Something is really wrong behind the scenes. The insiders are exhibiting an extreme degree of desperation to keep the price of gold and silver from trading freely and to keep the stock market from plunging. Every time the S&P 500/Dow are in a free-fall, one of the big HFT electronic commications networks (ECNs) mysteriously “breaks” (source: zerohedge): click to enlarge
Today the S&P 500 was down 16 points and falling quickly. Then the BATS ECN announced that it had to suspend trading in all of its trade routing systems to the NYSE. It just so happens that BATS is one of the largest, if not the largest, electronic communication networks in the world. This happens every time the stock market goes into cliff-dive mode. How come it NEVER happens when the S&P 500 is going parabolic to the upside?
The economy is starting to fall apart. The plunging price of oil is just one indicator. Retail sales down nearly 1% two months in a row with one of the months being December, which is historically the best month of the year for retail sales. DOWN 1%. Declines in retail sales are not very common – especially back-to-back monthly declines just under 1%. It means that consumers are not buying. They are not buying because they have run out of money.
Revolving credit balances have been rising steadily now since 2011. The rise has begun to accelerate (source: St Louis Fed, click to enlarge):
Contrary to popular Wall Street myth, consumers don’t take out an increasing amount of high-cost credit card debt when they feel “good” about the economy. Since the mid-2000’s people have been using credit card debt increasingly to pay for necessities: food, gasoline, etc. Many will even put their monthly mortgage payment on their credit card. This is part of the dynamic that led to the credit market collapse in 2008. Banks are all too willing to issue them to everyone with less than stellar credit ratings because they can charge 15% (current average APR) on money for which they are borrowing from depositors for almost 0%.
How do we know that consumers don’t “feel good” about the economy? Because if you review all of recent macro economic surveys, you’ll find that they all have sub-indices which measure “sentiment” or “expectations.” Those sub-indices in particular are plunging.
I don’t know how much longer “they” can keep up this absurd charade, but I know when that when they lose control the collapse will be spectacular.