WallStreetweather.net Forecast For Week Of April 20, 2009
Summary Of Last Week’s Influences:
Last week began with the Moon in Jupiter- ruled Sagittarius, putting the focus on foreign relations and economic philosophy with a religious foundation. On Monday President Obama announced he would lift communications and travel restrictions with Cuba.
The next day, the President and Fed Chairman Bernanke gave speeches that used religious parables. The President explained his “Five Pillars” to build a foundation for economic recovery, believing that the first pillar is to have the government recreate the bubble that got us into this economic mess in the first place. (The key pillar here is that even Larry Summers endorses healthcare reform.) Even though the indices continued to gain last week, March retail sales results Tuesday kept the market down all day. The US and China will have to learn the hard way that US consumer spending can no longer comprise 70-75% of the US economy.
Speaking of consumers, General Growth Properties (GGP), the second largest US mall operator, filed for Chapter 11 bankruptcy Thursday. I’ve written about the rise of commercial and retail bankruptcies, and this is just the tip of the iceberg. Beyond reduced consumer spending, General Growth was one of the largest users of commercial mortgage-backed securities (CMBS). According to The Wall Street Journal, CMBS were originally created by the RTC after the S&L crisis to package groups of mortgages to sell as securities to buyers with various risk tolerances. The Journal quotes a report by Deutsche Bank (DB), estimating that $154.5 billion of CMBS loans will come due between now and 2012, and DB estimates that two thirds of these loans won’t qualify for refinancing. Now the Fed is considering allowing CMBS into its TALF program. This shows you how berserk Bernanke has went with these programs that he would even consider a mall operator to be a systemic risk.
Bernanke’s speech Tuesday was “Four Questions About The Financial Crisis,” a takeoff of Passover. I only have one question for Bernanke: What is your exit plan to unwind all the excess liquidity in the system? Having an exit off of I-95 christened “The Ben Bernanke Interchange” just doesn’t cut it. The exit is for Dillon, South Carolina, the home of “South of the Border.” But that’s a parable that Bernanke would prefer not to elaborate on.
President Obama could start fixing his first pillar by putting Paul Volcker in charge of the Fed and the Treasury. After all, they’re one in the same now.
Summary Of This Week’s Influences:
There are some major planetary shifts this week, and they all relate one way or another to banking and financial values.
Ruled by Venus, Taurus rules banks, money and tangible assets. Mercury moved into Taurus April 9, the day that Wells Fargo (WFC) announced they expect to earn a $3 billion first quarter profit. Today the Sun enters Taurus until May 20. During this time we will see if the indices and bank stocks in particular, continue their bullish bias that began after Venus turned retrograde*** March 6. Venus turned direct April 17, increasing the potential that the market’s gains since the March 6 lows were a temporary reversal.
As the first sign of the earth element*, Taurus energy tends to proceed with caution, taking a slow and steady approach to investing. Taurus energy needs to be assured that equity gains are supported by solid fundamentals. Taurus is a fixed** sign that can be slow to respond to changing conditions. Taurus energy tends to hold on to investments too long, trying to inch out more profit, stubbornly believing that the stock will bounce back.
Since the Sun rules speculation and the heart, and Taurus rules banking, it was no surprise to me that the government is scheduled to release a “white paper” on Venus-ruled Friday, the day of the Taurus New Moon. The report will outline the criteria used in the stress test the Federal Reserve and other banking regulators administered to assess the health of the 19 largest financial institutions that received TARP.
Regulators could begin informing banks of preliminary results beginning April 24, and the government is scheduled to publicly release some of the test results on May 4. Bloomberg reports the government has “no set plan for how much information to release, how to categorize the results or who should make the announcements.” Operating without a clear cut plan and providing few details are what caused markets to plunge February 10 when Treasury Secretary Geithner announced the government would begin stress testing the banks. Announcing a plan with no details did not sit well with the market as the Moon was in Virgo then. The government better quickly get their act together as the Moon will again be in Virgo on May 4. Moon in Virgo energy requires the minutest level of detail possible to feel secure.
The Moon will be in Pisces Monday and Tuesday, highlighted by Venus and Mars in Pisces conjoining on Tuesday, providing a brief escape flight of fantasy.
By mid morning Wednesday the Moon has entered Aries (until mid-afternoon Friday) and so has Mars, the planetary ruler of Aries. Mars will be in its “home” sign until May 31. Alan Abelson’s column in Barron’s (“Don’t Bank on It”) perfectly describes Mars/Aries energy: “hit and run investing.” And contrary to what the Bloomberg article linked to above says, this energy does not usually have “six minutes” of patience. This impulsive energy acts first and asks questions later. Venus re-enters Aries Friday until June 6. (Venus was previously in Aries February 2 to April 11.)
When you put it all together, it appears that volatility is going to increase this week as bearish sentiment begins creeping back in even though it is still likely to get interspersed with bursts of sharp upside surprises. Uranus energies represent the future. As earnings season gets in full swing this week, the market wants to know the corporate outlook for the months and year(s) ahead . Jupiter will conjoin Neptune in Uranus-ruled Aquarius on May 27. Jupiter relates to growth and expansion; Neptune credit, inflation, and the art of illusion. Uranus is always a wild card. These energies can continue their euphoric ride or just as quickly expand into another hysteria-induced financial tsunami with Uranus in Pisces. (Think about last year’s oil bubble that burst.) Neptune rules market bubbles, and this time the bubble isn’t just government endorsed but 100% government born and bred.
Monday, April 20, 2009
Swings from negative to choppy/mixed conditions to moderately positive.
Tuesday, April 21, 2009
Negative; improves to choppy/mixed to moderately positive.
Wednesday, April 22, 2009
Volatility picks up as market reacts to mixed pieces of news (choppy/mixed). Could see improvement going into the close.
Thursday, April 23, 2009
Negative; could bottom in mid afternoon and begin to improve.
Friday, April 24, 2009
Choppy, creating potential for sharp moves in either or both directions. Mercury in Taurus challenging Neptune in Aquarius obscures the ability to accurately measure true value now.
*Virgo and Capricorn also comprise the earth element.
**Leo, Scorpio and Aquarius are the other fixed signs.
***Planets do not really move backwards but appear to from Earth’s vantage point.
Bloomberg: “Fed’s Kohn, Dudley Defend Size, Scope of Emergency Loan Plans”
Posted 4/19/2009 06:49:00 PM