Published by WallStreetWeather.net
Right now the only issue that seems to be fostering any sense of bipartisanship in Congress is enacting legislation that would transform the purpose and scope of the Federal Reserve from its current existence. This is reflected by Saturn and Pluto challenging the Fed’s natal Sun (its identity/purpose), Pluto (power/secretive activities), and Midheaven (the sector of the chart representing the Fed’s reputation). The Sun also represents the Fed Chairman, and as I described in a post written in September 2007, these profound changes could make it difficult for Ben Bernanke to continue at the helm of the Fed.
On November 19 the House Financial Services Committee voted 43-26 to pass an amendment sponsored by Rep. Ron Paul (R-TX) and co-sponsored by Rep. Alan Grayson (D-FL) as part of the House financial regulatory reform legislation. The amendment would audit the Fed and its 12 regional banks, and overturn a 1978 law prohibiting the GAO from auditing the Fed’s decisions on interest rates. The results of the audits would be made public after six months.
The House and Senate financial reform bills would strip the Fed of its power to regulate consumer finance which would be handled by a new Consumer Financial Protection Agency (CFPA). The Senate version of the bill would go one step further, stripping the Fed of its power to regulate banks for the first time in the central bank’s history. The fact that Bernanke wants to know when Bank of America (BAC) and eight other banks are going to repay TARP even though as their regulator the Fed should already know the answer is yet another example of the Fed’s incompetence as a bank regulator.
After the Fed enabled the housing and credit bubbles, bailed out the banks when the bubbles burst, then helped restore the banks profits to record levels and in the process created another asset bubble that is weakening the dollar, it’s not surprising that a Gallup poll taken in July showed only 30% of Americans surveyed said the Fed was doing a good job. This was the lowest rating respondents gave to any Federal agency; even the I.R.S. received a 40% favorable rating! The Fed has recreated the “wealth effect” on Wall St, while zero interest rates have penalized savers and have not reduced lending rates (with the exception of prime guaranteed mortgages) for most consumers and businesses.
Bernanke pretends to be transparent about the Fed’s activities, yet Bloomberg continues to battle the Fed in court through a Freedom of Information Act lawsuit. Despite the Fed’s claims to be “independent” and above politics, Bernanke has been busy meeting with members of Congress in private to plead his case for keeping the Fed’s powers intact. His sales pitch is to remind politicians that the financial crisis would have been far worse had it not been for the Fed’s actions. (Someone really needs to ask Bernanke if the economy would have been this bad in the first place if the Fed had kept interest rates higher and had restricted banks ability to engage in the non-agency MBS market.)
Bernanke’s confirmation hearing is scheduled to take place on December 3 at 10:00 AM. When Senate Banking Committee Chairman Christopher Dodd was asked by blogger Mike Stark if it was a “foregone conclusion” that Bernanke would be confirmed, Dodd’s response was “not necessarily, not necessarily.”
When a planet from Earth’s vantage point appears to be stationary in the sky, its energies are particularly pronounced. Uranus represents sudden and unexpected surprises that serve as a wakeup call. There’s a tendency to exert more unconventional views, as people are less inclined to adhere to the status quo. This energy will be particularly pronounced from November 29 through December 4 as Uranus turns direct December 1 after being retrograde since July 1.
Uranus in Pisces is squaring Bernanke’s Sun in Jupiter-ruled Sagittarius opposite natal Jupiter in Gemini retrograde. He could be taken off guard by the questions and remarks made by the Senators who disagree with his high stakes gamble of repeating the same ideological policies that caused the current crisis. Bernanke is too confident that his academic theories favoring an over expansion of the money supply will not damage our currency so badly that the U.S. loses all credibility in its relations with foreign governments.
Mars is action and anger. Mars in Leo creates real life melodrama that rivals any TV show. With Mars in Leo opposing Bernanke’s progressed* Sun in Aquarius, Bernanke could be pushed into some heated exchanges with Senators opposed to the Fed’s policy of lending to companies “in unusual and exigent circumstances.”
As described in a previous post, Neptune and then Jupiter in Aquarius are once again opposing Bernanke’s Pluto in Leo, potentially exposing information Bernanke might have deceitfully kept under wrap. Venus conjoining Bernanke’s Mercury in Sagittarius indicates that he will have to provide additional documentation and explain in detail the financial arrangements the Fed has made with the asset managers, lawyers, and accountants the Fed hired to administer its lending programs and manage the assets on the Fed’s books.
The pronounced energies of Uranus occur at the same time as the December 2 Full Moon which conjoins and opposes Bernanke’s Venus in Sagittarius. This can enhance Bernanke’s ability to diplomatically circumvent some of his opponent’s assertions, but he is not likely to avoid the emotional intensity from some Senators upset with how the Fed’s monetary policies are helping Wall St. at Main St’s expense, and why they’re concerned that the Fed’s policies are creating anything but “an orderly retreat” in the dollar . Bernanke will be forced to explain why he opposes the Administration’s plan to separate consumer finance from bank regulation.
Bernanke underestimates the work, compromises, and sacrifices required if he is to continue his role as Chairman of the Federal Reserve. Even more importantly, Wall St. and Washington are severely underestimating the repercussions if they believe Bernanke’s big bet that zero interest rates and excess liquidity can be maintained “for an extended period of time” without causing “excessive risk taking in financial markets or an unanchoring of inflation expectations” to erupt into a second financial crisis.
In essence, what we are seeing is that Bernanke is coming up with every possible justification and excuse to go back to the Greenspan years. The square of Saturn and Pluto forming challenging alignments to the USA’s reputation (Midheaven), Venus (wealth), and Jupiter (abundance), is teaching the nation a lesson that an imbalanced economy is not only living on borrowed money, but on borrowed time.
*A mathematical calculation that moves the planets forward in time as a method of prediction.
Ben Shalom Bernanke: December 13, 1953 time unknown Augusta, GA
Federal Reserve Act Signed by President Wilson: December 23, 1913 6:02 PM EST Washington, DC
USA: July 4, 1776 5:10 PM LMT Philadelphia, PA