As would be expected after the Greek public voted down down the terms of the Troika bailout offer, the S&P 500 futures gapped down 30 points yesterday evening when global electronic trading of the markets commenced after the Greek “NO” vote. Gold popped up $8. The rest of the evening and overnight session was spent pushing the S&P 500 back up:
And gold back down:
The Shanghai Stock Exchange is down nearly 30% since mid-June. A veritable crash resulting from a crumbling Chinese economy which could no longer support Chinese stock market bubble valuations. The Chinese economy is tanking because exports to it China’s two biggest import countries are tanking. For evidence of this look no further than the Shanghai Containerize Freight Index – LINK – which is down 32% since late 2014.
If exports are not leaving Shanghai, it’s because of weak demand from Europe and the U.S. I have written several articles demonstrating that the U.S. economy is continuously growing weaker.
European stock markets are all down 1.5-2% today in response to the Greek vote. Only time will tell how this Greek Tragedy will play out. But if the Troika compromises with Greece, it will likely be forced into even larger compromises with Italy, France, Spain and Portugal.
The point here is that the global economy is falling apart – quickly. And the only markets in which that fact is not being reflected is in select U.S. stock indices and in the Comex paper gold and silver market. As I started to write this, the Plunge Protection Team has pushed the S&P 500 into a gain from Thursday’s close. It has since faded back into negative territory.
Many sub-indices and stock market sectors are reluctantly reflecting the underlying fundamental economic realities. The financial guarantee stocks, which were one of the primary omens of the 2008 market collapse, are down 20% – 40% in the last eight trading days. These stocks reflect the extreme financial risk embedded in the system. The Dow Jones Transports are down 11% since late November. This huge divergence from the S&P 500 reflects the deteriorating condition of the U.S. consumer.
The only indices not reflecting reality are the Dow and the S&P 500. These also happen to be the only stock indices that are reported to the public by mainstream media. The only conclusion that can be drawn is that the blatant and interminable market intervention in these stock indices is a definitive reflection of the Government’s overt attempt to impose total control over our system and our lives.
Not only are the markets a complete joke, but they have become symbolic of the U.S. Government’s creep into a system of totalitarian control. Once the TPP Agreement has been signed and ratified, our country will be changed forever. THAT’S what the action in the stock market today is telling us.