I was “informed” of the Governments Plunge Patrol Team ( the PPT) back in February of 1994. At the time, I found it to be the answer to a lot of questions I had that just could NOT be answered in logical fashion. But for those unfamiliar, the proper name is the President’s Working Group on Financial Markets. What’ s that you ask? Well, way back in 1988, President Reagan signed this group into law, right after the infamous October 87 “black Monday” when the market’s crashed and panic was on the verge. Okay, so what’s it’s purpose?

Executive order number # 12631 was declared as a way to give recommendations for legislative and private sector solutions for “enhancing the integrity, efficiency, orderliness, and competitiveness of [United States] financial markets and maintaining investor confidence”  Okay, and who is it that makes up this little cadre of voodoo practice? Let’s look:

Section 1. Establishment. (a) There is hereby established a Working Group on Financial Markets (Working Group). The Working Group shall be composed of:
(1) the Secretary of the Treasury, or his designee;
(2) the Chairman of the Board of Governors of the Federal Reserve System, or his designee;
(3) the Chairman of the Securities and Exchange Commission, or his designee; and
(4) the Chairman of the Commodity Futures Trading Commission, or her designee.
(b) The Secretary of the Treasury, or his designee, shall be the Chairman of the Working Group.

All right, so we see that after “Black Monday” when the market crashed, Reagan and the heads of finance got together and put together a little group, that was supposedly charged with keeping things orderly, and preventing the lead up to something like the 87 crash. But, for many many years, things would happen in the market’s that simply defied logic. Defied common sense. Defied even the most thorough examinations. That is, until you inject the idea that the Presidents working group is actually active in the market. This is what I found to be the only true explanations for the  dozens of times that the market reacted absolutely beyond reason. Yet I was brandished as a cook, a nut, a conspiracy whacko.

See, supposedly the law says that this group can only give recommendations, and except in dire emergencies, keep their hands out of things. Yet those ideas were blown to hell when In 1989, when former Board Member of the U.S. Federal Reserve Robert Heller stated: “instead of flooding the entire economy with liquidity, and thereby increasing the danger of inflation, the Fed could support the stock market directly by buying market averages in the futures market, thus stabilizing the market as a whole.” On January 14, 1997, former U.S. Federal Reserve chairman Alan Greenspan, during a speech delivered in Leuven, Belgium, stated the following: “We have the responsibility to prevent major financial market disruptions through development and enforcement of prudent regulatory standards and, if necessary in rare circumstance, through direct intervention in market events.”

It has been my position that the Presidents Working Group is VERY active in the day to day  manipulations of many markets, from stocks, to metals. How many times have we seen the market about to roll over and “boom” “someone” buys up a few hundred thousand S&P futures, and starts a rally?? Many. How many times has the news been so horrid we were losing points quickly and then all of a sudden, the ENTIRE market reverses in an instand and we rocket back up to positive?? Too many. Am I to believe that somehow a zillion investors from hedge funds, to mutual fundies to individuals, all got the collective notion to buy the market at the very same instant???? Please, don’t embarrass yourself. But maybe more to the point, remember when Bernanke said way back in March that “consumer confidence will rise with the gradual rise of the equity market?? How did he know the equity market would rise?? Simple. He was going to “make sure” it did via direct intervention in the market ( to quote Alan Bubbles Greenspan)

Think along these lines for a second. Who is on this group? The Treasury Secretary. Turbo tax Timmy Geithner, a man who “goofed” up his own taxes, and was just in the news on Thursday because he instructed AIG to remove documentation from Emails showing how much Uncle Sam was going to be paying for toxic assets. He did this simply so Goldman Sachs could get “par” or full price for all this junk. Oh did I mention he was a former Goldman guy? Sorry, slipped my mind. Okay so this group has such upstanding citizens as Geithner at it’s head. Then we have the head of the SEC. Ya, those guys. You know, the one’s that couldn’t figure out Bernie Madoff, were nowhere to be found when banks sold zillions in toxic crap to the world, and yet chases newsletter writers. Those guys. Oh wait, then we have the head of the commodities exchanges. A place where to this day just 4 major institutional banks can be short more silver than is produced in the whole world, despite it being illegal.

Yep, that’s a fine upstanding group there eh? No doubt. So, what brings me to this little discussion today? Well, it seems that recently a lot of people have been thinking about the PPT, because it’s been making news lately. Stick with me here:

The unusual circumstances that led the U.S. market to rally powerfully in 2009 might be explained by secret government moves to buy stocks, according to Charles Biderman, the founder and chief executive of TrimTabs, a research firm that tracks liquidity flows in the market.

“We cannot identify the source of the new money that pushed stock prices up so far so fast,” Biderman said in a statement Tuesday. The source of approximately $600 billion net new cash necessary to lift the market’s overall capitalization by $6 trillion last year could not be identified by TrimTabs, Biderman said. The money, he said, didn’t come from traditional players such as companies, retail investors, foreign investors, hedge funds or pension funds.

“We know that the U.S. government has spent hundreds of billions of dollars to support the auto industry, the housing market, and the banks and brokers. Why not support the stock market as well?” The Federal Reserve or the Treasury, Biderman said, could have easily manipulated the stock market by purchasing $60 to $70 billion worth of futures of the S&P 500 on a monthly basis.

There were net outflows from U.S. stock funds since March of last year as investors plowed hundreds of billions of dollars into bond funds. This is one of the many troubling aspects of the recent stellar performance of equity markets that becomes all the more puzzling after former Fed chief Alan Greenspan recently cited the rise in stock market capitalization as one of the major factors in the nascent economic “recovery”.

Well now isn’t that interesting? Here’s an outfit that’s charged with doing all the fundamental leg work of monitoring inflows, outflows, etc etc and they simply cannot get the numbers to add up. Bravo Trim Tabs, see I had the same problem many times over the past 12 years. There simply was no way the market could do what it was doing without being “manipulated”.  How many times in this very publication have you seen me say “the market doesn’t belong where it’s at and if it wasn’t for “them” buying futures, we’d have rolled over many times”. ?? How many? Too many. Who was them? The President’s working group, along with their crony bankers.

Here’s what Bloomberg had to say about Tim Geithner just Thursday:
Fed told AIG to hide swap payoff. The New York Fed, led at the time by Tim Geithner, told AIG (AIG) to hide details about its payments to banks, e-mails show. In a draft of a regulatory filing, AIG disclosed it paid banks, including Goldman Sachs (GS) and Societe Generale (SCGLY.PK), 100 cents on the dollar for credit-default swaps they bought from the firm. But the New York Fed crossed out the reference, and AIG ultimately excluded the detail from its Dec. 24, 2008 filing. The New York Fed took over AIG’s negotiations with banks in November 2008, and controversially decided to fully repay banks for $62.1B in swaps written by AIG, prompting lawmakers to call the AIG rescue a ‘backdoor bank bailout.’

Isn’t this criminal? Should the head of the Treasury be hiding the numbers from the American public like that since it’s us that has to pay for this crap? Isn’t it raising eyebrows from the SEC, about getting Goldman paid back in full, via the public’s dollar? Yet these are the guys on the Presidents workin group.

Look folks I can’t say this any clearer. 99% of everything you are told out of Wall street and our Government is lies. More colloquially known as bullshit. From the numbers they force feed us on economic reports, to the garbage they sell us about global warming, to the laws, regulations, and socialist agendas they preach. Speaking of Global warming, how’s that crusade going? While they preach that we’re all going to burn to death and drown in rising sea levels, this was the headlines on Wednesday:

Winter Could Be Worst in 25 Years for USA…
Britain braced for heaviest snowfall in 50-years…
GAS SUPPLIES RUNNING OUT IN UK…
Elderly burn books for warmth?
Vermont sets ‘all-time record for one snowstorm’…
Iowa temps ‘a solid 30 degrees below normal’…
Seoul buried in heaviest snowfall in 70 years…
3 die in fire at Detroit home; power was cut…
Midwest Sees Near-Record Lows, Snow By The Foot…
Miami shivers from coldest weather in decade; Florida Gov Signs Emergency Order ..

I have to think that by now even people who were caught up in the scam, because they had been so brain washed via distorted science, have awoken to the fact that Global warming was just part of the new big “green movement” so they could tax us more, control us more, and enrich the carbon traders, and huge corporations that would be building this green crap we’d be required to buy.  Hey don’t get me wrong, I’m all for cleaning up pollution. Unfortunately, Co2 isn’t pollution, we need more of it, not less.

I guess the theme of this letter is simply to show you all that what might sound like conspiracy nut stuff today, is in the headlines 5 years from now as fact. Don’t be afraid to think outside the box.

Let’s look at Friday’s Jobs Report. While estimates were all over the map, most figured the number would come out sort of “flat”. Well they acknowledged that some 85K jobs were lost in December. Really, just 85K? Not only that, they revised Novembers number from – 11K to +4K. Now, to the millions that listen to their local radio, or some financial station on TV, you’d think things are going along swimmingly, no? Sure you would, that’s what it’s designed to do, brain wash you. But let’s suppose we “drill down a bit” and see what’s really going on.

There’s two major employment reports, the Governments non farm payroll, and the “household” survey. What Uncle Sam does is go to “big business” and ask what they did last month. Big business, making gobs of money from offshoring, currency gains, and stimulus, says “we didn’t cut much, but we didn’t add much”. Okay, now how about the Household survey, where they literally call homes and ask about the employment picture at the homefront? Well that came in with a loss of 589,000 jobs for December. Did you catch that? People sitting at home, signing up for first time unemployment, etc, say they lost almost 600K jobs.

But wait, it gets better. Included in Uncle Sams number is the “Birth/Death” addition. In it’s basic form the Birth/death model says that when people get laid off, “X” amount of them open businesses and hire people. Although there’s no proof of these jobs, although there’s no taxes paid from these jobs, they declare them as fact. So, how many jobs did the BLS say were added in December by laid off people hiring and creating jobs? 59,000. So, Uncle’s  number of 85K jobs lost, INCLUDES 59K jobs that really don’t exist. Take them out and even Uncle’s number is – 144K jobs.  Then finally, it seems some incredible 600K people “fell off” the unemployed rolls, which is why the unemployment rate stayed at 10%. Huh? You ask? Well if people say they’ve “given up” on looking for a job, they are no longer considered unemployed. Like magic eh? Well 600K said that they “gave up” and that’s why the rate didn’t tick up to 10.4%.

So, how can the two reports be so completely lopsided? Easy. First off, big business has already cut to the bone, and are working skeleton crews. Second, they can’t poll companies that have closed!  Now, at the home front side of things, where thousands own small businesses,  they’re getting crushed. Small retailers, service companies, construction guys, etc are dropping like flies each month.  So, which one more reflects “America?”  You know the answer. Yet which number is going to get the most airplay?? Uncle Sam’s, especially the November adjustment to positive.

Then, just to show you how completely corrupt this whole thing is, I’m watching CNBC and one of their esteemed “panel” a Mr. Barberra says that we’re going to see the Government report go positive and post big numbers in 2010. He says the economy is soaring. Yet when asked about the Household survey and what all that meant, his response was “we’ve used Government numbers for the 25 years of my career, we’re not going to start looking at something else at this point”.  Oh, in other words, Forget the truth of the Household survey, forget about the ramifications of almost 600K more people not having jobs, just click your heels and listen to big brother and all will be well. I wanna puke.

I’ll leave you with one last example of the absolute “misdirection” that  the market throws at us. We heard earnings from Lenar (LEN). All I heard on CNBC was that they were BTE (better than expected) and the stock was indicated “up”. So, what exactly did LEN say? Let’s look:

Lennar said it earned $35.6 million, or 19 cents per share, in the quarter ended Nov. 30. It had a loss of $811 million, or $5.12 a share, a year earlier.

 But, the tax gain reported in the fourth quarter came from a change in federal accounting rules that allowed the company to reverse previous writedowns of deferred tax assets. Without the tax benefit, Lennar would have lost $284.9 million, or $1.15 a share. The tax benefit was offset by charges totaling 89 cents a share related to adjustments in the value of land and other write-offs.
Revenue fell 29 percent to $913.7 million, because of a 22 percent drop in the number of completed home sales. The average sales price of a home dropped 9 percent annually to $238,000

Now, let me ask you, did TV tell us about the tax “bonus” and that without it, they were sucking wind? Of course not, on financial TV everything is better than expected and wonderful. That my friends is the sewer we delve into each day. Do yourself a favor. Even if you think my rants are over the top, at least consider what we’re trying to do here. If you follow the main stream, you’re going to get roasted as you make financial decisions based on faulty information. If you take the time to analyze what we present to you, chances are good you’ll come to the realization that you really do have to prepare for what could be some long term “tough times”.  Okay? Good.

Now onto the market.

Here’s the thinking. We came a long long way in the market, with some indicies up 65%. We’re entering a new year, wherein if some with huge gains from 09 wanted “out” all they’d need was a reason. Well Friday morning comes and they get the biggest reason of the season. The jobs report was horrid, and “deep down” everyone know’s it’s completely BS. Yet the market didn’t crash, didn’t even dip. After watching where it was going to go all day, they all piled in during the last 30 minutes of the session and ended the day GREEN. Green on a day where job losses mounted, the unemployment level rose, and frankly there were no “green shoots” in the number.

The thinking was purely this: if the numbers stink, then Bernanke and the FED cannot raise rates, the stimulus money will continue, low rates will continue and the party can continue. The exact “spin” we suggested they’re would be on a poor number.

Now we face earnings season. You’re going to see creative accounting reach new levels of absurdity. (look at LEN’s report above). All of it will be designed to make things sound rosy. Look at UPS on Friday. They actually “upped” their guidance. What you didn’t hear a lot about was they are cutting another 1,800 jobs. Something always sounds fishy to me when a company says things are looking up, and instead of hiring to meet the demand, they shed jobs.

In any event, it “appears” like we are going to see the market move higher. It might be a herky-jerky  situation, filled with more volatility than you want, but again, they had their reason to sell on Friday and they didn’t. It’s our guess they move us higher.

We’ve had some tremendous winners coming into this new year. For instance, we bought some CLR a couple weeks ago at 40.56. On  Jan 4th it hit 46 and change. That’s 14% in ten trading sessions. Or how about UYM? We took that on January 4th at 33.50. It’s at 37.00 as we speak, for a 10% gain in four trading sessions. All of our other holds are up nicely as well. The question of course is, can it continue? We think it can to a point, as they pour on the heat. Do NOT forget that this year we have Congressional elections coming and those politicians have ONE goal in mind, to remain a politician. So they’re going to do any and everything they can to make it look as if the economy is good, which means more stimulus, more low rates and more “fraud”.

Lean long and keep a finger near the sell button. That’s been our Motto since March, and we keep singing it. We’ll see you all on Wednesday.

PS..  If you’d like to see the exact stocks/options/metals and 401K moves we will be looking at for this week, please consider becoming a member of the “insiders club” located here: Click Here