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Where is the PPT?

If that acronym, short for Plunge Protection Team, doesn't immediately conjure up images of government officials and representatives of large Wall Street banks (think Goldman Sachs) conspiring to support the stock market, you don't spend enough time with the black-helicopter crowd.

The idea that there is a cabal of government and private-sector individuals who secretly support the stock market in times of distress does have a small basis in fact. After the 1987 stock market crash, then-President Reagan formed a high-level Working Group on Financial Markets to discuss options in the event of a financial crisis and disorderly markets. The group consists of the secretary of the Treasury and the chairmen of the Federal Reserve, the Securities and Exchange Commission and the Commodity Futures Trading Commission.

Reporter Brett Fromson described the inner workings of the group and coined the term Plunge Protection Team in a 1997 Washington Post article.

Anyone who can't prove that the PPT doesn't exist is immediately dismissed as a pawn of the government or a part of the cabal.

What is their proof that the PPT exists? To a person, these folks haul out two presumably incontrovertible pieces of evidence: one, a mention of the PPT by ABC's George Stephanopoulos on TV shortly after the Sept. 11, 2001, terrorist attacks; and two, a 1989 Wall Street Journal op-ed by former Federal Reserve Governor Robert Heller.

Let's start with Stephanopoulos, who was an adviser to former President Clinton. PPT conspiracy theorists maintain that Stephanopoulos "verified" the existence of the PPT in 2001 when he explained what was going on "behind the scenes by the Fed and other government officials to guard against a free-fall in the markets."

But rather than reveal any dark secrets about the existence of the PPT, Stephanopoulos showed his complete lack of fluency with previous PPT Close Encounters of the Third Kind.

The other "conclusive" piece of evidence is the Heller op-ed in the Wall Street Journal that appeared in October 1989, after a mini-crash in the U.S. stock market. Heller wrote that the Fed "should be charged with the job of preventing chaos in the market" at times when the spread between bids and offers widens to the point that no trading takes place.

Back in those days, "I was not comfortable with how things were proceeding," in terms of the pressure on banks to lend to investment banks in a crisis, Heller said last week. (This was before the Glass-Steagall wall separating the two came down.) Under the circumstances, he advocated "intervention in the futures market," buying S&P 500 contracts or another index.

"If markets cease to function - if bid-ask spreads widen a lot - under those circumstances it makes sense for government to step in," Heller said.

So did Heller have any evidence that anyone at the Fed or elsewhere had run with his idea? He said no. How about some inside info on the PPT seeing that he seemed to be a member in good standing?

"I didn't know a cabal existed until a reporter called me up and asked me about the PPT, saying 'you invented it,' " he said.