Who caught the falling knife?

The burning question on my mind - and that of many astute investors, brokers and analysts, I'm sure - is who stepped in to the morass today and actually bought stocks when the Dow was down as much as 340 points at mid-day and off 300 points as late in the day as 3:15 pm.?

It would have to have been a magnificent leap of faith for so many investors to begin snapping up bargains at the same time. Maybe there was a case of mass psychosis on Wall and Broad that sent brokers,trancelike, to their trading machines to begin punching in buy orders.

No, readers, there can be no doubt that this spectacular rally was nothing more than the work of the mysterious Plunge Protection Team, better known as the PPT or the President's Working Group on Financial Markets, established by executive order by Ronald Reagan following the crash of 1987, and in operation - in some form or another - ever since.

The modus operandi is unmistakable. Once the PPT gears into action, stocks climb at dizzying speed and generally in non-stop fashion, just like today. It is also usually the case - as today - that the US markets will run counter to the trends set in the rest of the world's equity index. Today, markets in Europe were roiled, in their worst day in four years while the US markets staged a "miraculous recovery."

Dow 12,845.78 -15.69; NASDAQ 2,451.07 -7.76; S&P 500 1,411.27 +4.57; NYSE Composite 9,087.10 -1.94

Are US stocks so special, or our traders so astute, that they saw such tremendous buying opportunities that they would erase 300 points in losses on the Dow in a matter of 45 minutes? No. Never. The entire afternoon was a charade, designed to keep the public in the dark and avoid an all-out panic.

And they probably accomplished their mission. Americans are so gullible and, may I say, ignorant, as a group. We'll swallow any cockamamie story that is fed to us. We believe that FOX News is actually a news network, or that the Bush administration knew nothing about the 9/11 attacks until they actually took place.

The vast glut of American investors will certainly swallow this miracle rally story. Most of them are too concerned with making sure the tires on their Escalade are shiny or that their Blackberry is the newest model with the most gadgets to care much about the value of their retirement portfolio.

Seriously, what other people, as a group, would allow nameless people to manage an account which will be responsible for their financial well-being years from now? Americans will buy the phony story f today's markets.

You shouldn't. I don't. The global financial system has been brought to its knees and there is no easy way out. A stock market crash is inevitable, or, at best, with a helping hand of the PPT, a long, slow, tortuous decline. You don't have a choice in the matter. The powers that be, behind closed doors, will decide how it's going to play out.

Personally, if I'm going to lose a limb, I'd rather it be cut off with a single blow rather than a thousand small cuts and gnaws over a long period of time. The PPT obviously are fans of Chinese water torture.

Regardless of the intrigue by the PPT, the markets still took a pretty good beating and a lot of people lost more money today. Declining issues held sway over advancers by a 9-5 margin and new lows swamped new highs by a shocking 1475 to 47. To put that number in perspective, nearly one out of every four stocks listed on the NYSE and NASDAQ combined made a 52-week low TODAY!

Rally my arse! Stocks do not just turn corner and head the other way in the midst of a total collapse. Said collapse is still on track. Don't buy the hype.

To get an idea of how seriously close we are to witnessing the total collapse of world economies, check the oil futures today, which sold off as low as $70.10, settling with a loss of $2.33 to end the day at $71.00, on concerns that current and future economic conditions would foment a decline in demand for petroleum products such as gasoline, automotive fuel, petrol, call it what you will. These intrepid plungers don't scare easily, but judging by today's futures prices, they're more than just a little shaken up.

Quite possibly the strangest trading of the day - and the past few weeks, for that matter - has to be in gold. The shiny stuff fell by $21.70 to $658.00. Silver played along, dropping $1.06 to $11.50. For silver, it was a 9% decline in one day. The metals markets are supposed to be somewhat less volatile than that, besides the fact that they should be going up as stocks go down. They surely didn't today and haven't been of late.

The answer to why gold and silver sold off is simple. Everything that isn't cash is being sold to raise liquid funds, metals not excluded.

"Gold's slide into negative territory took an a new and decidedly ominous dimension on Thursday, as price support after price support gave way in the wake of mounting massive liquidations from all quarters," said Jon Nadler, an analyst at Kitco Bullion Dealers, in emailed comments.

"A wide range of commodities were being badly sideswiped in the frenzied quest to raise cash in order to mitigate stock losses by individual and institutional investors alike," Nadler said. "This was a very ugly day across the board."

We'll take his word for it.