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The Plunge Protection Team at work

For many years, gold enthusiasts have known about the shenanigans of the Plunge Protection Team (PPT) in the gold market. Now, Eric Englund, in an article on, discusses the PPT’s handiwork in the stock market, via a manipulation of the Dow Jones Industrial Average through purchases of General Motors stock.

A few interesting notes from Englund’s article:

Analyzing General Motors 12/31/06 FYE financial statement, you will learn that

GM’s has stated net worth is negative $5.4 billion;
By fully discounting intangible assets, which includes deferred tax assets, GM’s net worth is arguably negative $48.5 billion; GM’s has stated working capital is negative $3.7 billion; By fully discounting current deferred tax assets, GM’s working capital drops to negative $14 billion;
General Motors’ total liabilities amount to a staggering $190.4 billion
GM’s net loss, in 2006, was nearly $2 billion.

Not exactly the place you would want to put widows’ and orphans’ monies. Yet this past quarter was a barnburner for GM’s stock.

For the quarter, the Dow Jones Industrial Average was up by 8.5% while GM was up by nearly 23%. During the trading week of June 25th, when Wall Street was really feeling the heat of Bear Stearns’ meltdown, General Motors’ stock closed the week up by 6.6%. For the week just ended, GM’s stock hit a 52-week high which tallies up to nearly a 43% gain from its 52-week low.

As Englund noted, General Motors’ stock closed this last quarter with a magnificent performance that served to steady a jittery stock market. And, quarter endings are important on Wall Street for the quarterly performance reports that go out, especially to mutual funds holders who now total in the tens of millions.

Englund goes on to discuss the members of the PPT. An interesting read, and an enlightening read for investors not familiar with the Plunge Protection Team and its behind the scenes activities.

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