Talk:Working Group on Financial Markets/Archives/2012

Plunge Protection Team

Does anyone have access to the full text of the Wikipedia page that was "merged" into this one? I recall it had some references that would be worth including. --RayBirks 19:48, 26 July 2007 (UTC)

Put "Plunge Protection Team" into the Wikipedia search field. The page Working Group on Financial Markets will come up. Near the top of the screen, just under the title, you'll see the words "(Redirected from Plunge Protection Team)". Click on the link for Plunge Protection Team to go to that page (or click on the earlier link in this post). You can then look at its history to go to an earlier version of the page. — Mateo SA (talk | contribs) 20:51, 26 July 2007 (UTC)

Thanks! --RayBirks 20:53, 26 July 2007 (UTC)

Conspiracy Theory

The reason it is a conspiracy theory is that it is something that cannot be proven and is very far-fetched. The belief is that the Fed and/or Treasury are illegally buying S&P futures and stocks, with the underlying idea that they are in cahoots with Wall Street. Neither the Fed nor the Treasury are permitted to purchase stocks or futures for the government.

Also, I fixed the grammatical error 'an orchestrated', not 'a orchestrated'. Sposer (talk) 19:29, 5 May 2008 (UTC)

" Well, they bought AIG didn't they? --12.173.150.195 (talk) 17:56, 21 September 2008 (UTC)

No, they will own AIG if they default on their loans. In the case of Fannie Mae, Freddie Mac, we are talking about a nationalization. In none of these three cases was a single share purchases. And, the share holders still own all three as of now, although there are provisions for nationalization to pay back loans, etc. Remember, the conspiracy theory is that the Fed and Treasury are secretly and illegally buying stock index futures and index funds to somehow prop up the markets. As you should know from the Bank of England's failed attempt to save the pound, even governments cannot stop a market that needs to fall.Sposer (talk) 03:12, 22 September 2008 (UTC)

Again, the referenced article even calls it a conspiracy theory, and that is what it is. It is ridiculous to call it anything else. Nobody is saying that the Fed or other parts of the Government do not provide deep "moral suasion", but this conspiracy theory is tied to the incorrect notions about the powers of various U.S. government institutions and the idea that the Treasury or the Fed are buying stocks and futures outright.Sposer (talk) 15:00, 28 May 2008 (UTC)

Conspiracy fact is more like it. You say "something that cannot be proven" when the working group openly admits to the manipulation. They openly "conspire" to prevent the market from declining. This article needs some serious attention. There are literally hundreds of articles that could be referenced to prove this fact. Too bad I don't have the time to put in the effort.

The Federal Reserve and U.S. Gov't manipulate interests rates, pump liquidity into the markets, bail out banks, change the way statistics are reported to make the economy look better than it is (M3, hedonic adjustments, GDP, inflation rate etc.), supress the price of gold http://en.wikipedia.org/wiki/Gold_Anti-Trust_Action_Committee and commodities through repurchase agreements and gold swaps thereby artificially propping up the $USD. Tell me then, why is it so hard to believe that they also manipulate other markets?

It's a travesty that a manipulation of this magnitude and proveability is relegated to a just a conspiracy theory on Wikipedia.

Ahh, GATA. I didn't know they were still around. Hedonics works both ways: Suppresses price increases, and the subsequent drops. And it is clearly noted in the statistics. The Treasury's (not the Fed's) currency interventions are ultimately announced as well, after the fact. The U.S. government has little control over long-term interest rates, and right now has little control of LIBOR (see the TED Spread). I am not saying that I think the Fed or the gov't has had it right nor am I necessarily agreeing or disagreeing with any of their actions, be it LTCM, etc. But, all of these things are public and known. The conspiracy theory is the extra stuff about the Fed or Treasury buying stock futures. My opinion is irrelevant anyway. But, the idea that the U.S. Gov't, through the Working Group, or any other mechanism, is buying stocks or stock futures and that they can stop or turn a market that isn't going to turn anyway, is just plain silly. Just ask the Bank of England. Sposer (talk) 02:39, 16 May 2008 (UTC)

As members of GATA have said the suppression of the gold price IS slowly failing. If they were sucessfull then prices would still be around $250 per ounce and not $900. I guess my point is that to use the label "conspiracy theory" in this day and age is pejorative and has the effect of a thought terminating cliche which prevents further investigation. Wikipedia should be about promoting further investigation and deeper understanding and not just label any poorly understood subject that challenges common belief a conspiracy theory.

It should be common knowledge that the Federal Reserve and many other central banks around the world are private banking cartels and the members of theses institions have powerful wealthy friends in the the financial world. These cartels do have the power to control markets...and sadly to their advantage. And the Fed does have a great deal of control over our gov't. I certainly didn't get to vote for Bernanke or Greenspan. Did you?

The facts are out there in rather common financial new sources which aren't necessarily the common news for the average person. It takes a long time and a lot of reading and an understanding of the big picture to see. The average Joe wouldn't be able to glean to truth from these sources, but if he wanted to learn the purpose of the PPT, he hopefully could come to Wikipedia and read a nice compact explanation. I would hope the truth could be exposed on a public resource such as Wikipedia and referenced to promote understanding.

Like I said I wish I had the time to expand the article because I know in my own cummulative daily reading over the years I have discovered facts which fly in the face of just theory. —Preceding unsigned comment added by 98.213.107.20 (talk) 00:25, 17 May 2008 (UTC)

Sposer wrote that AIG was not nationalized, that it will be only if they default on their loans. "Neither the Fed nor the Treasury are permitted to purchase stocks ...In none of these three cases was a single share purchases."

Barry Ritholtz disagrees with you in his excellent book Bailout Nation. "AIG was effectively nationalized on September 17, 2008, with Uncle Sam picking up 79.9 percent of the former Dow component."

Furthermore, please consider GS and the warrants the government bought from them. Warrants that give the holder the right to purchase stocks are what if not a form of shares?

And please don't talk about the nonsense of Hedonics. Have a look at Bill Fleckenstein's Greenspan's Bubbles to see a concise explanation of why it is absolute nonsense. (It had to do with reducing the official rate of inflation to save money on social security etc. indexed to this rate.) Ask yourself how there can be an increase in GDP without somebody's income having gone up. In any case it has nothing to do with the topic.

In any case the term "conspiracy theory" is a loaded one. Take a very recent example: Just because I can't prove that WTC no.7 was not brought down in near free fall speed by fire doesn't make the official theory a plausible one. (Leaving aside the fact that the official theory is ALSO a conspiracy theory of mainly Saudi hijackers having done it.)

The above is not meant to contradict your point of the FED not having bought index futures etc. I don't know if they did or not. How do you know? (Just because something is illegal doesn't mean it will never be done.)

Gatorinvancouver (talk) 17:24, 6 September 2009 (UTC)

First of all, the point I was making is that stock was not purchased in the open market. Like FNM and FRE, the govt owns warrants and pfd stock and I think now common stock in return for taking assets. So yes, it was nationalized, etc. But, that is not a conspiracy theory. It is out in the open and was done in public and everybody knew about it. The conspiracy types are promoting the Fed or Treasury illegally was buying and selling shares and futures in the open market as a way of supporting the markets. As for WTC 7, I know little or nothing about it, and have no reason to comment on it. And as far as hedonics, it makes perfect sense and is 100% correct and belongs in the inflation calculations, in my opinion, not that that is relevant to the article. There is no underhanded reason for it, outside of smoothing a volatile time series. Sometimes it makes inflation lower (as it did when gasoline was rising in price), and now, as gasoline collapsed, it made inflation appear higher than it was. It works both ways, but the conspiracy theorist folks only talk about it when it favors their argument. Also, as I said, the conspiracy theories are about the govt buying things illegally in the open market.That is not what warrants are. But, folks that believe in this stuff, love to twist words. Also, where did I say that hedonics were there for the reason of lowering the inflation rate, since I said above it works both way? I remember writing someplace about it helping CPI at one point, but I can't find, and am sure I never gave that as a reason for using it, since hedonics works in both directions.Sposer (talk) 19:58, 6 September 2009 (UTC)

Sporer wrote: "First of all, the point I was making is that stock was not purchased in the open market."

No this is NOT the point you made above. (Please look at your own words: "In none of these three cases was a single share purchases")

Of course the government didn't buy the shares in the open market because there was no market. (Remember how the price of Bear Stearns went from $ 2.- to $ 10.-? If you call that a market the Soviet Union was a market economy.) I didn't say the warrants were bought illegally. I only responded to your erroneous assertion that the government did not buy any shares. (See above) Now you are saying that they were nationalized.

As to your assertion that the government got assets in return for the cash infusion: How do you know if these are assets or liabilities? They are called "toxic assets" for a reason and nobody knows what "assets" the government got from AIG.

The fact remains that you wrote that there were no share purchases only loans.

I'm not taking sides of the "conspiracy theorists", or your side. I don't know what exactly transpired. I have my doubts there was a conspiracy but unlike you I do not claim to know. I only mentioned WTC 7 (where NIST took 5 years coming up with "an explanation", for a building collapsing in its footprint in near free fall speed because of a fire, a historical first leaving aside WTC 1 and WTC 2)) because you went on about conspiracy theories.

You also wrote: "where did I say that hedonics were there for the reason of lowering the inflation rate?"

Of course you didn't write this.

I did because you brought in hedonics. The Boskin Commisssion (http://en.wikipedia.org/wiki/Boskin_Commission) is a historical fact. Fleckenstein shows quite clearly why the notion is nonsense and Krugman made some fun of it in one of his columns. Hedonics squares the circle by inventing GDP with no increase in incomes. That's not the kind of economics I studied. And although I have not read the Commission's report I doubt that they wrote that it works both ways. (Please provide a reference if I am wrong.) It would still be nonsense like so much in economics. There are no free lunches, there can be no GDP without a corresponding increase in incomes. I took Economics 101 in 1968 and highly doubt that the fundamental equations - true by definition - have changed.

Factoring out inflation IS a tricky problem with no definitive solution because of the index number problem, i.e. you get one result if your base year is say Year 1 and another if your base year is Year 10. No need to invent hedonics and get the mileage the (former) Maestro got out of it. It's ideology, again, like much of economics.

Gatorinvancouver (talk) 17:01, 7 September 2009 (UTC)

Gatorinvancouver - The only point I have ever meant to make, regarding the PPT conspiracy theories, is that there was never any underhanded and unexplained purchases of stocks in the open market. I apologize if I was misleading, as I didn't mean to be. We all know that in return for taking on toxic assets, that the govt now has equity ownership in multiple banks and in AIG. There is no conspiracy there, because it is known and it is out in the open. And, nobody questions that the Working Group exists. As for hedonics, the definition is merely one of smoothing. The price of gasoline went from $2+ to $4 and back to less than $2 in the course of about 18-months. However, gasoline in the CPI never showed 100% gains and more than a 50% drop, did it?Sposer (talk) 19:38, 7 September 2009 (UTC)

"There is no conspiracy there"

I agree with that.

Not to promote Ritholtz - only because I just finished reading the book - he has an interesting "sidebar" about this on pp. 56-58 which finishes a review of the returns of the S&P 500 since 2000 by asking "Geez, how incompetent must a secret market-manipulating organization [i.e. the PPT] be before someone gets fired?"

In other words if it is a conspiracy the conspirators are nincompoops.

But that doesn't justify your comments I was reacting to especially your obstinacy to see the idiocy of hedonics. I told you above that it is impossible to "smooth" data in an objective way among other things because of the Index Number Problem. (Not to repeat that you CANNOT have GDP without NI by definition.)

But this has got nothing to do with the subject under discussion. You brought it in for reasons only known to you. Gatorinvancouver (talk) 01:56, 8 September 2009 (UTC)

Not sure how I got there on hedonics either. It isn't part of the discussion. Probably was adding other stuff to the discussion, which I guess was a mistake. I will study some of the other impacts more carefully. I was mostly focusing on CPI.Sposer (talk) 10:23, 8 September 2009 (UTC)

You may want to read about the so-called "index number problem" I mentioned above, i.e. different results depending on the base year you choose. It cannot be overcome. Furthermore, changes in the composition of goods produced present another problem, e.g. the price of buggy whips in the early days of the car. Or how do you compare 2 years - say in t1 and t20 - in an index that includes the first Atari computer in t1 and a Pentium 3 in t20? (This is very close to what the inventors of "hedonics" tried to do but one can't square the circle: We are talking about different products and not just price changes of products in t1.) I'll repeat again that it was a politically motivated attempt to reduce social security and other payments by coming up with a lower inflation rate than would have been obtained with previous methods. A good start would be here: http://en.wikipedia.org/wiki/Price_index Fleckenstein's Greenspan's Bubbles is a short interesting book, which also deals with 'hedonics". But we are a long way from the PPT and I'm not sure if we are violating Wikipedia's guidelines (e.g. "this is not a forum"). So maybe we should do this - if there are further comments - on my talk page. :

Gatorinvancouver (talk) 18:16, 8 September 2009 (UTC)

Fannie Mae and Freddie Mac

The plan that Treasury is promoting is not yet approved. It is also not part of the Working Group directly. Share purchases have not been approved by Congress, and they have not purchased any shares in these firms yet. This conspiracy theory remains just that. If the stock purchases are approved, it does not change the past, nor does it necessarily making it part of the Working Group. It becomes a legal government bailout, and not an underhanded, illegal, action, as is alleged by the conspiracy theorists with regard to the Working Group/PPT.Sposer (talk) 18:06, 14 July 2008 (UTC)

No longer a conspiracy theory

Let's be real about this. The current Fannie Mae episode exposes this as no longer a conspiracy theory. The Treasure, SEC, and the Fed (all part of the Working Group) are working together to purchase shares on the market to prop it up. If Fannie Mae and Freddie Mac shares drop to zero it will cause widescale market disruption. Their direct manipulation, and threatened manipulation, of these shares has moved the PPT from arguably a conspiracy theory to a well established fact. —Preceding unsigned comment added by 75.100.189.26 (talk) 19:31, 14 July 2008 (UTC)

The article now makes clear, with references, that some writers believe in the manipulation, and some call that claim a conspiracy theory—without taking sides. ~ priyanath ^talk 19:06, 21 September 2008 (UTC)

Sposer, it would help the article to have the names of real live notable writers or analysts who are calling it a conspiracy theory, or who are debunking the theory—using WP:RS reliable sources. And the article has to say it essentially as the sources are stating it. For example, if a notable writer is just debunking it, you can't say they are calling it a 'conspiracy theory'. Read and study WP:VERIFY and WP:No original research and you'll understand why the statement in the article needs to be referenced, and actually correspond to what the reference says. ~ priyanath ^talk 23:12, 21 September 2008 (UTC)

Priyanath - People don't waste time writing articles debunking pure fiction.Sposer (talk) 02:32, 22 September 2008 (UTC)

But they do—the Boston Globe article did alot of debunking. It's actually an interesting read, and explains how the theory started. It just didn't name notable people who dissed the theory (it did reference a couple of analysts). Read the article and see what you can get from it. Either way, it's still not an excuse to add your own commentary to Wikipedia articles. You should know that. ~ priyanath ^talk 02:48, 22 September 2008 (UTC)

The Baum article makes fun of it too, but that is the point. It is a running joke, and every once in a while I guess somebody caves and gets tired of some of the stupidity surrounding the Working Group. This article should merely mention that there is a fringe group (wouldn't call it that, because that is too POV) that believes the PPT malarkey and leave it at that. What you put in makes it sound like anybody that is not a conspiracy theory proponent actually believes the Fed is buying futures. Now, I certainly believe the govt uses moral suasion, and the Working Group also is certainly involved with the recent bailouts, but none of that is illegal, nor is it shady. There are so many tools the government can use (like what they just did, halting shorting, bailouts, changing margin rules, forcing hedge funds to report) that there is no reason to illegally intervene. These articles are like magicians -- they use a simple and likely fact like moral suasion, and musings of a Fed board member that maybe this would be a good idea going forward -- to confuse you and sell books and newspapers. Sposer (talk) 03:07, 22 September 2008 (UTC)

Recent Edits Re: Money Supply and Repos

User Hogeweg is adding irrelevant information to the article, arguing that there is no evidence of any illegal activity, because the government could have changed or lied about the releases that would have shown the footprint of any PPT illegal activity in futures, stocks and money. Of course, that is the whole point of conspiracy theories. There is no way you can fight them, because the theorists turn everything into an illogical tautology. If the user wishes to write an article on the different ways that the govt could have theoretically perpetrated said conspiracy theory, and add it as a see also, that would be reasonable. But, to go through one, or a list of the different ways this non-existent silliness could have been perpetrated, does not belong in the article. It is an article on the PPT itself, not on the conspiracy theories involving them.

Nobody denies that there is a PPT. The issue is that they are a known group, that acts in a way as prescribed in the article, not by illegally intervening in the market. Treasury legally intervenes in currency markets. The Fed legally intervenes in Treasuries. Neither buy or sell futures or stocks. Even the ownership of common stock now, due to bailouts was granted. At some point, I gather that will be sold, but this is not what the conspiracy theorists are referring to, and nobody has discussed how it will be sold. Sposer (talk) 02:08, 2 September 2009 (UTC)

User Sposer is clearly not reading, or possibly understanding the references 1,2 and 3 affixed to "Repo" and "M3". If there is; or is not; an extramural intervention in the stock market, this can easily be solved by reinstitution of the M3 publication. (wich publication is now withheld since 2006: - Quote: On March 23, 2006, the Board of Governors of the Federal Reserve System will cease publication of the M3 monetary aggregate. The Board will also cease publishing the following components: large-denomination time deposits, repurchase agreements (RPs), and Eurodollars. Unquote). In Ref. 2 John P. Hussman, Ph.D. outlines where and when RP's came up in a possible market manipulation. The general public in reading this whole article, has a right to be referred to possible references or solutions when User Sposer makes a reference to "conspiracy theory". User Hogeweg is merely accommodating that by adding a possibility that will make absolutely clear that the market IS or IS NOT being manipulated. Society at large has a right to proper information and publication of all RP transactions will help to reach that. Furthermore user Sposer in keeping a stranglehold on the earlier text is not helping that same society at large, he is simply defending "ONE" view only, while being employed by a party that could well be influenced if any final solution of that very same theory was found.

ALSO: Here above User Sposer writes: "arguing that there is no evidence of any illegal activity" - a plain proof he has not even read the text, nor references that were added. User Hogeweg does NOT imply that view, his is a "middle of the road" solution, given as a scholar with no ties, no employment, nor investments on the stock market; he merely shows a way that could solve this (possible) Theory positively or negatively, once and for all.

PS It also appears that any addition to the earlier text in general (re)acts as a red flag on a bull (or for that matter: bear). Hogeweg (talk) 22:08, 2 September 2009 (UTC)

I have read the text. The article is not about conspiracy theories revolving around the PPT. Furthermore, I am referring to something quite different from what you are referring to. I haven't even heard about suggestions of the govt being in on the 2008 market slide. I am referring to the 1987 proponents of Feds buying futures. However, adding OR and suggestions on how to refute conspiracy theories does not belong here. The article is about what the PPT is. Mention that there are theories can go here, but a detailed discussion of any such belongs in a separate article. The implication is that M3 was halted to hide something, and that is a further evidence of proposing conspiracy theory ideas in the edits. Same for suggesting the government publish repo data. The Fed publishes its repos, right?, but individual firms need not publish their repos among themselves, so not sure what you are referring to. As far as the "one view", it is the view of all but the small number of conspiracy theorists. To have an article spend half its space discussing something that a tiny percentage of the public and even fewer experts believe to be true is inappropriate and misleading to Wikipedia readers.Sposer (talk) 01:46, 3 September 2009 (UTC)

Two points. (1) Nobody says they do not intervene in the repo market, or buy and sell Treasuries, mortgage backeds (now) and FX. That is what M3 and Repo publishing would show. The conspiracy is that they are buying and selling futures and stocks. I understand that a massive purchase of stocks would lower M3, but not if they succeed in raising the value of stox in the reporting period (remember, M3 is balances, not flows). (2) No self respecting conspiracy theorist would believe a govt number. They would say the numbers are fudged.Sposer (talk) 09:43, 3 September 2009 (UTC)

User Sposer appears to maintain THE stranglehold over this article, even after his last overhaul of the article. Particularly his concluding sentence denies all arguments against his earlier stance that the PPT is "not" interfering in the market as far as: "using government funds to buy stocks, or other instruments such as stock index futures" by concluding with this sentence: "Given the massive electronic and human audit trail generated by trading on the futures and stock markets, experts say that, if the so-called PPP interventionist theories were true, it would be impossible to conceal documentary evidence of such transactions."

He agrees however that moral suasion is being exercised. Such suasion may for instance lead to a few major banks influencing the stock market, positively or negatively, on the Fed's behalf, with futures' (and other instruments-) transactions that are financed by the fed through 7 up to 30 day Repos. The only way this can be proven is by reinstituting the publication of M3 and publishing all information necessary to squelch all manipulation of the stock market. Hence Sposer's required trail is in no way producible, when such vital information is withheld.

Again, the sheer fact that User Sposer is a stock exchange employee and his above arguments that user Hogeweg is adding irrelevant information, seems tantamount to being subjective, in the worst case, his argument's stance may be more than subjective.

If the article expressly states that the present wording is the non-plus-ultra, as it clearly does, than that conclusion is Sposer's private, but possibly wrong conclusion. Other's may be of a different opinion and even be "middle-of-the-road". The sheer fact that "conspiracy" is nihilated in this article is as wrong as the opposite, as it is likewise not possible to PROOF that it is NOT correct. Hence user Hogeweg's suggestion, as one from the "middle", to open all secretive books of the Stock Exchanges AND Governments and stop this paternalism! The "Flash" market is clear proof of such forbidden actions allowed by the Exchanges. Hogeweg (talk) 05:34, 7 September 2009 (UTC)

Hog - As I say on my user page, whatever I write here has nothing to do with the stock exchange. The main argument I have always had is with the discussion of purchase of futures during 1987. The repo story is well known and is in many books, including "House of Cards". The Fed flooded the markets with liquidity in 1987, 1997, 1998, 2000-2002, and again in 2007-2008. They even went so far, after the Bear collapse, to allow investment banks to borrow at the discount window. These are all known facts, so I guess I missed your point, given that it isn't a conspiracy when it was all done out in the open. What I have always argued against is the idea that the Fed or the Treasury buy and sell stocks or futures in the open market. They certainly legally influence the Treasury market and the currency markets all the time. I worked on a government bond desk and an FX desk for many years.

By the way, outside of typos, I stay away from stock exchange topics, so I certainly would not be editing on any so-called secrets. All I've ever said (or thought I was saying) is that there is no evidence of purchase -- through the open market (or at least that is what I thought I was saying) -- of stocks or S&P 500 futures, by the Fed or the Treasury. I understand your point regarding M3, etc., but you were essentially putting in a call for the govt to do something. If you like, repost your changes with the sources again, and I will see if I can reword it, because some of the issue is that it needed some style points too. If I can work out a way of making it non-conspiracy accusatory, and if the sources appear to be RS, I will keep it. If they aren't I will try and find some that are.

Maybe I am misunderstanding here, since all of the repo stuff and collateral and fixed income toxic asset stuff is known and public. The way the govt came to control AIG too is known and public. And again, my main issue is and always have been that this is an article about the Working Group, not the conspiracy theories circling about it. Feel free to point out one or two of the theories and then provide a link to a new article on such theories. I promise never to edit that article.

As far as the flash order, I do not get involved with exchange business here as that is COI. But, you should know that the NYSE, NYSE Arca and NYSE Amex do not have flash orders, and have publicly stated that it is against them.Sposer (talk) 20:18, 7 September 2009 (UTC)

A final addition for the seasoned reader, to be able to make an objective decision on this issue, meanwhile the FED is using (reverse)REPOs to get a handle on the (Stock) Markets:

THE EVIDENCE:

http://www.cnbc.com/id/32998063

QUOTE Fed Mulls Exit via Money Market Funds: Report Published: Thursday, 24 Sep 2009 | 5:05 AM ET Text Size By: Reuters The U.S. Federal Reserve is studying the idea of borrowing from money market mutual funds as part of eventual steps to withdraw stimulus, the Financial Times reported on Thursday. The Fed would borrow from the funds via reverse repurchase agreements involving some of the huge portfolio of mortgage-backed securities and U.S. Treasuries that it acquired as it fought the financial crisis, the newspaper reported, without citing any sources. This would drain liquidity from the financial system, helping to avoid a burst of inflation as the economy recovered. The FT said Fed officials had in recent days held discussions with market participants on how it might implement such a scheme. The Fed is considering whether to conduct a pilot scheme, but worries such a test might be seen as a signal that the central bank was about to drain liquidity on a large scale, the newspaper said. In the near term, a big drain remains unlikely, it added. The central bank held interest rates at close to zero on Wednesday and upgraded its assessment of the U.S. economy, saying growth had returned after a deep recession.

The Fed also said it would slow its purchases of mortgage debt to extend that program's life until the end of March, in a move toward withdrawing the central bank's extraordinary support for the economy and markets during the contraction. The idea of the Fed using reverse repos to help unwind policy is not new; Fed chairman Ben Bernanke identified them as a potential means of soaking up liquidity in July. But the market had previously expected the repos to be done with primary dealers, including former Wall Street investment banks.''' The central bank is now considering dealing with money market funds because it does not think the primary dealers have the balance sheet capacity to provide more than about $100 billion, the Financial Times said. Money market mutual funds have about $2.5 trillion under management so they could plausibly provide between $400 billion and $500 billion, it said. The newspaper added that the Fed did not think it would need to drain liquidity all the way to where it was before the crisis, because it was confident it could raise interest rates even with a much larger amount of reserves in the system than existed before the crisis. Unquote And that's why the markets are up! Hogeweg (talk) 09:53, 24 September 2009 (UTC)

Bear in mind that the Reverse Repo is the opposite of a Repo, latter used sofar by the Fed in adding liquidity to the coffers of primary dealers, including former Wall Street investment banks... The German language Wikipedia : http://de.wikipedia.org/wiki/R%C3%BCckkaufvereinbarung unlike the English version gives a good description of (Reverse-)Repos. Hogeweg (talk) 11:33, 28 September 2009 (UTC)

url for reference no. 9 is wrong

URL for reference number 9 is wrong, alas I do not know how to fix this. (When I click on edit I get "reflist" or something like that and I have no idea how to change the list.)

The correct url is:

http://www.sprott.com/Docs/SpecialReports/08_2005_TheVisibleHand.pdf

So maybe somebody with better editing skills than I have could fix it.

Gatorinvancouver (talk) 17:51, 4 September 2009 (UTC)

Fixed, and fyi, the ref tag where you found ^[9] contains the URL. -- 203.171.192.188 (talk) 17:57, 4 September 2009 (UTC)