Why conspiracy theorists are wrong about plunge protection

Perhaps you've heard of the Plunge Protection Team (PPT). If not, let me acquaint you with this august group. You know all those gut-wrenching dives in the Standard & Poor's 500 Index that mysteriously stabilise, then reverse into huge rallies into the futures close? If you are a conspiracy theorist, the PPT is a select group of government officials and bankers who intervene from time to time to support the stock market. According to some traders, pundits and a slick band of conspiracy theorists, the Federal Reserve, the same central bank that buys and sells government securities a...