Wall Street Weather Forecast For Week Of April 6, 2009
Summary Of Last Week’s Influences:
Since ancient times the theme of sacrifice, death, and rebirth has been celebrated at this time of year. Events in financial markets and global politics last week certainly reflected this theme made more intense by the planetary energies of Venus in Aries retrograde challenging a stationary retrograde Pluto in Capricorn.
The Vernal Equinox on March 20 marked the moment when Spring began in the northern hemisphere as the Sun entered Aries, the first sign of the zodiac. The first New Moon following the Vernal Equinox is a powerful time of the year to spring into action by taking a pioneering and bold approach.
On the March 26 Aries New Moon, President Obama and the members of his Auto Task Force, began to take action in response to the auto restructuring plans Chrysler and General Motors (GM) submitted on February 17, 2009. I had written last year that Rick Wagoner’s chart looked challenging especially during the first quarter of 2009. It was reported that the decision to fire Wagoner was the first decision to be made as a symbol of change. For Wagoner, “sacrifice” is leaving GM with around $21 million.
Venus represents banking/finance and agreements/partnerships. Pluto represents debt, and in Capricorn, debt that has accumulated over time and costs associated with older workers. Pluto is the cycle of decay, death and rebirth. What is not working anymore is in a cycle of decay and must die in order to transform and be reborn into something viable.
President Obama is giving Chrysler 30 days to partner with Fiat (FIATY), and GM 60 days to substantially restructure its debt and liabilities with its bondholders and the UAW. If the automakers fail to meet these and other requirements of the Administration, they will go into Pluto-ruled bankruptcy. This was the conclusion of my three part post (Part I, Part II, Part III) last year on the automakers. With Pluto opposing the USA’s natal Venus and Jupiter in Cancer over the next couple years, bankruptcies are likely to reach record levels.
Chrysler will end up filing Chapter 7, its plants and components used for other endeavors. Neptune dissolves current conditions, and as this planetary energy is pronounced in late May, GM will go through Chapter 11 to shed the debts and obligations it is unable to do outside of bankruptcy. Fritz Henderson, a 25 year GM veteran was appointed by the Administration to replace Wagoner. Based on the transits to his chart, I think it is unlikely Henderson will be running GM for very long.
Despite the fact that Paulson, Bernanke, and Geithner called the market’s bluff on Lehman Brothers, the market thinks President Obama would not force these companies into bankruptcy as it would hurt union workers. The US automakers have been crushed by a combination of their own incompetence and out of control healthcare costs. The Administration will let these workers lose their healthcare benefits in order to provide the nation with healthcare for all.
After Monday’s sharp market decline for fear the Administration will start sacking bank execs, the indices continued back on their upward trend that began when Venus went retrograde March 6. By Thursday, financial markets around the globe were thrilled when British PM Gordon Brown declared that the G20 meeting marked the emergence of a “new world order.” Translation: the most powerful plutocrats are in government (Capricorn), not private industry.
And now we get to the parts where financial arrangements (Venus) are not what they appear to be on the surface. When Pluto energies are pronounced, some secrets get spilled and others get covered up. Of the $1.1 trillion pledged at the G20 summit, half of it comprised of future promises, and the other half for the IMF to boost every member country’s forex reserves. The G20 has agreed to ask the IMF to sell 403 tons of gold to finance assistance to the poor; additional sales may be considered.
Speaking of metals, Venus rules copper which is doing better than gold at the moment. Copper prices in Shanghai are trading higher than on the LME based on current demand in China. Rising prices are also based on the belief that the stimulus spending could start to spur demand here. Perhaps demand for copper could start with rewiring homes damaged by Chinese drywall.
Planets appearing to be in retrograde motion can indicate reversals of decisions. Capricorn is ruled by Saturn and with Saturn in Virgo (accounting rules and regulations) retrograde until May 16, FASB bowed to political pressure and reversed its “mark to market” accounting rule for Level III assets. Now banks can value (Venus) all those illiquid toxic (Pluto) assets by their own in-house models vs. current market prices.
This is yet another example of how the Bush and the Obama Administrations never fully think through how one action affects another. If banks no longer have to mark these toxic assets at current values, what’s their motivation for selling them into Geithner’s public-private plan? And more importantly, why have the government overpay for this junk when super TARPed Bank of America (BAC) and Citigroup (C) are using the $45 billion combined government bailout to scoop up other MBS in the secondary market. (Even The New York Post recognizes that Pluto rules all things toxic!)
As much as the government protested AIG’s bonuses and are getting more agitated over Fannie (FNM) and Freddie’s (FRE), Congress loves to give out bonuses to their staff rather than return to the “taxpayers” any funds left over at the end of the year from their office budget. House Financial Services Committee Chairman Barney Frank gave bonuses to committee staffers for all the long hours they slogged on the TARP legislation last fall.
And then there’s NEC Director Larry Summers who was paid $45,000 to give a speech on November 12 to Merrill Lynch, one month after the firm had been TARPed and when he knew he would be taking a position in the Administration. Summers, who earned $2.7 million giving speeches to mostly now TARPed banks, should have given the money to the “taxpayers” rather than charity. With Jupiter and Neptune getting ready to converge on his natal Mars and Pluto, it will be interesting to see if this and more could manage to get him booted out of the White House.
Summary Of This Week’s Influences:
This is an abbreviated week, as markets will be closed for Good Friday. Doubt and increasing volatility looks to be slowly seeping into the bullish outlook.
Monday, April 6, 2009
Negative trend bias early; could see improvement near midday to choppy/mixed to moderately positive conditions.
Tuesday, April 7, 2009
Volatile; negative trend bias. Strongest in afternoon, and could even briefly swing in the opposite direction. Markets could be worried about rising interest rates.
Wednesday, April 8, 2009
Yesterday’s sentiment could carry over early; improves and likely turns positive later in session.
Thursday, April 9, 2009
Positive, especially in the morning to early afternoon. The bond market closes at 2:00 PM.
Frederick “Fritz” Henderson: November 29, 1958 time unknown Detroit, Michigan