The following is from Bill Murphy regarding a very interesting article that appeared in The Street.Com on 19th October 2000. The hand of the Plunge Protection Team (PPT) is clearly visible for the first time. The entire short gold play over the last few years is a technique that has been used to "prop up key stocks" and "fund futures operations." In its simplest form it works like this. Borrow (at negligible interest rates) someone's gold and sell it in the market. This gives one a handsome pool of near-interest-free dollar cash. Whenever the stock market looks shaky, or key stocks come under pressure, dive in and buy, buy, buy. This activity naturally robs the free market of its free market status, since it is a manipulation. But it is not only necessary to manipulate the stock market to succeed. It is also necessary to manipulate the gold price and keep the price of gold below the price the PPT sold it leased gold for. This is a game of double jeopardy. The problem the PPT now have is that there is virtually no more official gold left to borrow. Almost every ounce has been accounted for and already borrowed, sold and the proceeds put into play. Even some future production - still in the ground - has apparently been used in forward sales and futures operations. With such massive pressure mounting on the stock market, and with gold exhausted as a manipulators tool, it is little wonder that the oil price - denominated in dollars - would suddenly re-appear on the world stage in a re-run of the 1973 Yom Kippur oil price hike. Cash - liquidity in market jargon - has to be available to plug the stock market sink The word "perilous" comes to mind. Regards David > Le Metropole Members, > > Bill Meehan of Cantor & Fitzgerald wrote the following > for www.TheStreet.com. I bring your attention to the > following quote from this story: > > "It's certainly possible that some are using the tail > to wag the dog, and even the most bullish folks > questioned whether selling borrowed gold at very > low rates to fund futures operations and prop up > key stocks like Chase and Intel is a definite > possibility." > > This exact type of operation was brought to your > attention in the last Midas. > > I too noticed Intel surging from down on the day to > higher in pre-stock market trading on the stock > turn around on Wednesday. It came right after > stock analyst new downgrades and was very noticeable. > > Word of the gold scandal is spreading and beginning > to surface anecdotally in mainstream commentary > such as this. > > GATA has been stifled by the US press. That will not > be the case much longer. Soon, mainstreamers like > Bill Meehan will learn more of the facts about the > gold collusion and what dealers are apart of the > gold cartel. They will easily be able to put two and two > together. The manipulation of the gold market and the > extent of the gold scandal will become obvious to all. > > The ticking gold time bomb clock ticks louder > and LOUDER. > > Commentary : The Meehan Notes > > The Line in the Sand > By Bill Meehan > Special to TheStreet.com > Originally posted at 10:07 AM ET 10/19/00 > on RealMoney.com > > Dealers were out in full force Wednesday morning > after IBM's (IBM:NYSE - news) big blues spread > like a cancer; and it didn't help things at all > when Chase's (CMB:NYSE - news) quarter went over > like a lead zeppelin. > > Having already been pounded into the dirt, analysts > finally got around to making some downgrades, > which might have been the best reason of all for > traders to cover shorts and put on their buying > shoes. Of course, the usual suspects were again > steadfastly calling the morning's extraordinary > reversal a bottom, and fearless plungers were > confident that a 20-minute plunge was more than > enough to warrant a great wave of enthusiasm -- > what else do they know? What else would they do? > > The kind folk who ply their trade on the Street > of Dreams greased the skids by some very aggressive > buying in the futures pits right into the teeth > of a very ugly open. The media tended to harp on > the Consumer Price Index, which like the Producer > Price Index was a tick higher than expected. News > that inflation (according to the Bureau of Labor > Statistics) is growing at an annual rate of 3.8% > didn't seem very important in the scheme of things, > although it makes it very unlikely that the Fed > is on the verge of lowering rates -- the latest > straw that perma-bulls have desperately grasped > for. Well, they've still got the "undervalued" > story to work, although most stubbornly view some > of the most egregiously valued specimens as the > way to play the game. > > And what about another of the savviest technology > company's mistaken release of a positive earnings > report? I'll have to check in with the black > helicopter gang to get a fix on things. Nonetheless, > Sun Microsystems' (SUNW:Nasdaq - news) positive > surprise and Nokia's (NOK:NYSE - news) announcement > that it would report a week ahead of schedule > also helped to keep momentum alive. > > Curiously, it was the "old new" tech stocks, led > by Intel (INTC:Nasdaq - news), that led the way > with the "new new" darlings sliding. The fickle > finger of fate is working overtime at the circus > maximus at Wall and Broad. And, unlike Wednesday's > flurry of postclose disappointments, the news after > the gavel fell has been a bit more uplifting. > > Microsoft (MSFT:Nasdaq - news) was the big deal > after the close. No sweat on the revenue side, > and everybody felt warm and fuzzy after the software > giant beat earnings expectations by a nickel. Yes, > bulls and bears both liked the numbers. That the > company is growing revenue at a single-digit rate, > and that operating earnings were lower than last > year's September quarter, was a comfort to the bears, > even as the stock moved higher. And I presume the > bulls were just happy in the absence of a revenue disappointment. Folks also went home with a grin > after AOL's (AOL:Nasdaq - news) strong quarter > was reported. > > Refreshingly, there was no blowing smoke about > Apple's (AAPL:Nasdaq - news) disappointment. They > missed, acknowledged it and straightforwardly laid > out plans to clear out the unsold merchandise > ASAP, duly noting its impact on the current > quarter. Honesty -- what a concept! > > Why the aggressive buying in the morning that > appeared to keep the Nasdaq Composite Index > from decisively breaking through the May low? Yes, > I know that I've made the case that everybody's > a technician these days, but was that the primary > reason? It's certainly possible that some are > using the tail to wag the dog, and even the most > bullish folks questioned whether selling borrowed > gold at very low rates to fund futures operations > and prop up key stocks like Chase and Intel is > a definite possibility. > > Holding some Nasdaq 100 Unit Trust (QQQ:Amex - news) > puts that I expected to unload in the morning, I > was keenly aware of the chasm between the action > in the QQQs and the Nasdaq 100 in the early going. > At the lows, the Nasdaq 100 was down 6%, while the > QQQs were only lower by 4.7%. Curious, indeed. > > A sharp reversal was likely, as the recent lows > would be heavily defended with the put/call numbers > so extreme, but I must admit to have been taken > aback by the Nasdaq's ability to close the gap in > less than 90 minutes. Short, sharp rallies are > commonplace in a bear market, and there's little > doubt that tech stocks are in a bear market. Is > it really good news that the futures are flying > this morning? > > We'll see what no fewer than six Fed officials > have to say today, with Mr. Greenspan expected to > give his first take on the economy since July. We'll > also see if the market can string at least a couple > of positive days together before coming to the > conclusion that perhaps there's a tradable rally; > especially considering that fundamentals are > deteriorating. > > As the lows were well-defended Wednesday, perhaps > with a little help from the market's friends, keep > an eye on the area just above the 3300 level, which > is where the Nasdaq met resistance last Thursday, > Friday and Tuesday. Aggressive traders should fade > the open using a relatively tight stop and be > quick to take profits. > > Perhaps the best idea is to take a few steps away > from the market to get a fresh impression of the > lunacy. Which is exactly what I'm going to do. > Shifting my attention to a more rational form of > gambling, I'm making my annual pilgrimage to Kentucky > to enjoy a few days of the Sport of Kings. Will be > back on board on Wednesday. Good luck, and take > care. > > ----------------------------------------------------- > > Bill Meehan is the chief market analyst for Cantor > Fitzgerald, a Manhattan-based institutional trading > and research firm, and writes daily for the Cantor > Morning News. Prior to that, he was a market > analyst for Prudential Securities. At time of > publication, Meehan had no positions in any stocks > mentioned in this column, although holdings can > change at any time. He appreciates your feedback > at [EMAIL PROTECTED] > > > > <A HREF="http://www.LeMetropoleCafe.com/entrance.cfm">Le Metropole Cafe</A> > > All the best, > > Bill Murphy > Le Patron > www.LeMetropoleCafe.com > >
