Market action is largely predicated on the belief that foreign investment can save U.S. credit and equities markets.
Jupiter, the planet of expansion has resided in its “home” sign of Sagittarius since November 23, 2006. Jupiter/Sagittarius rule anything considered “foreign”. This combination also rules philosophy, politics, religion, ethics/truth, lawyers/judicial system. This energy has given a big boost to foreign investment in the last year.
Pluto represents massive wealth and power controlled by an elite few (plutocracy). Pluto is the cycle of decay, death, and transformation. It represents secrets and things hidden below the surface. Pluto has resided in Sagittarius since January 1995, which has manifested in the globalization phenomenon. This transit saw the rise in religious fundamentalism/terrorism, as Pluto relates to obsessive extremist behavior and Sagittarius rules religion.
Now these two planets are coming together on December 11, 2007, as they do every thirteen years. Financially, this alignment represents issues revolving around big (Jupiter) debt/lending (Pluto). When these two planets last conjoined in 1994 in Scorpio (Pluto’s “home” sign), Orange County California defaulted on its municipal bonds.
The Street is playing out two foreign-related themes: that the U.S. economic situation is “decoupled” from the rest of world (so invest in anything foreign), and foreign investment will flock to the U.S. Jupiter/Sagittarius is about optimism and the belief that something or someone will keep Mr. Market moving happily upward. However, Pluto knows that things are never what they appear to be and corresponds to the overdone flight to safety in Treasuries.
Now that I’ve set the stage, Part II will explore more of the ramifications of this important alignment from a financial and geopolitical perspective.