Here’s Your ‘Plunge Protection Team’ (No Conspiracy Theories Necessary)

Here’s Your ‘Plunge Protection Team’ (No Conspiracy Theories Necessary)

There's a difference between questioning the sustainability or relative desirability of a given strategy and persisting in the fantasy that an inherently absurd dynamic cannot remain viable long enough to bankrupt those who bet on its failure. Of course that distinction doesn't matter for people whose financial well being depends not on markets but rather on churning out click bait 50+ times a day. For those folks, being perpetually wrong about markets doesn't matter because after all, being
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3 thoughts on “Here’s Your ‘Plunge Protection Team’ (No Conspiracy Theories Necessary)

  1. Works well until it doesn’t. Central bank QT is going to become such a liquidity suck for the markets that it will overwhelm the support from buybacks. It’s going to take a few more months though, so in the meantime: party on!

  2. One interesting comparison might be how much “bang for the buck” these repurchases are getting at these elevated share prices. I would guess 800bn at prices today doesn’t go as far as 600bn in 2015. One could argue that this is waaaay less support and not as strong a corporate bid as it appears.

  3. one thing to remember is that the Swiss Central Bank owns close to $100 Billion in US Stocks and bought $20 billion last year…

    https://www.forbes.com/sites/bryanrich/2017/05/16/this-central-bank-owns-80-billion-worth-of-u-s-stocks/#788a278f7b13

    Japan also owns a ton of us stocks through Kuroda’s machinations… They like to buy high and never sell I guess.

    I’m still long 50% but hedged. We were long 95% untill 2015. BRK.A is a 15% position. Cost basis on some of our shares = less than $1,000

    Not bragging. Just want to show that not all “bears” are equal. Nor all skeptics of CB activity. The ivory tower and whatnot…

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