Last Week’s Stock Market Action: Fannie, Freddie, Ben, Georgia, and Fay
Barron’s this weekend is patting themselves on the back for moving the market last week over their story on apocalypse now at Fannie Mae (FNM) and Freddie Mac (FRE).
The Wall Street Journal took the ball from there all week long. Most of the investment community seems to be under the illusion that there will be a total wipeout of GSE shares through government nationalization. But what if the Treasury secretary’s plan is to wipe out the dividends rather than the actual common and preferred shares? What if Paulson’s silence on the issue is to maintain the illusion that bondholders such as PIMCO’s Bill Gross will profit by keeping the GSEs debt propped up, and minimizing the spread between GSE debt and treasuries?
The Journal said fears about the GSEs began resurfacing in earnest on August 14. That’s when the Sun opposed Neptune, the planetary energy of illusion and deception. Last weekend when the Barron’s story came out, the Lunar Eclipse in Aquarius conjoined Neptune. The Sun, and particularly the Sun in Leo, relates to leaders, and its opposition to the Moon and Neptune in Aquarius can create plot twists that take strange and unexpected turns. Check out the video of PIMCO Managing Director Paul McCulley interviewed by CNBC at the Fed confab in Jackson Hole Friday. McCulley sounds like a spoiled child demanding that Treasury pass the plate to PIMCO. As I’ve written, a lunar eclipse is a super charged Full Moon!
Speaking of unexpected turns, Tropical Storm Fay was out to break some records. I guess she didn’t realize that with Mercury and Venus in Virgo she should have been precise with her path. After four landfalls since Tuesday and severe flooding throughout Florida, she’s still dumping heavy rain along the Panhandle and the Gulf Coast as a tropical depression. If I’d taken the time to look at Florida’s chart before Fay struck, I would have seen that the August 16 Lunar Eclipse conjoined Florida’s natal Mars and Neptune in Aquarius. Neptune rules the oceans and represents massive flooding. This will likely continue to be a problem for Florida at certain times over the next couple years, especially next spring and summer.
Neptune also rules chemicals and oil. With Uranus (wild speculation) in Pisces, the sign ruled by Neptune, oil speculation has rapidly risen since Uranus entered this sign in 2003. On August 20, Goldman Sachs (GS) reiterated their call for $149 barrel oil by year end. The Golden One has been a big oil bull all along, previously calling for $200 oil in 2008. As Saturn in Virgo and Uranus in Pisces move closer to their series of oppositions between November 4, 2008 and spring 2010, crude’s sharp spikes up and down will get larger and wilder. Oil will likely be much lower by the time Uranus wraps up its transit of Pisces in March 2011. Last week’s brief crude spike showed that geopolitics still has relevance in the market.
With Mercury and Venus in Virgo challenging his Sagittarius Sun on Friday, Bernanke’s speech at Jackson Hole was well received by the markets. Being Jupiter-ruled, Bernanke believes the dual mandate imposed by Congress is for growth and expansion in the economy and inflation. He continues to be optimistic that inflation “will moderate later this year and next year.” But that’s what he said last year and the year before that. Bernanke is committed to “medium-term price stability” -whatever that means. If he doesn’t raise rates, inflation could be the only thing that's growing next spring.
Disclosure: Long FRE
Correction: The following was added to this post on August 27, 2008 at 1:37 PM: In writing about Tropical Storm Fay hitting Florida, the August 16 Lunar Eclipse conjoined Florida's natal Venus (not Mars) and Neptune in Aquarius.
Posted 8/24/2008 04:53:00 PM