We're on the same page with the overseas banks story (from here):
The Bank of Japan, holder of the second-biggest reserves, said April 4 it will more than double investments in equity exchange-traded funds to 3.5 trillion yen ($35.2 billion) by 2014. The Bank of Israel bought stocks for the first time last year while the Swiss National Bank and the Czech National Bank have boosted their holdings to at least 10 percent of reserves.
There's no hard info on the Fed owning common stock, futures, derivatives, or ETF's. That means it'd have to be super secret trades that are invisible to any kind of radar. Kind of like the black helicopters or those mind control cosmic rays we ward off w/ tin-foil hats. So what we're really seriously talking about here is world wide a few billion in funds (say $100B ?) managed by private firms out of a total world wide market cap of maybe $50T.
We need to understand clearly here that $50T is 500 times bigger than $100B and that buying a fifth of a percent does not represent "control".
“That means it’d have to be super secret trades that are invisible to any kind of radar. Kind of like the black helicopters or those mind control cosmic rays we ward off w/ tin-foil hats. So what we’re really seriously talking about here is world wide a few billion in funds (say $100B ?) managed by private firms out of a total world wide market cap of maybe $50T.”
Thanks for sharing your thoughts. My head trader says he has never seen anything like this in his long career.
Since we agree that Central Banks around the world are buying S&P futures contracts, why would you imagine that the largest central bank in the world - the Federal Reserve - is not doing the same?
Remember that the Fed trades through major investment banks around the world. They do not disclose their work. Also remember that (in your estimate), $100 billion USD can buy a huge amount of derivatives of many kinds as leverage.
The Fed cannot buy the whole market. Nor do they desire to do so. Nor do they need to do so. They can control the edges to prevent severe declines and to promote the idea that all is normal. It happens regularly.