May 7th, 2010 by Dissolving Dollars

In light of the DOW’s 1000 point intraday plunge on May 6, 2010,  here is a little clip of Max Keiser explaining the Plunge Protection Team (The Working Group on Financial Markets formed out of the October 1987 stock market crash). The May 6, 2010 crash looked like the Plunge Protection Team pressed sell and sell again instead of buy and then a few minutes later noticed their mistake. Procter & Gamble and 3M fell below what is called the Liquidity Replenishment Point and triggered a kind of market circuit breaker. Interestingly, Procter & Gamble and 3M are two stocks that the Plunge Protection Team purportedly targets to buy to prop up the market since they are heavily weighted on the indexes. Anyway, the whole thing was very bizarre. The rapid recovery was just as bizarre as the plunge itself. It all just goes to show how prone the market is to manipulation, both on the up side and down side.