Today’s Wall Street Journal features an above the fold cover story called “Stocks Tarnished By ‘Lost Decade’” By E.S. Browning. The Journal article defines a “lost decade” as a period lasting over 10 years when stocks end up back where they started from.
The stock market is currently in a lost decade that began in 1999, as the S&P500 is trading “below the 1362.80 level it hit in April 1999.” Citing Morningstar, Browning writes: “When dividends and inflation are factored into returns, the S&P 500 has risen an average of just 1.3% a year over the past ten years, well below the historical norm.” Examining the bar graph in the article supports that: “Over the past nine years, the S&P500 is the worst-performing of nine different investment vehicles, including commodities, gold, foreign stocks, and Treasury bonds (adjusted for inflation).”
The lost decade is essentially the bust that follows a boom cycle. The article’s accompanying chart outlines two prior lost decades: 1929-1942 and 1966-1982. These periods, along with the current period, have one thing in common: Saturn’s opposition to the outer planets.
The planetary energy of Saturn relates to economic contraction. It rules business and government structures. Pluto rules debt and massive financial gain and loss. The overall cycle begins when Saturn conjoins with Pluto, starting a business boom of massive financial speculation that peaks around the time the two planets are in opposition to each other. From the opposition to the next time the two planets are conjoined represents a period of stock market stagnation. The market may reach new highs, only to fall further than before. In most cases, this part of the Saturn/Pluto cycle results in increasing government deficits, taxes, and inflation. Business and government structures must be reformed or new ones established as the result of unsustainable growth and risk taking.
Within the waning economic cycle of Saturn opposite Pluto, Saturn usually also opposes Uranus and Neptune. Uranus energies create shocks, extreme volatility, upheavals, and a push/pull between what is new and emerging vs. the status quo. Neptune rules credit. The planet of illusion creates and dissolves asset bubbles.
Here is a planetary analysis of the three lost decades the Journal cites:
Lost Decade #1: 1929 - 1942
- 1929: The October crash occurred at a time when Pluto’s energies were dominant, representing massive financial loss. Pluto was discovered on February 18, 1930.
- 1931: Saturn in Capricorn opposes Pluto in Cancer (1915: Saturn conjoined Pluto = start of cycle).
- 1936: Saturn in Pisces opposes Neptune in Virgo
- 1920: Saturn in Virgo opposes Uranus in Pisces. Of the three lost decades, this was the only instance where Saturn did not first oppose Pluto before reaching opposition to Uranus and Neptune. However, in 1920 Saturn was in Virgo and Uranus was in Pisces – the same signs they are in now. (Pisces is ruled by Neptune.)
Lost Decade #2: 1966 – 1982
- 1966: Saturn in Pisces opposes Pluto in Virgo (1947: Saturn conjoined Pluto = start of cycle)
- 1966: Saturn in Pisces opposes Uranus in Virgo
- 1972: Saturn in Gemini opposes Neptune in Sagittarius
- 1977-1980: Saturn in Virgo creates high inflation and a commodity Bull Run just like now.
Lost Decade #3: 1999-2008
- 2001: Saturn in Gemini opposes Pluto in Sagittarius (1982: Saturn conjoined Pluto = start of cycle).
- 2007: Saturn in Leo opposes Neptune in Aquarius. The final alignment of these two energies occurred on June 25, signaling the Party’s Over.
- 2008: Pluto in Capricorn, the opposite sign it was in during the Great Depression. (Capricorn is ruled by Saturn.) After sojourning back into Sagittarius from June 13-Nov 26, Pluto will remain here until 2024, transforming corporate and governmental structures.
- 2008: Saturn in Virgo opposes Uranus in Pisces five times between November 2008 and July 2010.
The next time Saturn begins a new cycle with Pluto is January 12, 2020. That’s not to say the lost decade will continue until then, as there are many other planetary energies that affect market cycles besides what is outlined here. However, I think the earliest the stock market will reach rock bottom is during the summer of 2010. This is when Jupiter (big moves), Saturn, Uranus, and Pluto are aspecting each other in signs that usher in rapidly unfolding events resulting in massive financial and global transformation.