"There is no trap so deadly as the trap you set for yourself.”
Raymond Chandler, The Long Goodbye
Stocks were a bit on the wobbly side today, although the SP futures managed to close on the green.
The SP futures, or rather the manipulation of them, was a Robert Rubin innovation. He noted that you can let a financial crisis happen, and go in afterwards and spend a great deal of money fixing the collateral damage in the markets.
Or you can intervene with leverage in the SP futures, specifically, in order to get ahead of the declines, and make the clean up job just that much easier. Neater, cleaner, and best of all, cheaper.
And in the aftermath of the Mexican debt crisis, under Rubin's practical guidance and Greenspan's acquiescence, the Exchange Stabilisation Fund grew into a formidable presence, the abiding 'invisible hand' in the markets, also known colloquially as the 'Plunge Protection Team.' It has one of the few federal budgets that never really gets audited, outside of the military. And that is fitting, because these days paper money is an instrument of war.
But once you start that music playing, the trick is not how to keep it going, because a lie is almost inexhaustible as long as everyone still believes it. No, the trick is how to ever stop.
Have a pleasant evening.