in terms of "the other stockmarket investors" - is predictable, and so, 100 percent economically reliable.

The manipulation, and attempts by the Fed to control the market, is of value to share traders in the market, because it enables them to "predict" when the market will rise.

There is therefore a tacit conspiracy between share-traders and the Fed. The Fed doesn't get control, but it gets the response it is seeking, because it is profitable for traders to provide it with what it wants for their own purposes - not because they are so easily duped!: The traders don't care if it is propaganda - they only care that it is a clear signal from the Fed, which has been broadcast to all other investors!

But look at it from the Fed's viewpoint! The Fed's attempts to manipulate the market always appear to be temporarily successful (and sometimes dramatically so for the weakest of "reasons") in stimulating the stockmarket. From the point of view of the Fed, their attempts to manipulate the market are successful - they do not themselves beleve that they have absolute control - at least by this methodology!*

*i.e. A "known unknown": Who knows what deeper levels of economic power and control may secretly exist - or what "war-games" algorithms that may have been written by skilled programmers perhaps with inside information, and that may have been strategically deployed; and what battles, or global economic "nuclear" war, might be being played out - all completely covertly, of course?! ...Or what the "nature of [their] game" might be - which might not necessarily be personal financial gain - and which would, if run over time across diverse economic domains, appear invisible to outsiders! i.e Not even confined to "private interests" - there are black ops in Government, and it would not be difficult to imagine market manipulation for covert purposes, including covert military purposes. Such purposes would include cyber-warfare, but would obviously not be limited to this, which is one of the most commonly discussed of cyber-attack fears - the national defence decision taken by the British government to make cyber-warfare the highest priority is one recent example. Covert money laundering by black ops for both hostile and operational-funding purposes is one other alternative possibility that springs to mind! Manipulation of the Tokyo Stock Exchange has only just been discovered, and this has threatened confidence in the Tokyo Exchange world-wide. This could be only the tip of an invisible iceberg - cyber market-manipulation is happening, but to what extent and to what purposes is definitely a known unknown - and even, conceptually-speaking, a known unknowable!