With a hat-tip to the Shark the-shark-report here is an explanation of the PPT from alternet.org. I had not heard of this committee before today. Gives me shivers.
“It was back in l987 when the former movie-star-in-chief (Reagan) signed an Executive Order his administration drafted for him. The “Working Group” it set up was quickly labeled the PLUNGE PROTECTION TEAM (PPT).
As the government in effect takes over mortgage giants and wrestles over what to do about the collapse of huge investment banks like Lehman Brothers, with more to come, you know they are on alert 24/7 scrambling to put more fingers in the dyke. (Over the past weekend, the Fed and Treasury Secretary warned the banks to clean up Lehman’s mess or they could be next. As of Sunday, there was no deal and one of American’s oldest investment banks faces liquidation.)
There is a mechanism in place to avoid this type of crisis. In theory! Here are their overt marching orders; the covert mission is still shadowy.
Executive Order 12631 — Working Group on Financial Markets
Section 1. Establishment. (a) There is hereby established a Working Group on Financial Markets (Working Group). The Working Group shall be composed of:
(1) the Secretary of the Treasury, or his designee;
(2) the Chairman of the Board of Governors of the Federal Reserve System, or his designee;
(3) the Chairman of the Securities and Exchange Commission, or his designee; and
(4) the Chairman of the Commodity Futures Trading Commission, or her designee.
(b) The Secretary of the Treasury, or his designee, shall be the Chairman of the Working Group.Sec. 2. Purposes and Functions. (a) Recognizing the goals of enhancing the integrity, efficiency, orderliness, and competitiveness of our Nation’s financial markets and maintaining investor confidence, the Working Group shall identify and consider:
(1) the major issues raised by the numerous studies on the events in the financial markets surrounding October 19, 1987, and any of those recommendations that have the potential to achieve the goals noted above; and
(2) the actions, including governmental actions under existing laws and regulations (such as policy coordination and contingency planning), that are appropriate to carry out these recommendations.
(b) The Working Group shall consult, as appropriate, with representatives of the various exchanges, clearinghouses, self-regulatory bodies, and with major market participants to determine private sector solutions wherever possible.
(c) The Working Group shall report to the President initially within 60 days (and periodically thereafter) on its progress and, if appropriate, its views on any recommended legislative changes.
In actual fact, this secret branch of government has a sophisticated war room using every state of the art technology to monitor markets worldwide. It has emergency powers. It doesn’t keep minutes. There is no freedom of information access to its deliberations. There are 147,000 entries in Google on this powerful body but I could only access 10.
The reports on it are sketchy including one from the Washington Post:
“These quiet meetings of the Working Group are the financial world’s equivalent of the war room. The officials gather regularly to discuss options and review crisis scenarios because they know that the government’s reaction to a crumbling stock market would have a critical impact on investor confidence around the world.” Remember this is an administration that claims to worship an unregulated free market and yet here they are big-footing that market.”
