WallStreetWeather.net Forecast For Week Of November 30, 2009

Summary Of Last Week’s Influences:
The Dow made a fresh 2009 closing high on Wednesday (10, 464.40), after it and the other major indices made their biggest moves on Monday.

Venus squaring Jupiter can exaggerate financial conditions in either direction. Venus square Jupiter Monday brought the bulls back on the “risk trade” after St. Louis Fed president James Bullard said in a Dow Jones interview Sunday that the Fed should continue “at a very low level” to buy MBS beyond the end of March 2010. Investors perceived Bullard’s remarks as an indication that the Fed will be the last central bank to remove massive liquidity and raise interest rates, causing the dollar to have its biggest drop in two weeks.

As I wrote in the last week’s Forecast, Venus squaring Neptune Thursday caused a big shift in global currencies as the dollar rebounded after the Dubai government announced it was taking charge of Dubai World’s debt, asking creditors to let Dubai World suspend making payments tied to $60 billion in debt for six months. As I noted in the Forecast, the influence of Venus is short-lived. The dollar began to weaken again late Friday, and hit a 14 year low against the yen.

Summary Of This Week’s Influences:
“Expect the unexpected” is the mantra this week as Uranus in Pisces appears motionless in the sky, making its energy more pronounced. Uranus will station direct Tuesday after being retrograde since July 1. Volatility and greater potential for sharp and sudden price movements in either direction that can break support and resistance levels and intraday reversals are increased when Uranus is prominent. This energy likes to shake up and break up in order to breakthrough to a new way of being and doing.

Uranus rules electricity and electronic devices, creating the potential for temporary power and systems outages. The potential for earthquakes, tsunamis, and extreme weather conditions that can create travel cancellations, delays, and accidents is greater now.

Mercury and Gemini represent communication and movement. Mercury squaring Uranus Monday and the Full Moon in Gemini Wednesday can bring an overload of information and rapidly changing news events that shock and surprise.

Mercury represents legislation and Uranus reform. On Monday the Senate will begin debate on the healthcare bill. With the Moon in stubborn Taurus and Mercury in Sagittarius squaring Uranus, Senators may spend the first day airing their most extreme ideological viewpoints before the dynamics start to change. From December 1-19 all of the planets will be in direct motion which should help the bill move forward.

Venus and Taurus rule money and banking, and the Moon rules real estate and consumers. The Treasury is expected to announce Monday it is escalating the government’s efforts to pressure financial institutions and mortgage servicers to increase the rate of loan modifications on residential mortgages. The low number of modifications is a message to the markets that a new wave of foreclosures will be arriving, driving up inventories and driving down home prices, reflected by Saturn squaring Pluto. The Treasury is also changing the rules of the $75 billion program funded by the TARP. Companies will have to permanently modify a mortgage before receiving payment from the Treasury for the modification, as none of the lenders have made their modifications permanent.

As Uranus turns direct opposite his natal Mars, President Obama will address the nation Tuesday evening to outline his strategy for Afghanistan. Mars rules military matters. With his natal Mars in Virgo, President Obama required a high level of detail before reaching his decision. Elements of the President’s announcement are likely to surprise both parties.

Virgo rules employment. With Uranus opposite his Mars in Virgo, President Obama will host a Jobs Summit on Thursday. With the Moon in dualistic Gemini, Wall Street will also be watching Federal Reserve Chairman Ben Bernanke’s confirmation hearing by the Senate Banking Committee. It’s pretty blatant that the “independent” Federal Reserve is in full political campaign mode. Bernanke wrote an op-ed piece in today’s Washington Post, asserting his actions as Fed Chairman “played a major part in arresting the crisis” “that could have rivaled the Great Depression in length and severity,” if not for the fact that he spent his career studying the Depression. And now Bernanke is depressing us all.

Monday, November 30, 2009
Volatile; large moves that swing in either or both directions. Mercury square Uranus tends to be a bullish influence despite the urge to book profits.

Mercury in Sagittarius squaring Uranus can create sharp currency swings and reversals over foreign news events such as Dubai World. Mercury square Uranus can bring news of scientific/technical breakthroughs and innovations.

Tuesday, December 1, 2009
Volatile; Choppy/mixed to negative.

Wednesday, December 2, 2009
Positive but weakens in the mid afternoon.

Thursday, December 3, 2009
Negative, but could be choppy to positive for a time in the afternoon before turning down again.
A favorable influence between Venus and Saturn in Libra can forge equitable financial and legal arrangements.

Friday, December 4, 2009
Negative. A worse than expected employment report renews concerns about the health of the consumer.

Is Dubai World the “Lehman of the Middle East”?

Published by WallStreetWeather.net

The announcement late Wednesday that government-owned conglomerate Dubai World will ask creditors for a “standstill” in making payments tied to $60 billion in debt for six months has sent shockwaves across the globe over the potential of a sovereign debt default in what has already been dubbed the “Lehman of the Middle East.”

Even though Dubai’s real estate boom and bust is old news, investors assumed the government would not allow Dubai World’s debt repayments to be delayed. But what really caused global markets to come undone was the fact that Dubai World’s woes serve as a wakeup call that sovereign debt still carries risk, as governments can be unpredictable in their support. This has only been exacerbated as central bank policy accommodation and government stimulus have enabled another asset bubble to rise from the financial crisis.

Dubai is one of seven emirates that comprise the federation of United Arab Emirates (UAE) which came into being at Noon in Dubai on December 2, 1971. With the Sun, Jupiter, and Neptune in the global sign Sagittarius, most of the UAE’s wealth derives from oil and natural gas exports. During the years of Pluto in Jupiter-ruled Sagittarius (1995-2008), the UAE and particularly Dubai sought to expand and transform their economies through diversifying into real estate, tourism, trade, and financial services.

Unlike its wealthy neighbor Abu Dhabi, less than 6% of Dubai’s revenues stem from oil and natural gas. Dubai became the Miami of the Middle East, turning sandbars into Palm Islands. Foreign developed resorts such as the Atlantis Dubai sprang up, and Donald Trump partnered with Dubai World’s Nakheel property subsidiary for a piece of the action.

Neptune and Pisces rule oil as well as dreams and fantasy. Mars in Pisces squaring the Moon (real estate) in Gemini and the Neptune/Sun/Jupiter lineup in Sagittarius describes the multiple faux fantasy islands, theme parks, and shopping malls that are part of Dubai. Mars likes to be ahead of the competition, and at 2,184 feet, the Burj Dubai will be the tallest building in the world when it opens in 2010. This planetary pattern in the UAE chart also explains the overambitious development plans and the inflated expectations that the UAE’s other industries would expand even more rapidly than the oil flowed.

But Dubai and the UAE haven’t been immune from the real estate bust. Just like Miami, Dubai’s boom was fueled by speculators. The fallout from the housing bubble has left Dubai in even worse shape than Florida or even Las Vegas. According to Deutsche Bank, prices in Dubai have dropped 50% from their peak in 2008. Saturn and Capricorn rule these modern mountains; Pluto in Capricorn represents the mountains of debt issued to build them all that is beginning to come due.

Saturn in Libra squaring Pluto in Capricorn reflects Dubai’s World desire to freeze time (Saturn) in order to work out new financial arrangements (Libra) with the debt holders (Pluto). According to S&P, about half of the estimated $80-$90 billion in total estimated Dubai debt is related to Dubai World and its entities.

Dubai’s debt problems are not going to go away anytime soon as Saturn and Pluto are challenging the UAE’s chart’s Venus in Capricorn and Pluto in Venus-ruled Libra throughout 2010. Venus rules money and assets. Saturn and Pluto challenging the UAE chart’s Venus and Pluto depresses asset values and would not bode well if Dubai World has to start selling its properties in Dubai and around the world to raise cash to repay the debt on time. Venus rules the sector of the UAE chart representing neighbors. Saturn in Gemini here opposing the UAE’s Sun/Jupiter/Neptune in Sagittarius indicates that the federation’s wealth, reputation, and newfound status as a financial center in the Middle East are in jeopardy if Abu Dhabi fails to help out its neighbor Dubai.

The lesson of Saturn square Pluto is that there are no quick, short term fixes where debt is concerned. Saturn is about taking responsibility and meeting obligations, and Pluto will force the changes needed to take place regardless of how financially painful it might be. There’s been a big asset bubble in emerging markets this year, and now the market is worried about the possibility that countries such as Brazil, Bulgaria, Greece, Hungary, Mexico, Turkey, and Russia could have trouble honoring their debts. Uranus will oppose Saturn and square Pluto in 2010, creating a lot of shocks and surprises surrounding all types of debt. Saturn and Uranus squaring the UAE chart’s Mercury in Sagittarius in 2010 to early 2011 could indicate that federation members such as Dubai will have trouble meeting and will end up breaking certain contractual agreements and obligations. Court cases are likely to follow.

Saturn, Uranus, and Pluto will be forming exact alignments to one another in January, April, and July/August 2010. These alignments affect the whole world, and are even more pronounced in countries where these planets are affecting natal planets in the nation’s chart, such as the UAE. Since Saturn formed its first exact square to Pluto November 16, the cost of credit default swaps against sovereign debt and financial firms has risen. Even the cost of CDS to insure US government debt has risen as Saturn, Uranus, and Pluto is challenging the USA chart’s sector that represents its reputation, and natal Venus and Jupiter in Cancer in 2010. The US and the dollar are still considered a safe haven in times of financial distress, but the US is on its own collision course unless monetary policy is tightened and excess liquidity and stimulus programs are cut, along with efforts to control the federal deficit.

The influence of Venus in Pluto-ruled Scorpio squaring Neptune in Uranus-ruled Aquarius influencing the markets last Wednesday through Friday describes the “shockwaves” and confusion that arose after Dubai’s request for a “standstill” in Dubai World’s debt since a $3.5 billion bond issued by Nakheel matures on December 14. (Wednesday morning the bond was trading at 110 cents on the dollar; by Friday its value had dropped to 57 cents on the dollar.) The Moon in Neptune-ruled Pisces squaring Mercury in Sagittarius reflects the lack of concrete information from the Dubai government as the nation observes the religious holiday of Eid-al-Adha until Monday. Venus squaring Neptune reflects that it is unclear what Dubai World’s assets are really worth, along with the belief that Dubai’s debt is ultimately backed up by the UAE’s oil.

Although $80 billion in debt is not in and of itself going to trigger a global systemic crisis, from a planetary perspective calling Dubai World the “Lehman of the Middle East” is relative since the energy of Uranus is more pronounced now through December 4 as from Earth’s vantage point Uranus appears to be motionless in the sky as it turns direct after being retrograde since July 1.

Uranus in Pisces will turn direct on December 1 at the same place it turned stationary retrograde on June 26, 2008. Uranus represents sudden and sharp price movements and Pisces rules oil. Oil hit a record closing high of $145.29 a barrel on July 3. (When Uranus turned direct on November 27, 2008, oil had dropped to $54.44 a barrel.) The euro made an intraday record high against the dollar on July 15, 2008 at $1.6040.

Oil, gold, and most commodities are on a tear just as they were in the first half of 2008. Pisces rules credit, and as fears grew that the credit crisis was deepening in 2008, oil and other commodities began to sharply sell off as institutional investors had to sell their most profitable positions to raise cash. The news about Dubai World created a similar effect as investors sold oil, gold, and other commodities that had been on a tear again this year. Oil closed down 2.4% to $76.05 after dropping to $72.39 intraday Friday. The dollar briefly rallied against the euro and other major currencies after being at its lowest level against the euro since last July.

Lehman Brothers filed for bankruptcy on September 15, 2008, the day the Full Moon in Pisces fell on the exact degree that Uranus went retrograde on June 26, 2008. Uranus turning direct now on the same degree re-activates the themes from that time. For example, Federal Reserve Chairman Ben Bernanke’s confirmation hearing occurs on December 3, and he will be questioned about his handling of Lehman, Bank of America’s acquisition of Merrill Lynch, and AIG.

The Full Moon in Gemini occurring at the time Uranus turns direct December 1 will bring more information to light about Dubai World since the Full Moon exactly conjoins the UAE chart’s Moon in the sector ruling real estate and opposes the UAE’s natal Sun (the federation’s leaders). The Gemini Full Moon conjoins the USA’s natal Uranus while Uranus turning direct challenges the USA Mars and Neptune. There will be some unexpected surprises regarding healthcare reform and President Obama’s military strategy for Afghanistan that he is scheduled to explain to the nation on December 1.

While it may be true that US banks have minimal exposure to Dubai and the UAE, there could be other financial connectivity to Dubai World such as through hedge funds and other investment vehicles that is enough exposure to cause the stock market to be concerned and correct.

With Uranus we have to “expect the unexpected.” One thing that is predictable about Uranus is that this energy likes to operate in extremes. Volatility has returned to the markets.

Note: Background information in this post comes from Bloomberg, the Financial Times, and The Wall Street Journal. (The links go directly to their sections on Dubai.)

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

Bernanke’s Confirmation “Not Necessarily” A Done Deal

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

No disclosures.

WallStreetWeather.net Forecast For Week Of November 22, 2009

“I don’t know what’s going on in the market right now because it makes no sense to me. There’s no root in fundamentals.” – Meredith Whitney

Summary Of Last Week’s Influences:
The indices exhibited their strongest performance early in the week before turning negative. The stock market had its best day on Monday after the Asia-Pacific summit (APEC) concluded its meeting over the weekend with a communiqué supporting continued economic stimulus measures, making no mention of the weakened U.S. dollar.

The market reacted with the same enthusiasm it exhibited the prior Monday after a meeting of the G20 finance ministers. Just like then, markets viewed APECs communiqué as a green light to sell U.S. dollars to finance purchases of stocks and riskier investments in commodities and emerging markets. (I’ve made a mental note to myself to study the communiqués from these financial gatherings as there’s no point in looking at the planetary influences for the Monday following these meetings unless there's been a change to previous communiqués.)

The dollar index made a 15 month low against a basket of major currencies Monday, ignoring Federal Reserve Chairman Ben Bernanke’s speech to the Economic Club of New York that monetary policy “will help ensure that the dollar is strong and a source of global financial stability.” Bernanke essentially told the markets to party on when he told the audience “it’s not obvious to me in any case that there’s any large misalignments currently in the U.S. financial system” between asset prices and their fundamental value.

Meredith Whitney’s remarks on CNBC Monday afternoon certainly described the planetary influences of the New Moon in Pluto-ruled Scorpio (debt/mortgages) challenging Neptune (credit; bubbles), and Saturn (fundamentals; government) square Pluto. Whitney was at the Bernanke luncheon and was disappointed that he did not discuss the Fed’s exit strategy. The Fed has committed to purchase up to $1.25 trillion of agency mortgage backed securities, wasting taxpayer dollars by purchasing them from the big investment banks (Goldman, JPMorgan, etc.) who buy the MBS directly from Fannie Mae (FNM) and Freddie Mac (FRE) and then sell them at a profit to the Fed when the Fed could purchase them directly. With mortgage rates having nowhere to go but up, the Fed as the primary purchaser of mortgage securities is going to be stuck with these low interest mortgages for a long time.

Reflecting the influence of Saturn square Pluto, Whitney said she “hasn’t been this bearish in a year” because stocks have “no fundamental rooting, particularly the consumer sector.” With $1.5 trillion in credit card lines pulled, credit contraction is higher than it was during the Great Depression. Combined with high unemployment, Whitney is as amazed as I am that the market is optimistic about retail stocks and holiday retail sales. This is just another example of the Fed's excess liquidity going into all stocks in all sectors that Bernanke won't acknowledge as being in an asset bubble detached from fundamentals.

The New Moon in Scorpio together with the strong Pluto influence brings issues that have been hidden or ignored back into our consciousness. The markets began to drop later in the week on the news that weekly mortgage purchase applications fell to a twelve year (one Jupiter cycle) low during the prior week. Saturn rules time and its square to Pluto reflects that 12.4% of mortgages are now 30+ days overdue making payments. The Mortgage Bankers Association also reported that more than 1 in 7 borrowers in the third quarter were behind on their mortgage payments, and one third of all foreclosures began in the third quarter were on properties where the borrowers have fixed rate prime loans. The government and the Fed don’t want to face the harsh reality that home prices will continue to fall regardless of their purchase programs and wasteful spending on programs such as the homebuyer tax credit. Employment will increase before home prices ever come anywhere close to what they were selling for during the boom. And part of the reason is that millions of properties are not desirable anymore and/or they are located in areas that no buyer would consider today because they were purchased for speculation.

As financial markets became more fearful (Saturn) about all this debt (Pluto), the dollar gained strength and stocks declined. On Thursday the three month Treasury bill maturing in January briefly turned negative for the first time since the financial crisis began, before closing at 0.01%. Despite these ridiculously insane interest rates, banks and institutional investors buy them up for window dressing.

Saturn square Pluto describes the financial reform legislation going through Congress that would impose tighter controls over the banks and also eliminate the Federal Reserve’s power to control consumer finance and even its ability to supervise banks. Saturn square Pluto reflects the imbalance that exists in the economy where the government and the Fed’s efforts to improve the economy have resulted in record profits for Wall St. and a bubble in stocks and commodities, while much of the nation experiences numerous economic challenges. These energies demand accountability and fairness from the leaders in charge of the financial system. Treasury Secretary Geithner was asked if he would resign during a hearing by the Joint Economic Committee Thursday, and with Saturn and Pluto affecting the Fed’s Sun (the Chairman), Bernanke’s confirmation by the Senate to a second term as Fed Chairman is no longer a sure thing.

Summary Of This Week’s Influences:
The Sun entered Sagittarius late Saturday evening until December 21. Sagittarius is ruled by Jupiter, the planetary energy of expansion and abundance. Thursdays are ruled by Jupiter and the fourth Thursday of November every year is when the U.S. celebrates Thanksgiving Day as a time for our Jupiter-ruled Sagittarius rising* nation to give thanks for all of our blessings beyond the bounty of a holiday dinner.

Money/values, debt, credit and socializing are the themes during this abbreviated holiday week as Venus in Scorpio squares Jupiter (Monday) and Neptune (Thursday), and makes a harmonious alignment to Uranus Wednesday. Market volume has been very light since the beginning of November, and this week volume should be exceptionally low.

Mercury challenging Jupiter on November 9 resulted in the biggest move in the indices that week, and Venus challenging Jupiter Monday is likely to do the same. The influence of Mercury and Venus is brief. Mercury challenging Neptune November 11 brought a shift in global currencies as the dollar slightly rebounded then, and Venus aspecting Neptune (exact Thursday) can have a similar influence on currencies.

With the Moon (emotional outlook) in Neptune-ruled** Pisces harmonizing with Venus, and Mercury in Sagittarius harmonizing with Mars in Leo Thursday, holiday gatherings could be particularly animated. With Venus challenging Neptune, guard against impulse purchases and addictive behaviors. Take extra precautions with financial information and scrutinize all financial transactions (especially credit card transactions), as this aspect can increase the potential for fraudulent activities.

From socializing and relaxing activities, the Moon shifts into Aries at 10:17 PM Thursday night until 6:33 PM Saturday. Now it’s a race to get the online deals and devise a military style strategy for Black Friday shopping. Be cautious driving and have a sense of humor, especially early Friday morning as hardcore shoppers could be doing the Daytona 500 to reach the door busters. People tend to be more competitive and have a “me first” attitude.

I wish all Wall Street Weather readers a Happy Thanksgiving holiday!

Monday, November 23, 2009
Negative.

Tuesday, November 24, 2009
Moderately down, becomes choppy/mixed and turns positive going into the close.

Wednesday, November 25, 2009
Positive.

Thursday, November 26, 2009
Markets closed for Thanksgiving holiday.

Friday, November 27, 2009
Weakest early; improves as the day progresses. (Stock market closes at 1:00 PM.)

*The rising sign (Ascendant) is the zodiac sign rising on the eastern horizon of the USA chart for 5:10 PM on July 4, 1776 in Philadelphia, PA.

**Jupiter ruled Pisces before Neptune was discovered in 1846.

No disclosures.

If Geithner Goes, So Must Bernanke

Published by WallStreetWeather.net
There has become an increasing clamor that has reached a fervent pitch this week as a handful of Republicans and Democrats are calling for Treasury Secretary Timothy Geithner to resign.

Yesterday Rep. Peter DeFazio (D-OR) called on Geithner to resign. Testifying today before a Joint Economic Committee hearing on financial regulatory reform, Geithner was verbally assaulted by Rep. Kevin Brady (R-TX), who accused Geithner of being responsible for every economic woe plaguing America today. Geithner stood his ground while trying to keep his temper under control, pointing out that the Obama Administration for the most part is dealing with the fallout from the excess spending and economic policies of the last eight years.

I did not think Timothy Geithner was qualified to be Treasury Secretary, nor did I think National Economic Council Director Lawrence Summers deserved to have a key role in the Obama Administration either since both contributed to the laissez faire policies that precipitated the financial crisis. As I’ve written so many times, you can’t solve the problem with the same policies and people who contributed the problem! Besides, it did not resonate with President Obama’s campaign of “change we can believe in.” However, to have members of Congress speak in such a disrespectful manner to a Treasury Secretary shows that there is a deeper problem that goes beyond the nation’s economic ailments. And from a geopolitical perspective, it shows that certain members of Congress are putting their own political interests before the nation’s best interests as they have failed to consider the impact their melodramatic displays of immaturity have on our economic relations with other countries.

The Treasury Secretary was correct in responding to Rep. Brady that his perception was not “fair and accurate.” To blame Geithner for every economic ill is ludicrous and the politicians attacking him know it. No one person – Republican or Democrat – could turn the economy around after such a deep financial crisis that had been building for years, in a short amount of time.

What we have today is politicians taking a cue from “reality TV,” trying to be ever more outrageous. And the media is only too happy to oblige. Not only is there no sense of bipartisanship in Congress, but certain Democrats have no compunction trying to take down their own party and President. The planetary influences of Saturn in Virgo opposing Uranus, Jupiter conjoining Neptune in Aquarius, and now Saturn squaring Pluto this year have resulted in politicians and faux grassroots organizations such as FreedomWorks,* who prize destruction over creation. Their purpose is to maintain and profit from a corrupt status quo, using extreme ideological beliefs and tactics to try to create an atmosphere of overblown hysteria.

Monday’s Scorpio New Moon squaring Jupiter and Neptune formed stressful alignments to Geithner’s Sun and Uranus in fiery Leo, attacking his performance as Treasury Secretary out of proportion. Jupiter and Neptune will continue to affect Geithner’s Sun/Uranus through early 2010, raising opposition over ethical (Jupiter) concerns that Geithner since his days as president of the New York Federal Reserve, has been too close to Wall St. Neptune opposing his Sun reflects that Geithner has failed to present a clear and accurate accounting of why AIG’s counterparties were paid in full and how the Bush and Obama Administrations determined which companies lived and which ones died. The influence of Saturn squaring Pluto during the Pluto-ruled Scorpio New Moon is to dig deep below the surface to uncover the secrets that the government and other powerful and influential people are attempting to keep from us in order to advance their own agenda.

Rep. Brady aptly described Saturn conjoining Geithner’s Mars in Libra when he told Geithner at the hearing that “you have to be responsible for your decisions.” But if Geithner is forced to resign, then Rep. Brady, DeFazio and the other members of Congress who agree with them should be demanding that Ben Bernanke resign too. As the head of the Federal Reserve, Bernanke was Geithner’s boss. As a member of the Fed Board of Governors, Bernanke encouraged Fed Chairman Alan Greenspan to keep rates too low for too long, creating the housing bubble. A Republican, Bernanke was also Chairman of President Bush’s Council of Economic Advisors prior to President Bush appointing him Fed Chairman. And now Bernanke’s policy of zero interest rates and excess liquidity has spawned yet another bubble that will burst, creating yet another financial crisis.

If these politicians are truly concerned about the state of our economy, they will ensure the Senate votes against reappointing Ben Bernanke Fed Chairman.

*Steve Forbes is a director and so is Richard J. Stephenson, the head of Cancer Treatment Centers of America. Former U.S. House Majority Leader and corporate lobbyist Dick Armey is Chairman of FreedomWorks.

Vytorin, Mammograms, and the Fight for Unnecessary Medicine

Published by WallStreetWeather.net
"How is it possible for a drug to have $4 billion in sales without any evidence of benefit?" -Harlan Krumholz, a cardiologist at Yale University on Merck’s Zetia.

Once again a study comparing Merck’s (MRK) cholesterol drug Zetia, this time to Abbott Labs’ (ABT) Niaspan, has demonstrated that Zetia failed to reduce arterial plaque buildup. And like previous studies, more participants experienced a cardiovascular event ranging from heart attack, heart surgery, or death from heart problems from taking Zetia.

Merck disputed the results of the study funded by Abbott Labs presented Sunday night at the American Heart Association conference in Orlando, calling the trial “scientifically inadequate.” Abbott’s Niaspan is a proprietary extended-release version of niacin (vitamin B3) that unlike the vitamin doesn’t cause the severe facial flushing that result when niacin is taken at doses large enough to raise HDL (“good”) cholesterol.

Merck keeps reminding everyone that Zetia and its other cholesterol drug Vytorin (a combination of Zetia and Zocor), lowers LDL (“bad”) cholesterol. Zetia and Vytorin may lower LDL cholesterol, but what is more important: lowering a person’s LDL cholesterol number or improving the clinical outcome of reduced cardiac events? This is like choosing the football player that gains the most yards but suffers the most fumbles. The goal line is to reduce cardiac events, not simply to improve your stats. This certainly gives a whole new meaning to “getting to goal.”

Since all cholesterol drugs carry serious side effects, it is critical that government funded non-industry connected research determine which treatments are most effective at reducing/preventing cardiovascular events for the lowest cost.

You would think that the American Heart Association (AHA) would share this objective, but as this table shows, their loyalties are to the pharmaceutical and medical device industry, especially to the companies who contribute the most money to the AHA. AHA spokesman and former president Robert Eckel said the organization’s stance is that “there is no evidence the drug does harm,” and he “sees no reasoning to be concerned about using Zetia for LDL lowering.” I wonder if the AHA’s opinion has anything to do with the fact that after acquiring Schering-Plough, Merck has overtaken Pfizer (PFE) as the number one pharma contributor to the AHA.

The Sun rules the heart and the Moon rules the breasts. Yesterday’s New Moon in Scorpio squaring Jupiter and Neptune in Aquarius uncovered intense emotional reactions to the revelations of ineffective diagnostics and pharmaceuticals.

Saturn in Libra challenging Pluto in Capricorn reflects that even if Congress fails to pass healthcare reform, medical spending cannot continue on its current trajectory. Saturn restricts, and Saturn in Libra will force the government to decide what treatments provide the biggest benefit at the lowest cost that would fairly benefit the greatest number of people. At first the government will try to negotiate with providers but in the end the government will be forced to take charge and dictate what treatments it will pay for at what cost. Pluto rules insurance, and health insurance companies will negotiate harder with providers and end up following government recommended guidelines even without healthcare reform if they want to survive. Saturn and Capricorn relate to elderly people and Pluto rules reproduction and death. Saturn challenging Pluto means that hard choices have to be made as healthcare in America will be transformed no matter what.

Jupiter represents ideological and religious beliefs and Neptune rules drugs, charities, and brainwashing. Saturn and Pluto represent the powerful corporate interests that fund these consumer friendly sounding charitable organizations. These special interests have done a brilliant job of deluding and manipulating the public into believing that the best healthcare consists of spending the most money on the most tests and treatments.

Nowhere do all the special interests intersect more than the breast cancer industrial complex. This mega industry consists of oncologists, radiologists, imaging equipment makers, surgeons, drugs, etc. along with all these organizations with their pink ribbons that are not only funded by the medical industry, but all the other companies pushing food to cosmetics to apparel and pink toasters. Neptune rules glamour and with a little help from Hollywood, breast cancer has become a big, glamorous business.

Yesterday the U.S. Preventive Services Task Force published guidelines in the Annals of Internal Medicine that it is unnecessary for women to get annual mammograms starting at age 40 (the new recommendation is every other year for age 50-74; no recommendation for 75+). The new guidelines also advise doctors to abstain from teaching women how to perform breast self exams due to lack of evidence. The media (who receives their own largesse from industry participants) are reporting a backlash has erupted over the guidelines. Neptune is about the art of illusion and all the brainwashing that has made many women feel like they’re “victims” even though current mammogram guidelines show no more effectiveness than the new reduced guidelines.

Yesterday’s news about Zetia and mammograms reflects the difficulty in trying to change the business of medicine where practitioners and equipment providers have a vested interest. Overuse of medicine is so inbred in our society that any attempts at usage reduction are meeting with strong consumer objections even when overuse is detrimental to the health of these consumers. Yet people continue to take a costly cholesterol drug that does not prevent heart disease and are willing to subject themselves to so much radiation exposure from getting so many mammograms that they develop breast cancer from it.

Neptune ruling the Scorpio New Moon chart* and Uranus in Pisces conjoining the chart’s Ascendant,** should shock the nation into waking up to how healthcare in America has been hijacked by corporate and “charitable” interests who are doing nothing but bankrupting our bodies and our bank accounts. We need healthcare reform so every American has health insurance. However, that does not mean Americans are entitled to every test and treatment available regardless whether it has been shown to be effective unless a person is willing to pay for such treatments 100% out of pocket.

The Sun is our physical vitality and it rules the sector of the Scorpio New Moon chart representing healthcare. The Sun rules Leo, and Mars in Leo conjoining the health sector shows this is where we need to focus our energy by taking charge of our own health.

Mars rules inflammation which weakens the immune system, potentially setting the stage for a cardiovascular event or cancer cells to multiply and attach themselves to a breast. (The Moon and the sign Cancer the crab rule the breasts. Just like the crab, cancer tenaciously attaches its claws to body tissue, spreading them to expand its home base.***)

Saturn challenging Pluto is about taking responsibility and control over your body and not allowing yourself to be manipulated by the medical industrial complex. The key to maintaining good health is to have a strong immune system. Here are some simple and inexpensive steps that everyone can take to do this:

Eliminate all processed foods and drink. Cancer feeds on sugar (this is why you intake a sugar solution before undergoing a PET scan so the cancerous tissue can be seen).

Cutting out coffee and caffeinated tea will lower your blood pressure.

Drink lots of water.

If you eat meat, buy grass fed beef.

Exercise regularly and incorporate as much walking as possible into your daily schedule; soak up a bit of Sun each day.

Keep to a regular schedule getting up and going to sleep each day.

Set aside time each day for relaxation and/or meditation to reduce stress.

With the Sun, Moon, Mercury and Venus in Scorpio in the sector of the New Moon chart that is Scorpio’s natural domain, we have the power to transform our bodies (Sun) through the power of our mind (Mercury) by eating unprocessed food and drink (Moon). And in the process we’ll become more attractive (Venus) to ourselves and to others.

*November 16, 2009 2:14 PM EST Washington, DC

**The Ascendant is the zodiac sign rising on the eastern horizon at the time of the New Moon.

***This does not imply that people who have the Sun and other planets in Cancer will develop cancer.

No disclosures.

Bernanke’s Dual Mandate: Window Dressing Wall St & Getting Reappointed Fed Chairman

Published by WallStreetWeather.net
“It is inherently extraordinarily difficult to know whether an asset’s price is in line with its fundamental value. It’s not obvious to me in any case that there’s any large misalignments currently in the U.S. financial system.” – Federal Reserve Chairman Ben Bernanke

The Federal Reserve has a dual mandate, and it’s not price stability and maximum employment. Those are mandates imposed by Congress, and the Fed relishes their independence. But the dual mandate certainly provides a good cover for Bernanke's dual mandate of maximum profits for Wall St. and remaining in power.

Ben Bernanke saw his predecessor Alan Greenspan hailed as a hero while Fed Chairman, only to see the Maestro’s stellar reputation soiled after the credit bubble burst. As the panic slipped into “Depression 2.0,” and as a scholar of the Great Depression, Bernanke knew that he needed to make some bold moves by pulling out all the tools studied back at Princeton’s bubble lab. If the Great Depression lasted longer than it should have because the Fed tightened monetary policy too soon, Bernanke figured that doing the exact opposite would likely pay off and brand him in the history books as an economic hero.

Dropping interest rates down to zero and opening the floodgates of liquidity was Bernanke’s form of window dressing that has allowed Wall St. banks to recapitalize and pass the stress test. A new asset price bubble began rapidly growing in stocks, commodities, bonds, and emerging markets using the dollar as a carry trade. Neptune rules bubbles and inflation. With the Sun squaring Neptune, Bernanke had to assure the audience after giving a speech at the Economic Club of New York today that “supervisory and regulatory methods to restrain undue risk-taking” would ensure “the system is resilient in case an asset price bubble bursts in the future.”

Ever since President Obama announced on August 25 that he was nominating Bernanke to a second term as Chairman, the Fed has stepped up its efforts to emphasize that interest rates would be kept at virtually zero “for an extended period of time” in order to fulfill the dual mandate and persuade investors to continue buying riskier investments in order to obtain higher yield. Just as Bernanke sees no need to raise interest rates sooner in order to support the dollar, he can’t acknowledge that asset prices have formed a bubble. And the Fed Chairman sees no cause for alarm in the falling dollar and therefore no need to support the dollar by raising interest rates now. To admit these things would require the Fed to prepare to contract liquidity which is something he would not want to do at least until after the Senate approves his reappointment as Chairman.

Saturn in Libra is exactly squaring Pluto in Capricorn, affecting the Sun (identity/purpose; the Chairman), Pluto (power/hidden agendas), and Midheaven (sector of reputation) in the Fed’s chart. Even The New York Times today acknowledges “the conflicting goals that Fed officials may have to balance” to bridge the gaping hole between the artificially inflated economy on Wall St. and the harsher economic reality on Main St.

Saturn rules government. Saturn’s square to secretive Pluto coincided with the release of the Special Inspector General for the TARP’s audit that probed beneath the surface to reveal that Bernanke and the NY Fed then headed by Treasury Secretary Timothy Geithner, “refused to use their considerable leverage” to negotiate a reduced payout to AIG’s counterparties, costing US taxpayers billions of dollars. And for all of Bernanke’s talk of transparency, the SIGTARP report critized the Fed’s lame excuses for refusing to reveal the names of AIG’s counterparties.

Saturn and Pluto impacting the Fed’s chart indicate that Bernanke’s dual mandate is going to face tremendous headwinds as these planetary energies demand that structural changes be made that bring monetary policy back into balance by transforming the Fed’s purpose and power. Clearly Ben Bernanke has demonstrated that he is not up to the task as our economy requires a new foundation that will foster long term sustainable growth.

WallStreetWeather.net Forecast For Week Of November 15, 2009

Summary Of Last Week’s Influences:
The Dow and the S&P reached new highs last week, fueled by the belief that the flow of easy money will support a global recovery.

Markets began last week in full bull mode as the Sun (speculation) challenged Jupiter (optimism; foreign markets) early last week. Traders got the green light to carry on with the dollar carry trade after G20 finance ministers last weekend reiterated their support of continued economic stimulus, with Treasury Secretary Geithner and Prime Minister Brown warning against ending stimulus measures prematurely. Although the IMF issued a report to coincide with the meeting, acknowledging that the Fed’s zero interest rate policy has caused traders to borrow dollars (instead of Yen) to buy assets in other currencies providing higher yield, the IMF report said the dollar is still strong. Adding fuel to the market’s enthusiasm were speeches made by several Federal Reserve bank presidents that continued to emphasize the Fed isn’t likely to budge on raising rates anytime soon.

As mentioned in last week’s Forecast , currency shifts took place last Wednesday as the dollar hit a 15 month low against a basket of the world’s major currencies before regaining some strength. The governments of Thailand, South Korea, Russia, and the Philippines had to purchase dollars to hold down the value of their currencies. As Mercury challenged Neptune, it was unclear what effect if any China’s announcement that it would take major currency trends into account would have on the value of the Yuan that is pegged to the dollar.

Oil made big moves last week, mostly to the downside on concerns that supply far outstrips demand. Gold closed Friday at a new nominal price record high of $1,116.70, edged on by Treasury Secretary Geithner reiterating our “strong dollar policy,” stating Thursday that it is “too early” to talk of asset bubbles.

A front page story in Tuesday’s Wall Street Journal referred to the current bull run since March’s multiyear lows as a “’skeptics’ rally’ – fed by money managers who feel they must make risky bets in order to keep up with the market, but who don’t like what they see.” Interwoven throughout the article is that the immediate to short term future has a “party on” attitude that will have to seriously sober up later.

“You can’t fight the Fed” is certainly the mantra that the market has been reciting. In its role as bank regulator, the Fed’s first concern is the banks. While zero interest rates and excess liquidity are helping the banks to recapitalize and make profits big enough to pay out record bonuses, consumers are not deriving any benefit from it. The government claims it wants Americans to save money, yet savers would be hard pressed to find a savings account or less than a two year term CD that pays enough interest to cover inflation and taxes on interest income. Rates are low yet many consumers who carry a credit card balance are paying between 20-30% interest. The Fed’s effort to change overdraft rules that would require bank customers to “opt in” is a pure political play to keep its power as the rule wouldn’t kick in until July 2010.

The Fed is punishing consumers, pushing them into riskier investments in order to obtain a decent yield. This is particularly hard on seniors living on fixed incomes. This is why the Federal Reserve cannot be in charge of consumer finance and the banking system in general. There is a clear conflict of interest between what is good for consumers and what benefits the bankers. The Fed in its current incarnation has too many conflicting mandates and should only focus on price stability.

We can talk about all the many factors that lead to the financial crisis in the first place, but the bottom line is that all roads lead back to the Fed and Ben Bernanke who served on the Board of Governors under Greenspan’s Fed before he became Chairman in 2006. If monetary and regulatory policy had not been too low and too loose for too long, we wouldn’t be in such a deep and lingering financial mess. But because we apparently didn’t have enough fun the first time around, we had to keep a Fed Board and reappoint a Chairman who continues his negative feedback loop of implementing the same policies over and over again.

In a follow up to my Oct 11 Forecast, NASA confirmed that its LCROSS mission has found lots of water on the Moon. Well, duh! After all, the Moon rules water, our emotional outlook, and women. It was amusing that the news came on Friday the 13th as there are 13 Moons in a calendar year, and Fridays and the number 13 carry a strong feminine energy. Water will pave the way for humans to return to the Moon. And as far as space exploration is concerned, the lawyers are already ahead of NASA!

Summary Of This Week’s Influences:
Saturn makes the first of three challenging squares to Pluto today, the day before the New Moon in Pluto-ruled Scorpio. Saturn challenging Pluto in the waning phase of its cycle tends to dampen the desire to spend, as people are cautious and worried about their income relative to debt.

Right now the market seems to be on autopilot. Stocks and major commodities rise as the dollar falls, and fall as the dollar rises. Saturn challenging Pluto puts downward pressure on the market’s inflated expectations for markets to continue to accelerate, as reflected by the Sun challenging Neptune in Aquarius now. Even the slightest development could cause the asset bubble to burst as investors panic in a mass exodus for the exit door.

Mercury (thoughts/communications) enters Sagittarius this evening until December 5, bringing some needed cheer and humor to offset the heavy duty influences of Saturn and Pluto. Mercury makes a favorable aspect to Saturn tomorrow, helping to uncover the truth about how imbalanced the government’s arrangements with the banks really are. With the Moon (sentiment) in Sagittarius Tuesday and Wednesday, the focus is on emerging markets and trade imbalances, and growth prospects.

Venus in Pluto-ruled Scorpio challenges Mars in Leo later Wednesday/Thursday which could motivate investors to take profits. The Moon shifts into Saturn-ruled Capricorn Thursday and Friday, reinforcing Saturn/Pluto themes and exhibiting caution and concern about financial regulation and debt.

In short, it looks like the indices will be strongest Tuesday and Wednesday, with volatility increasing and sentiment turning negative Thursday and Friday.

Monday, November 16, 2009
A combination of bullish and bearish influences likely keeps the indices choppy and vacillating between negative and positive, but negative sentiment seems more prevalent.

Tuesday, November 17, 2009
Positive.

Wednesday, November 18, 2009
Market improves as day progresses; positive trend bias.

Thursday, November 19, 2009
Negative.

Friday, November 20, 2009
(Options expiration). Negative trend bias, but could stage a late day turnaround.

Saturn square Pluto 2009-2010: Time For Action!

Published by WallStreetWeather.net
For most of the time from now through next summer, Saturn in Libra is engaged in a challenging square alignment with Pluto in Capricorn. These are not easy energies to work with as circumstances force us on an individual and collective level to strip away the layers of short term quick fixes that expose the hidden rot underneath that can no longer be ignored.

Saturn represents all types of societal structures. Saturn in Libra is about bringing what is out of sync into equilibrium. Pluto in Saturn-ruled Capricorn destroys structural systems that are no longer working efficiently in order to build a solid foundation that supports steady and sustainable long term growth.

Exposing the rot will not be easy as Saturn tends to be cautious and fearful, preferring to maintain tradition and the status quo. And Pluto is highly skilled at manipulating these negative influences in order to maintain power and control over others. However, the forces of change will break through as the pressure of the square between Saturn and Pluto will become too uncomfortable not to take action.

Cardinal signs (Aries, Cancer, Libra, Capricorn) are the initiators, bringing new ideas and new ways of doing things that reverberate on a global level. As Saturn and Pluto prepare to square off for the final time next summer they will be challenged by the bold enthusiasm of Jupiter and Uranus in Aries that has the courage to act on what is feared and resisted. New economic and political policies will be born out of necessity as there is no escape from postponing making the hard choices that politicians would rather pass on.

Libra rules relationships, and the Saturn/Pluto cycle accelerates the ending of relationships that were not completely honest or on an equal footing. Other relationships will become closer and stronger after working through deep seated issues. With Pluto, these issues usually involve things we’d rather keep under cover and are reluctant to discuss with others. Debt, joint financial arrangements, sexuality/reproductive issues, and death/end of life issues are subjects that most people and society (particularly in the U.S.) are uncomfortable having an open and honest discussion about, even with family and close friends.

Saturn contracts; Venus-ruled Libra is money and Pluto is debt. It’s time to pay down/pay off debt. When you live below your means instead of spending too much and being maxed out in debt, you can weather the ups and downs of any economic cycle.

Saturn and Capricorn represent our career and public reputation. Saturn challenging Pluto is forcing millions of people who have lost their jobs to transform their professional identity. Saturn in Libra can worry too much about what other people think, but attempting to keep up appearances leads to desperation. Taking personal responsibility (Saturn) for our actions and not worrying about what other people are doing (Libra), represents the real power (Pluto) and lesson learned (Capricorn) in the journey of life.

Saturn and Capricorn rule history. In order to fully understand where we are now, we have to go back to the beginning of the cycle when Saturn in Libra and conjoined Pluto in 1982. The “special relationship” between the US and the UK was at its zenith then when “political soul mates”* President Reagan and Prime Minister Thatcher were in power.

Saturn conjoining Pluto marked the beginning of a new economic cycle, akin to a New Moon. Pluto rules taxes. With Libra ruling the career/public reputation sector of his chart, Reagan used charm and diplomacy to pass his tax cut overhaul through a Democratic Congress.

Saturn rules government and Pluto nuclear power. By the time Saturn in Leo challenged Pluto in Scorpio in 1993-4, the Soviet empire had collapsed. The economy continued to grow until the bubble popped as we approached the “Full Moon” of Saturn opposite Pluto in 2001-2.

Saturn/Pluto tends to be a conservative political influence, and like the Moon decreasing in light, the waning Saturn/Pluto cycle ushered in a new era of political conservatism in America that placed social conservatism far above fiscal conservatism. President George W. Bush saying “you’re either with us or against us” conveyed far more than the US vs. the war on terrorism. Debt rose as spending was unrestrained.

And now we’re here in the waning square of Saturn and Pluto before a new cycle begins in January 2020. All the issues that weren’t dealt correctly earlier in the cycle such as financial regulation, debt, taxes, healthcare, global power, and nuclear issues, are back and must be addressed between now and early fall 2010. A recent Wall Street Journal “Ahead of the Tape” column succinctly outlines the economic differences between the early 1980s and today.

It is appropriate that the first time Saturn challenges Pluto will be the day before the November 16, 2009 New Moon in Scorpio. This is the “dark time” of the month, and with the Sun, Moon, Mercury, and Venus in Scorpio, there is a lot to process and uncover. Saturn and Pluto affect the Federal Reserve chart’s Sun (the Chairman), Pluto and Midheaven (reputation). Two financial regulatory reform proposals in Congress will alter the Fed’s power (Pluto) in one form or another; both will remove the Fed’s responsibility to control consumer banking (Saturn in Libra). Ben Bernanke’s term as Chairman expires January 31 (see below). He faces a contentious reappointment hearing by the Senate Banking Committee chaired by Christopher Dodd whose proposal would strip the Fed of its regulatory powers.

Saturn/Pluto square President Obama’s natal Venus in Cancer (which conjoins the USA natal Venus in Cancer). The President has acknowledged it is his responsibility to “rebalance” the U.S. economy (Venus) away from being a consumer-driven (Cancer) economy to one of invention and making things again, in line with Pluto in an earth sign (Capricorn). With Pluto in ambitious Capricorn, President Obama views the global economy as his responsibility to rebalance.

Saturn and Pluto’s energies are particularly strong now through February 2010. When Saturn exactly squares Pluto for the second time on January 31st, the unbridled euphoria of Jupiter and Neptune conjoining in Aquarius since the spring of 2009 will have dissolved as we begin 2010. Saturn/Pluto challenging the USA Venus and Jupiter in Cancer combined with the Sun and Venus opposite retrograde Mars in Leo, will be a time to review the actions the government and the Federal Reserve took to rescue the banking system, and how those actions have created another asset bubble in financial speculation on top of the ones that precipitated the financial crisis.

Jupiter and Uranus will challenge Saturn and Pluto during their final alignment on August 21, 2010. This is the “crisis in consciousness” phase** regarding the ideals and ideology of the Saturn/Pluto cycle to date. In the chart for Saturn challenging Pluto in the USA, the challenging alignment of Jupiter, Saturn, Uranus, and Pluto falls in the sectors of the chart representing the financial system, the stock market, and the nation’s debt/interest rates. Venus and Mars in Libra will conjoin the USA’s natal Saturn, while the USA Moon (public) conjoins Neptune in Aquarius and both oppose the Sun in Leo. The only way that Republicans can gain ground during this Saturn/Pluto cycle is if the Democrats fail to deliver on healthcare and the other promises of “change we can believe in” when they control the White House and Congress. However, the GOP claiming to be for deficit reduction but against making any hard choices and spending cuts, is not likely woo enough votes their way.

Like a drug that only masks the symptoms but doesn’t address the origin of the ailment, circumstances will cause the nation to wake up and stop pretending that the consumer based economy will return. Mercury turning retrograde in Virgo in the banking sector of the Saturn/Pluto chart reflects that banking regulations will force banks to return to back to basic banking and raising capital through deposits instead of wholesale funding.

Saturn in Libra challenging Pluto in Capricorn forces us to find new solutions that incorporate only the very best and proven solutions from the past, leaving the rest to history.

*Besides their natal Suns being in harmony, Reagan’s Jupiter exactly conjoining Thatcher’s Saturn in Scorpio reflects they shared the same conservative political philosophy. Reagan’s Libra Midheaven (career and public reputation) exactly conjoined Thatcher’s Libra Sun, enhancing each other’s reputation on the world stage. Both were very close to their spouses who they strongly relied on behind the scenes.

With her Sun in Libra challenging Pluto and Pluto-ruled Scorpio on the Ascendant (outer personality) conjoining Saturn, Lady Thatcher’s strong Libra/Saturn/Pluto energy meshed with the times. (The Ascendant is the zodiac sign rising on the eastern horizon at the time of birth. Individuals born with Scorpio on the Ascendant are ruled by Pluto and Mars. Mars rules iron and Thatcher is nicknamed the “iron lady” for her strong willed personality. Pluto’s energies were accentuated at the time Thatcher was born as from Earth’s vantage point, Pluto appeared to be stationary in the sky preparing to turn retrograde.)

**”The Lunation Cycle” by Dane Rudhyar

USA: July 4, 1776 5:10 PM LMT Philadelphia, PA
Federal Reserve: December 23, 1913 6:02 PM EST Washington, DC
Barack Obama: August 4, 1961 7:24 PM Honolulu, Hawaii
Ronald Reagan: February 6, 1911 3:43 AM CST Tampico, IL
Margaret Thatcher: October 13, 1925 9:00 AM GMT Grantham, England

WallStreetWeather.net Forecast For Week Of November 8, 2009

Summary Of Last Week’s Influences:
Due to last week’s employment report morphing into a separate post describing the longer term economic outlook, I must forego this section today.

Summary Of This Week’s Influences:
This week is light on economic reports until the end of the week. Wednesday is Veteran’s Day; the stock market will be open but the bond market will be closed. $81 billion in Treasuries will be auctioned this week, with $25 billion in 10 year notes Tuesday and $16 billion in 30 year bonds Thursday. This is the last auction of these maturities this year.

Saturn tends to move slowly and can delay. So it’s not surprising that with Saturn challenging Pluto (debt) now, that the Treasury will replace sales of its 20 year TIP with a 30 year issue beginning in February.

The Sun and Mercury are the most active planetary players, as both continue their transit in Scorpio this week. The Sun challenges Jupiter on Tuesday, which can create inflated and unrealistic expectations. There’s a tendency to be overoptimistic and over commit and overpay. Scorpio and its planetary ruler Pluto expose what has been kept hidden, and Jupiter tends to exaggerate and blow things out of proportion. With Jupiter in Aquarius this year, the “shock value” has been to the extreme.

Wednesdays are ruled by Mercury (communication/movement), and Mercury will harmonize with Uranus which is good for coming up with new ideas and new insights on existing matters. Together with Mercury challenging Neptune, it’s better to pay more intention to your intuition than hard data even though the Moon (emotional barometer) will be in Mercury-ruled Virgo. Avoid signing contractual agreements.

Saturn challenging Pluto is particularly strong right now as this alignment will become exact on November 15, one day before the Scorpio New Moon. I will be writing more about Saturn/Pluto during the week.

The combination of the Sun challenging Jupiter and Mercury challenging Neptune Tuesday/Wednesday could bring currency shifts and big moves in oil. Choppy conditions take the market downward as the week progresses when it becomes less likely the indices will be able to meet/surpass their mid-October 2009 highs.

Monday, November 9, 2009
Indices choppy/mixed to positive; strongest midday/early afternoon. Loses momentum going into the close.

Tuesday, November 10, 2009
Could see large moves in either or both directions. Negative, but improves to positive as day progresses. Weakens to close choppy/mixed with Dow faring best.

Wednesday, November 11, 2009
Choppy and volatile as morning upswing weakens and turns negative.

Thursday, November 12, 2009
Choppy/mixed to mostly positive trend bias.

Friday, November 13, 2009
Strongest early, then choppy/mixed before turning negative.

Main St. Over Wall St. by Q3 2010

Published by WallStreetWeather.net

Most economic reports last week came in better than expected, along with better than expected quarterly earnings and future guidance from companies such as Ford (F) and Cisco (CSCO). Cisco CEO John Chambers, who spoke about the coming recession in 2007, said he sees a global economic recovery underway. I suppose Warren Buffett agrees since Berkshire Hathaway (BRK.A/B) paid top dollar ($26.3 billion/$100 a share deal) Tuesday to acquire the remaining 77% of Burlington Northern (BNI) Berkshire didn’t already own instead of buying the railroad giant “when other investors are fearful.”

Although there have been companies reporting actual growth during the last quarter, once again most of the companies “beating the Street” did so through additional cost cutting measures. On an annualized basis, Q3 nonfarm productivity was the strongest since 1961. The average work week dropped to a record low of 33 hours in October. Overtime hours increased slightly as companies are handling increases in demand by stretching the workers they have, preferring to hoard cash.

The gains made by Wall St. and some of America’s largest corporations is of little comfort right now to the 15.7 million people who “officially” have lost their job since the recession “officially” began in December 2007. The “official” count of the “unofficial” unemployment rate is now 17.5%. 190,000 jobs were lost in October, propelling the unemployment rate to 10.2%. 1 in 10 Americans out of work is the highest rate of unemployment since April 1983 – the last time Saturn was in Libra.

Saturn represents contraction. Saturn in Libra in the early 1980s conjoined Pluto, which began a new cycle of business prosperity and the bull market. Saturn in Libra is challenging Pluto in Capricorn now through most of 2010. What brought the economy out of recession at the beginning of the Saturn/Pluto cycle in 1982 will not work now as we are in the ending phase of the Saturn/Pluto cycle.*

As I wrote in my Saturn in Libra post, unemployment reached a high of 10.8% in November and December 1982. By April 1983, unemployment had dropped to the level currently reported. Jupiter (expansion) conjoins Uranus (sharp/sudden moves; unexpected events) about every 12 years. Jupiter conjoining Uranus in Jupiter-ruled Sagittarius during most of 1983 reflected that the economy was growing.

On January 17, 2010, Jupiter will enter Pisces, the sign that was traditionally ruled by Jupiter until Neptune’s discovery in 1846. As the last sign of the zodiac, Pisces marks the end one cycle that plants the seeds to sprout in the new cycle. Jupiter will rapidly move through Pisces during the first half of 2010, forming harmonious alignments to the USA Venus (money/banking system), Jupiter, and Mercury (communications/transportation) in Cancer.

Saturn will re-enter Virgo April 7-July 21, 2010. Virgo rules the workforce, and Saturn in Virgo since September 2007 has accelerated the downturn in employment. Saturn will oppose Uranus in Pisces on April 26, marking the fourth time that the energies of Saturn (maintaining the status quo) vs. Uranus (reform/future direction) have been engaging in a two steps forward/one step backward dance since Election Day 2008.**

Saturn opposing Uranus together with Saturn challenging transformative Pluto (November 15, 2009, January 31 and August 21, 2010), indicate taking responsibility for the current situation by learning the lessons of the past several years as the USA experiences its Saturn return during 2010-11.*** All of these planetary energies require taking action that in the long term will create a sustainable economy instead of a band aid quick fix that serves political agendas yet only prolongs the pain.

Jupiter will conjoin Uranus June 8 and September 18, 2010, and January 4, 2011. The first alignment will occur when Jupiter and Uranus make a brief debut at the beginning of Aries, and the last two will occur at the end of Pisces. As the first sign of the zodiac, Aries is enthusiastic about taking action to start new endeavors which will help to heat up the economy, particularly in infrastructure, the electrical grid, aerospace, and completely new inventions. This will also include new forms of energy. Expect the U.S. to begin an industrial leap forward that will leave the emerging markets and Japan to copy us.

In late July 2010, Mars, Jupiter, Saturn, Uranus, and Pluto will be at the beginning of cardinal (action-oriented) signs. Although Saturn and Pluto are in a waning cycle, these planets at the beginning of cardinal signs will initiate a new direction for our economy and society. While these planetary alignments will be challenging, they also represent the courage and motivation to pioneer ahead. Employment should begin to show signs of growth by the second half of 2010.

Jupiter was last in Pisces when hedge fund Long Term Capital Management imploded. With Jupiter conjoining Uranus in Pisces in 2010, hedge funds could be the next act of the financial crisis if left unchecked. Pisces rules asset bubbles, and Jupiter in Pisces conjoining Uranus can indicate the sharp collapse of asset price bubbles. These energies also indicate that inflation is likely to spike sooner and sharper than the Federal Reserve is prepared for.

Between the bubble bursting and looming financial regulation, the irony here is that as Main St. begins to show signs of recovery, Wall St.’s profits will be waning.

*Saturn will conjoin Pluto on January 12, 2020.

**Saturn opposite Uranus: November 4, 2008, February 5 and September 15, 2009, April 26 and July 26, 2010. It’s important to keep in mind that these are long term planetary influences that are in effect before and after all the exact dates listed in this post.

***A Saturn return occurs about every 28.5 years when transiting Saturn conjoins natal Saturn. For countries as well as individuals (age 28/29, 58/59, etc.), it marks a time of testing and learning life’s lessons. Dedication, doing good work, and not living beyond one’s means tends to reap benefits at the next Saturn return.

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Federal Reserve Preparing For Higher Long Term Rates

Published by WallStreetWeather.net
When a planet gives the appearance of being stationary in the sky from Earth’s vantage point its energies are more pronounced. Neptune represents illusion, idealism, euphoria, panic, creativity, and the world of dreams. Neptune rules interest rates, inflation, bubbles, credit, oil, and fraud.

Neptune is stationary October 29 to November 10 as it changes direction from being retrograde since May 29. While Neptune themes are more likely to dominate the news during this time, Neptune's energies are particularly prominent when it turned direct November 4. From now until May 31, 2010, Neptune’s energies will be more outwardly focused.

Neptune rules fog and cloudy conditions that obscure our ability to see clearly. In the Weekly Forecast, I predicted that there would be two changes in the FOMC statement; the Fed telegraphed it was not prepared to do either one at this time.

Although the FOMC statement was basically a reiteration of the Committee’s September 23 statement, it did contain two tiny tweaks. The Fed extended the second sentence in the third paragraph that further reinforces their justification for keeping rates at record lows. Yet the Financial Times and The Wall Street Journal viewed the addition of“including low rates of resource utilization, subdued inflation trends, and stable inflation expectations” to mean that if these conditions don’t follow the Fed’s belief of “subdued inflation for quite some time,” then the Fed will have to raise rates. (Of course it’s easy for the Fed to say inflation is “subdued” when it ignores non-discretionary spending on utilities, insurance and all types of taxes in its calculations.)

The second tweak made to the statement is that the Fed will purchase “about $175 billion of agency debt” (from Fannie Mae & Freddie Mac), $25 billion less than the Fed had previously announced. The Fed said this was due to “the limited availability of agency debt.” Saturn challenging Pluto now through February reflects the Fed contracting (Saturn) their debt (Pluto) purchases the Fed previously announced it will complete through the first quarter of 2010.

In essence the Fed has signaled it intends to keep short term rates at rock bottom while allowing long term interest rates to start to drift upward. This will push bank deposit rates as close to zero as possible while increasing lending rates, allowing banks to make a bigger profit on the spread. The Fed is reiterating that now is the time to lock in a fixed rate 30 year mortgage.

Another reason why the Fed isn’t ready to announce it is preparing to tighten comes down to politics. Fed Chairman Bernanke has yet to be reconfirmed to a second term by the Senate and it is shaping up to become a cantankerous hearing. To paraphrase former Fed Chairman Alan Greenspan, politicians never ask the Fed to raise rates. Venus in Libra exactly conjoining Bernanke’s natal Mars and Neptune yesterday reflects his willingness to act as politically accommodating as possible right now.

The challenging alignment of Saturn in Libra and Pluto in Capricorn are impacting the Fed’s natal Sun (its identity) opposite Pluto (its power) now. The Fed is under pressure to prove to Congress that it is still the best qualified and the most capable of balancing its many roles as the nation’s central bank. Saturn represents limitations and Pluto the loss of power if Congress creates the Consumer Financial Protection Agency that would remove the Fed’s ability to control consumer finance.

Pluto began affecting the Fed during 2008, exposing the Fed’s flaws that helped enable the financial crisis. The Fed’s conduct during the financial crisis and opaque arrangements has resulted in a push for transparency. From a Bloomberg news Freedom of Information Act lawsuit to a bipartisan movement in the House to pass legislation for the GAO to audit the Fed for the first time ever, the pressure is mounting to rein in the Fed’s discretion. Rep. Alan Grayson (D-FL) and Rep. Ron Paul (R-TX) wrote a letter to Senate Banking Committee Chairman Christopher Dodd requesting the Committee delay Bernanke’s confirmation hearing until the Fed releases more documentation about its financial rescues.

Today’s Wall Street Journal reports Sen. Dodd is about to unveil a bill where the Fed would not only lose their ability to regulate consumer finance, but would also be stripped of almost all bank supervision powers, replaced by a new single national bank regulator. As the WSJ observes, “under the proposal the Fed likely would emerge as a completely different agency...” Pluto represents nothing less than total transformation, and Capricorn represents government, established structures and hierarchies. What is no longer living up to its original purpose and intent must be destroyed in order to be transformed. The influence of Saturn and Pluto emphasize downsizing the Fed back to its primary focus on monetary policy – which is exactly what Sen. Dodd’s bill intends to do. The Fed’s counterargument is that without a regulatory function, the Fed cannot monitor and keep abreast of the banking system in a timely manner. The Fed’s function is to protect the banking system; therefore a regulatory role for the Fed is clearly a conflict of interest.

One job the Fed has telegraphed it does not want because it believes they can’t be identified is the responsibility for preventing asset bubbles. The Fed refuses to acknowledge its overly accommodative policies are building bubbles that if left unchecked could grow to rival the size of Jupiter before they burst.

Reading a front page story in yesterday’s Wall Street Journal (“Fears of a New Bubble as Cash Pours In”) feels like a dream where it’s 2005 again. Gold traded at $1,094 an ounce intraday yesterday, oil is hovering around $80 despite plentiful global supplies, and sugar and other commodities are at or near new highs due to money seeking higher yielding investments. Real estate in southeast Asia is booming, and global investors have poured an estimated $53 billion into emerging stock funds this year. Jupiter (foreign investment) conjoining Neptune for most of the year has rapidly expanded asset inflation. The IMF and the World Bank are worried about asset bubbles, but the Fed is not.

The overall consensus believes the Fed will not raise interest rates until at least six months from now. In addition to Saturn and Pluto, Jupiter will conjoin Uranus in the late Spring, also forming a challenging alignment to the Fed’s Sun and Pluto. If the Fed waits until their June 23, 2010 meeting to raise rates, the increase will have to be more than a quarter percent to tame the spike in inflation that is likely to occur then.