The Plunge Protection Team — aka The President’s Working Group on Financial Markets — has long been a mysterious organization chaired by the Treasury Department, but no more, opined New York Post writer John Crudele.
In fact, he stated in a recent article, the Plunge Protection Team and the Federal Reserve saw the current turmoil in the financial markets coming.
In his article, "Plunge Protectors Are All Over Market Meltdown,” Crudele wrote, "While the press now seems to understand the PWG’s importance, nobody is asking the big question — what is the group willing and able to do in a crisis? Now that is suits the group’s interest, the PWG wants everyone to know it’s on the job.”
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Crudele quoted from an article in Monday’s Wall Street Journal that stated: "The market turmoil prompted the President’s Working Group on Financial Markets … to trigger protocols established by Mr. Paulson shortly after he took office last year,” referring to Treasury Secretary Hank Paulson..
"They include a detailed list of who is going to call financial institutions, risk managers, traders and chief executives to keep tabs, how often they should call and the like.”
The Journal article continued to say, wrote Crudele, that Paulson instructed a Treasury Department official to craft six "meltdown” scenarios.
Why is the Treasury suddenly being so generous with information, asked Crudele.
It’s because, he quoted the Journal, "the government wants people to think that it is on the ball, holding conference calls "at least once a day in recent days.”
But what exactly is the PWG authorized to do if there’s a stock market meltdown?
"As I’ve been hypothesizing in this column for a long time, the protocol for a stock market collapse has to be action — with the government, or more likely proxies on Wall Street, courageously (though without risk) stepping in front of a falling equities market,” wrote Crudele.
He continued to state that, "In other words, a rigging operation like the one outlined years ago by Federal Reserve governor Robert Heller; described during the 2001 crisis by former Clinton aide George Stephanopoulos and documented by me. The government had good reason to go over these protocols because it saw market instability coming.”
According to Crudele, Paulson "deliberately” mentioned on a recent CNBC program that the President’s Working Group was "vigilant for the next market crisis.”
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