WallStreetWeather.net Forecast For Week Of February 8, 2010

Summary Of Last Week’s Influences:
Once again the stock market closed lower last week as the influence of Saturn square Pluto caused investors to fear the lack of fiscal discipline (Saturn in Libra) by global governments to reign in their debt mountain (Pluto in Capricorn).

Fears that certain countries sovereign debt could become the new subprime or Act II of the financial crisis caused global markets to tumble Thursday as the P.I.G.S. (Portugal, Ireland, Greece, Spain) in the EU are getting slaughtered over excessive spending during the Pluto in Sagittarius years (1995-2008) that has proven to be unsustainable. Saturn represents the law of cause and effect; what comes around, goes around. Rather than becoming more competitive as EU member nations, P.I.G.S. took advantage of the EU’s cheaper borrowing costs to load up on debt (Pluto), ignoring structural inefficiencies (Saturn) such as high labor costs relative to productivity.

Saturn in Libra squaring Pluto in Capricorn is putting the fiscal imbalances front and center. Ignoring the problem won’t make the energies of Saturn and Pluto any easier to deal with; quite the opposite in fact! Tilting the economic scales too much towards using real estate and its related consumer spending as a way to create a short term economic boom resulted in a global bust. The contracting energies of Saturn squaring Pluto (debt and taxes) in Saturn-ruled Capricorn (2008-2024) indicates that governments need to have the political will to make the hard choices that they would rather not make before even more draconian measures become necessary.

In last week’s Forecast I mentioned that Greece’s chart is (surprise surprise!) being affected by the Saturn/Pluto square. So are the other three countries. With Saturn/Pluto impacting Mars and Saturn in Cancer (real estate) and Pluto in Libra, Portugal is more affected than Ireland or Spain now.

The Euro hit an 8 month low against the U.S. Dollar, still considered to be the world’s reserve currency despite a warning from Moody’s Wednesday that the USA’s AAA credit rating could be downgraded if no actions are taken to address the $1.56 trillion budget deficit and/or economic growth remains weak.

In “Investors dazed by week of turmoil,” the FT’s Jennifer Hughes remarks that “if 2009 was about taking risk, this year has been about shedding it.” This reflects the market’s optimistic euphoria from Jupiter conjoining Neptune from the spring of 2009 thanks to global government stimulus measures and the E-Z money policies of central banks like the Fed and the Bank of England engaging in quantitative easing. (What normal people call printing money.)

The Fed and the BoE have stopped the presses and are gradually unwinding the special lending programs established during the financial crisis but have yet to prove that they’re willing to implement exit strategies to unwind the excess liquidity.

So far global governments are expressing the “lower vibration” of Saturn by trying to preserve the status quo at all cost despite the fact that Pluto is out to destroy what is no longer working as it should be. The longer we delay Saturn’s need to restructure and deny that Pluto is a very powerful planet in our universe, the longer our economic structures will decay into a slow and prolonged death. Only by forcing ourselves as a nation to face our deepest and most difficult issues can we transform our economy to achieve steady and sustainable growth instead of politically expedient quick fix boom and bust cycles.

The frictional (square) relationship between Saturn and Pluto is a call for action, not denial, delay and avoidance. Jupiter in Pisces this year represents that big sacrifices are required by all. Whether by cooperation or by bringing what has been kept in background to the forefront, those people and elements in our economy and society who seek to keep things as they are will be called out.

An example of this is when I wrote that President Obama is working behind the scenes to get healthcare legislation passed in spite of what media headlines would have the public believe. What the President was really telling Democrats last week is that they will pay the price on Election Day if they fail to pass a healthcare bill. The Aquarius New Moon on February 13 opposes Obama’s natal Uranus in Leo in the sector of his chart that represents diplomacy and open enemies. The Republicans are about to get a wakeup call as President Obama is launching a new initiative to force Republicans over the following two weeks to declare issue by issue which components of the House and Senate healthcare bills they support or oppose, no longer allowing them to hide behind the “let’s start over” mantra.

What President Obama will be doing at this time is harnessing the energies of Saturn square Pluto, balancing one side of Libra’s scales by passing legislation right away on what elements of the healthcare bill Democrats and Republicans agree on. The other side of the scales forces the Republicans to specify where they stand on each individual component of the House and Senate bills rather than generalizing.

I had written that if Scott Brown won the Massachusetts Senate seat, the Republicans would likely end up wishing that Martha Coakley had won. Losing the 60th vote in the Senate allows President Obama to force the opposition to responsibly govern (Saturn) instead of spewing endless rhetoric. Losing the supermajority in the Senate eliminates the ability of single Democratic Senators such as Ben Nelson and Joe Lieberman from holding the party hostage. Instead, either a negotiated deal with Republicans has to be achieved or else the Democrats can do what Republicans loved to do when they were the majority and take the reconciliation route with 50 Democrats.

Friday’s employment report was a mixed bag that resulted in a lot of market volatility. While the employment picture is not improving near as fast as anyone would like, it showed that the job losses are far less than they had been. It is also evidence that more stimulus spending “to create jobs” is unnecessary. What was needed from the start was accelerated depreciation or complete expensing of equipment purchases for businesses for a limited period of time, so that companies would have to act now. This would create jobs building and installing new equipment at a time when businesses would ordinarily be reluctant to spend money on capital purchases.

Summary Of This Week’s Influences:
The week begins with Venus conjoining Neptune in Aquarius. This planetary alignment can be bullish and ignore risk factors by donning a pair of rose colored glasses, or become bearish over financial rumors or deception involving credit issues. This alignment combined with the Moon in Jupiter-ruled Sagittarius on Monday can create large market moves.

Financial fraud is another way to describe Venus conjoining Neptune. This is what New York AG Cuomo has accused Bank of America (BAC), former CFO Joe Price, and former CEO Ken Lewis of by failing to disclose that Merrill’s losses were worse than the bank had disclosed prior to the shareholder vote of the merger. With the Moon in Sagittarius (Courts), Judge Jed S. Rakoff will rule on whether he will accept a revised settlement the bank reached with the SEC on the same day as Cuomo’s lawsuit after the Judge rejected the first one last year. The actual BofA/SEC trial begins March 1 and Ben Bernanke needs to be put on the witness stand.

Mercury the planet of communication and movement leaves its long sojourn in Capricorn since December 5 and moves into Aquarius on Wednesday until March 1. Mercury in Uranus-ruled Aquarius is a time for progressive thinking and inventive ideas. Aquarius rules protests, and public workers in Greece are set to go on a 24 hour strike against the government seeking to raise taxes and rein in government wages. Mercury entering Aquarius can create currency reversals and increased volatility.

Fed Chairman Bernanke testifies at 10:00 AM Wednesday before a House Financial Services Committee hearing on unwinding the Fed’s emergency lending programs. At 2:00 PM the House Oversight Committee holds a hearing on “Toyota Gas Pedals: Is the Public at Risk?” Since I wrote the post about Toyota’s Saturn/Pluto problems last week, the company will now have to recall the Prius to repair a software glitch in the hybrid vehicle’s braking (Saturn!) system.

Venus (money/banking) moves into Neptune-ruled Pisces Thursday until March 7. Venus here further emphasizes concerns about credit ratings and their effect on interest rates.

The Aquarius New Moon Saturday at 9:51 PM EST conjoins Neptune while Venus conjoins Jupiter in Pisces. This increases the likelihood of large market moves and volatile conditions that take the market from one extreme to the other as the underlying influence of Saturn and Pluto strongly in effect over the next month can cause the market to readily shift from euphoria to panic and back, causing investors to become unnerved.

Monday, February 8, 2010
Choppy/volatile as market swings from negative to improving conditions that take the market mixed to positive.

Tuesday, February 9, 2010
Positive but begins losing momentum to reverse gains as sentiment turns cautious in the afternoon.

Wednesday, February 10, 2010
Negative early then begins improving in late morning to become choppy/mixed to moderately positive.

Thursday, February 11, 2010
Negative conditions become choppy/mixed to positive as day progresses.

Friday, February 12, 2010
Choppy/volatile conditions that swing from bearish to bullish.

1 comment:

Anonymous said...

Another excellent analysis, always enjoy reading your insights particularly with respect to major institutions and the individuals at their helm.
The global economic scene certainly appears to be set for drama with three planets in exalted transits: Saturn in Libra, Mercury in Aquarius and Venus in Pisces preceding the pivotal fortnight between New and Full moons this month.
Sunday's Sun/Moon/Neptune conjunction occurs on Chinese New Year's Day; your earlier column on Beijing banks may prove even more relevant. The Sun/Jupiter conjunction on the day of the Virgo full moon on the 28th looks a stunner.
Looking forward to more of your most enjoyable perspectives.