Black Helicopter Theories Whir Through Markets (silly plunge protect team) [View All]

http://quote.bloomberg.com/apps/news?pid=10000039&cid=baum&sid=ao9ZrDl_sQPs

Black Helicopter Theories Whir Through Markets: Caroline Baum

June 15 (Bloomberg) -- It must say something about fear and greed that normally sane people take leave of their senses to construct financial market conspiracy theories.

Some of these theories, embarrassing as it would seem, find their way into print. A recent conspiracy theory (CT) making the rounds concerns the surge in money supply growth and -- watch the web being spun -- the implication that ``the Fed must know something.''

According to this line of thinking, the Federal Reserve is flooding the banking system with reserves in the same way that it did following the Sept. 11, 2001, terrorist attacks -- except this time it's anticipating the event.

Two weeks ago, Safehaven.com posted an alarming analysis on its Web site, warning of the ``unprecedented, unheard-of pre- catastrophe M3 expansion'' (unprecedented for a four-week period unless you count similar spurts in July 2003 and November 2002). <snip>


Alas, this is the same pesky logic advocates of the ``Plunge Protection Team'' ignore when they assert that the Fed, Treasury and a cabal of large investment banks step in to buy S&P futures contracts whenever the stock market is going into one of its swan dives. <snip>

cabaum@bloomberg.net.

the editor bahearn@bloomberg.net.