By John Crudele
Did Washington save the stock market on Monday?
It may be hard to make the case that anyone or anything helped Wall Street as stocks lost about 4 percent of their value and the Dow Jones industrial average tumbled 1,175 points — after a 666-point decline on Friday.
But the Dow and other indices were in complete collapse right before the start of Monday’s final hour of trading. At one point the Dow, which represents only 30 stocks but is still a widely followed indicator, tumbled to a loss of about 1,600 points.
That’s as big of a decline as ever.
But then something happened. Someone arbitrarily and aggressively started buying stocks and halved the loss. Monday will still go down as a Wall Street massacre but that superhero buyer made it half as bloody.
Who was the market’s superhero?
Toward the end of his time in office in 1989, Ronald Reagan created something called The President’s Working Group on Financial Markets. There had been a stock market crash in 1987 and a near-crash in 1989, so everyone was worried.
The Working Group was ostensibly an advisory body that was meant to help politicians in general and the person in the White House specifically understand the markets. The members would write papers, talk and come up with solutions.
A lot of us thought it was something much more, and the Working Group unofficially became known as the Plunge Protection Team.
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