Could the US Government Have Sparked the 2009 Rally?

Well at least some players have said so.

"We know that the U.S. government has spent hundreds of billions of dollars to support the auto industry, the housing market, and the banks and brokers. Why not support the stock market as well?"

The Federal Reserve or the Treasury, Biderman said, could have easily manipulated the stock market by purchasing $60 to $70 billion worth of futures of the S&P 500 Index (SPX 1,137, +3.53, +0.31%) on a monthly basis.

$60 - $70 billion is walking around money when it comes to government spending so it is somewhat plausible to say the least. It makes sense from a social engineering point of view. A sustained downward stock market would destroy quite a few 401Ks and thus create quite a few angry voters. Investors are the kind of people that give to financial campaigns and could make or break a candidate.

Consumer sentiment and reelection chances seem tied quite well to stock market gains and losses for the most part. I remember there was quite a bit of blame that there was an "Obama Crash" right before the market turned around.

"It bobs up and down from day to day," the president said Tuesday. "And if you spend all your time worrying about that, you're probably going to get the long-term strategy wrong."

Most of the bobbing lately has been in one direction, relentlessly down. But Obama suggested that now is a good time for investors with "a long-term perspective" to buy stocks.

This was said on March 4th and the S&P 500 hit bottom on March 9th at 676.53. The S&P 500 is now at 1136.52 which is nearly a double. So the conspiracy theorist in me has Obama telling Treasury to peel off a few billion from the TARP money and then go out and buy some S&P 500 futures.

If it is true then I commend Obama for making me a pile of money that I probably wouldn't have right now. It might be illegal as hell but the government usually makes their own rules when it comes to this kind of stuff. I mean who would have thought the American people would own 2 mortgage buyers(with unlimited, uncapped losses,) an insurance company, and 2 car makers right now?