Wall Street and the Consumer in Parallel Universes

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Wall Street is optimistic about the future and so is the consumer. However, they are living in parallel universes, envisioning a different future. The Federal Reserve is inducing Wall Street and investors into believing that the consumer economy of the last two decades will be revived, while consumers themselves are not under the illusion (or have the luxury) of repeating their past mistakes.

Jupiter symbolizes optimism and expansion and is about to exactly conjoin Neptune (hope and illusion). Jupiter and Neptune will conjoin in the same degree in futuristic Aquarius on May 27, July 10, and December 21, 2009. This marks the first time Jupiter and Neptune have conjoined in Aquarius since 1843.*

The Moon is prominent during the three times Jupiter and Neptune form an exact alignment. The Moon represents consumers as the lunar energy describes what we need mentally and physically to feel safe and secure. On May 27 the Moon will be in its “home” sign Cancer, ruler of family, food, real estate, and consumables in general. The Moon in Aquarius will conjoin the Jupiter/Neptune alignment on July 10 and December 21. On all three occasions Jupiter and Neptune will conjoin the USA’s natal Moon in Aquarius.

Aquarius and its planetary ruler Uranus is known as the great awakener. Planets in Aquarius represent a wakeup call for reform through breaking free from outmoded ways of thinking and doing things. And because the Moon plays a prominent role at the time of these exact Jupiter/Neptune alignments, consumers can exhibit a greater tendency to feel (Moon) more optimistic (Jupiter) and hopeful (Neptune) about the future (Aquarius). Jupiter and Neptune have been closely conjoined since early May and will continue to be through July, and then again during December. (Because these are slow moving planets, they have influence in the time frame before and after being exact.)

Through its monetary policy of near zero interest rates and huge purchases of agency securities and Treasury debt, the Federal Reserve is trying to revive consumer spending. Yet despite the Fed’s efforts to keep mortgage rates below 5% to spur home sales and refinancing, much of the uptick in home sales can be attributed to purchases of foreclosed homes by speculators. And homeowners who qualify to refinance tend to be more inclined to put the money saved towards paying down debt and increasing their savings.

Jupiter and Neptune in Aquarius is about individuals (Aquarius) having faith (Neptune) in their own truth (Jupiter) and not the dogma dictated by the Fed’s economic models. This is why consumers feeling more optimistic and hopeful about the future does not translate into a revival of a consumer-based economy reminiscent of the 71% of GDP during the housing bubble. The fact that Wall Street and Aquarius energy is always forward-looking is only grasping one facet of this dynamic. The other component is that Aquarius energy is progressive rather than wasting energy trying to recreate the past. Aquarius is about moving forward into the realm of the unknown which by its nature is not reliably predictable.

This is the time to expand horizons (Jupiter) and step beyond the barriers and boundaries (Neptune) to do something new and different (Aquarius). Consumers have been deeply wounded and need to heal. The old philosophy of believing you could buy everything on credit** as the economy continued on a never ending upward trajectory has turned dreams into nightmares. For millions of consumers the debt has become a mountain too high to easily descend from (Pluto in Capricorn).

The government and Wall Street must be getting high on a pretty powerful mind altering substance (Neptune again!) to believe that consumers carrying a high debt burden can once again rescue the economy. Consumers have little fire power with miniscule or no savings and shrunken retirement accounts, in an environment of rising unemployment. And the consumers who are responsible enough to be in reasonably good financial condition are not likely to play ball with the Fed, even though those are the consumers most likely to take advantage of the Fed’s mortgage refinancing efforts.

The Federal Reserve is not concerned about inflation, but Jupiter/Neptune is a sure signal that inflation has arrived, even if cloaked in a slightly more unconventional (Aquarius) form. Jupiter expands and exaggerates, and Neptune inflates to form bubbles. And the Fed alludes that the inflation is just imaginary.

The USA is a debtor nation with natal Pluto (debt) in the area of the USA chart representing the economy. Buyers begin to pull back from purchasing treasuries out of the inflationary concern the government is issuing too much debt. With the nation’s central bank printing money, the only way to unload all the debt issuance is through rising yields. As treasury yields rise it will become increasingly more difficult for the Fed to keep a lid on interest rates.

Oil is a perfect example since it is ruled by Neptune. Economic fundamentals do not support the rapid rise in the price of oil since it is in abundant supply (Jupiter). But since oil is traded in USD, concerns over the USA’s massive debt binge has created dollar weakness which translates into higher oil prices.

As the influence of Jupiter and Neptune begins to wane, investors will see it was nothing more than a short term pleasant interlude known as a bear market rally. The next phase of the economic crisis could begin in late summer and is likely see the stock market break through its early March lows as the nation must grapple with the enormous structural changes it has spent years attempting to postpone.

*Jupiter and Neptune conjoin about every 12.5 to 13 years. Their last alignment was January 9, 1997 in Capricorn.

**Neptune rules credit (from the Latin “to believe”).

USA: July 4, 1776 5:10 PM Philadelphia, PA

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