Financial industry commentator Mary Kay Mason adds her two pennyworth, March 5, 2015, after reading the article The Foul Stench Of Desperation saying: “Americans have been ill for quite awhile, morally ill. Etiology: apathy. America has gone from intensive care, to palliative care and now on the deathbed of hospice care, gasping our last few breaths. Sure the Vampire bankers are sucking our blood to the last drop but I say we are to blame. We’ve kicked God to the curb, lusted for entertainment and our own personal peace and prosperity, ignoring the theft of our freedoms, ignoring our neighbors, whether they are across the street or across the world, as long as the remote is nearby and a bag of chips, all is well with our world. We have ignored the signs of fascism, burying our heads in the sands of apathy. We are the Pathetic Apathetics. We deserve everything that is coming to us.”
Here is the article that provoked such expressions of dire down-ness…. on our part, at Pressenza, we believe that even with such collapse of markets etc and the resulting chaos – that indeed will be very hurtful to everyone – there is an alternative, in fact more than one alternative, and the time is approaching when the conditions for such will be ripe – like NOW!
The Foul Stench Of Desperation
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 communications networks (ECNs) mysteriously “breaks” (see chart 1, source: zerohedge).
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 (See chart 2, source: St Louis Fed).
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 lead 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.