You think everything’s peachy in the financial world now that Cramer’s back from vacation telling you to “BuyBuyBuy”? Check out the current Economist cover story on “The Trouble with Private Equity” and its related article “The Business of Making Money”.
The Economist cover is a twenty-first century version of The Fool in the Tarot card deck*: The private equity manager is looking at his PDA oblivious to the fact that he’s one step away from falling off the mountaintop. This is sooo symbolic to the transit of Saturn (which is about making it to the top of the mountain careerwise) in Leo (the king/the stockmarket), and its aspect to Neptune (bubbles/interest rates/debt/illusions) in Aquarius (investment groups).
During the transit of Saturn in Cancer (June 2003 – July 2005), we had the peak of the real estate bubble as Cancer rules real estate. Reading the Economist article I could see the parallels between the home flippers and the private equity players. The flippers paid too much and took on too much debt and are now left paying all the carrying costs for a property they thought they would have long made a killing on, and now their ARM is about to reset.
The Economist: “It may well be, however, that the peak of the cycle is close at hand.” Saturn’s opposition to Neptune is separating. Saturn’s transit of Leo ends on September 2, 2007.
* Tarot cards are a deck of 78 cards that are the precursor of modern playing cards. Each card is a picture, rich in symbolism, that can be interpreted alone or with multiple cards.