Summary Of Last Week’s Influences:
For all of the negative connotations attributed to the three week period three times a year when Mercury the planetary energy of communication and movement appears to move retrograde in the sky, last week demonstrated that every planetary energy has two sides – especially when it comes to dualistic Mercury.
Mercury is retrograde in Taurus April 18 until May 11. (I apologize to readers for not writing a post specifically for this retrograde period, but reading my post for the previous retrograde as well as the Aries New Moon Cycle post pretty much covers it.)
As the Sun entered Taurus on April 20, the ban on air travel in the UK and Europe due to Iceland’s volcano erupting was removed. Iceland’s volcano began erupting on April 14, the day of the Aries New Moon. The Aries New Moon squared the Capricorn Solar Eclipse that had triggered the earthquake in Haiti. As part of the earth element, when Capricorn and its planetary ruler Saturn are strong, there is a greater potential for earthquakes. And when you combine earth with the fire element (Aries), you get a volcanic eruption.
Uranus rules air travel, Saturn can represent delays, and earth energies “ground” things. The eruption occurred as the opposition of Saturn in Virgo and Uranus in Pisces squared Iceland’s natal Saturn in Gemini. Additionally, Mars in Leo conjoined Iceland’s Pluto. These transits to Iceland’s natal chart not only reflected the massive problems caused by the volcano, but a report commissioned by Iceland’s parliament released two days before the volcanic eruption accused the country’s former PM and other government leaders of “negligence” and possible insider trading by key Icelandic investors before Iceland’s banking system collapsed in October 2008.
Mercury retrograde periods have a tendency to bring choppy trading as the market is not sure what direction it wants to go. Although the indices spent each day in negative territory and seesawed back and forth from negative to positive, they turned around in the afternoon to end each day in positive territory (except for the S&P on Wednesday).
Mercury retrograde periods tend to bring our attention back to issues from the past. Wednesdays are ruled by Mercury and so are motor vehicles. Last Wednesday General Motors repaid the $6.7 billion owed to the US and Canadian governments five years ahead of schedule after emerging from bankruptcy last year. The government still has a 60% stake in GM that the company won’t be able to pay off until it issues stock when it becomes a public company again (which might not be until around mid-2011 at the earliest).
The massive blaze on April 20 (10 PM CT) at the Deepwater Horizon oil rig 50 miles off the Louisiana coast in the Gulf of Mexico reflects Uranus (explosions) in Pisces, the sign ruling oil and the sea. Technological developments and higher crude prices since progressive Uranus entered Pisces in 2003 have fostered deepwater drilling in new areas of the world that are primarily offshore. As the “drill baby drill” mantra has grown louder over the past couple years, Saturn (conservation) retrograde in hygienic Virgo opposing Uranus in Pisces (freedom from boundaries), is a reminder that deepwater drilling is not only a dangerous activity in terms of human lives, but is showing us the environmental impact which came just in time for Earth Day celebrations. Saturn is pressure and Uranus is the unexpected, and now rig operator Transocean thinks the explosion might have been caused by a blowout.
Aside from Mercury retrograde, Venus (money/banking) in its home sign Taurus squaring Neptune in Aquarius (illusion/deception/scandal) Friday was the dominant planetary influence last week. The Moon (sentiment) in Leo (speculation) and the hopes that corporate earnings would continue to come in above expectations, propelled the major indices to fresh 2010 high Friday.
Although financial earnings have been strong, some of those gains are attributed to several banks reducing their loan loss reserves. With Jupiter, Saturn, Uranus, and Pluto forming stressful alignments to the USA Venus in Cancer for the next two years, I think banks and financial companies such as American Express and Capital One are acting prematurely.
Fridays are ruled by Venus whose strong influences might have facilitated the market’s late day turnaround in spite of Greece requesting activation of a total of 45 billion Euros in aid from EU members and the IMF. But if EU members fail to unanimously agree, Mercury retrograde and Saturn retrograde (time, delays) opposite Uranus might force Greece to reschedule the timing its debt payments are due.
Venus square Neptune reflects the deceptive valuations issued by ratings agencies Moody’s and S&P who were grilled at a hearing Friday by the Senate Subcommittee on Investigations. Neptune is all about the art of illusion which is probably a better word to use as investment grade buyers really wanted the ratings agencies to present a pretty face so that investment grade buyers could chase higher yields because of the Federal Reserve keeping interest rates too low.
Summary Of This Week’s Influences:
It is not surprising that with major planetary alignments occurring this week that there are major financial events scheduled to accompany them.
Mercury rules Gemini and Venus rules Taurus. As Mercury retrograde continues in Taurus, Venus moved into Gemini today until May 19. While Mercury and Venus in each other’s signs create rapport, it is not as bullish as having both planets in Taurus. Venus in Gemini is more fickle and will trade on the latest news development than Venus in Taurus who prefers to stay on a slow and steady course upward. Venus in Gemini for the remaining Mercury retrograde period is likely to make the markets choppier and more unpredictable than under Venus in Taurus. It is difficult to discern a clear sense of market direction when Mercury is retrograde, so currency reversals between now and May 11 could be temporary.
When planets are in opposition to one another they tend to help us understand their energies by manifesting through the behaviors/actions of others. On Monday and most of Tuesday, the Moon (sentiment) will be in Venus-ruled Libra. Libra helps us understand ourselves and our world through our relationships with others.
Saturn in Virgo will oppose Uranus in Pisces for the fourth and final time in these signs. Just as Mercury retrograde brings our attention to issues/matters from the past, Saturn rules history as the planetary ruler of time. Saturn rules government and all types of structures. Uranus in Pisces seeks to reform by dissolving the structures that have become outmoded and only serve the status quo.
Financial Regulatory Reform:
Virgo and Pisces represent cleaning up the system so that it serves the majority rather than just those at the top. Mercury-ruled Virgo rules health and financial details (accounting). Neptune-ruled Pisces can be overly idealistic; things are not necessarily what they are presented to be. Each of the last three oppositions of Saturn and Uranus (November 4, 2008, February 5 and September 15, 2009) occurred around major turning points in the financial crisis. Barack Obama was elected president on the day of the first Saturn/Uranus opposition. One of the biggest issues of his presidential campaign (healthcare reform) has passed and now the Senate is about to take up financial regulatory reform.
Senate Majority Leader Harry Reid has scheduled a procedural vote to open debate on Senate Banking Committee Chairman Christopher Dodd’s legislation for 5:00 PM Monday. The unpredictable nature of Mercury retrograde combined with the Saturn/Uranus opposition and Saturn on the Ascendant of the chart for the vote could delay this. However, with Venus ruling the chart overall as well as the sectors of the chart ruling the banking system and global finance, there is a strong chance that the vote will occur.
The Moon in Libra can help to facilitate the desire for people with opposing viewpoints to cooperate with each other to reach a compromise. Even though all 41 Senate Republicans have signed a letter stating they oppose the bill in its current form, key Republican Senators are beginning to show some signs of flexibility. As Saturn in Virgo exactly conjoined Senate Minority Leader Mitch McConnell’s natal Neptune earlier this month, McConnell’s hard line rhetoric has ever so slowly started to dissolve. Mercury retrograde squaring McConnell’s natal Mercury retrograde in Aquarius can influence McConnell to be more reflective about taking an extremist view in opposing any kind of financial reform.
Saturn in Virgo exactly opposed Sen. Richard Shelby’s natal Venus in Pisces earlier this month, putting pressure on him to work to improve rather than complain about the “bailout” provision of the bill. Mercury turning retrograde on Shelby’s natal Mars in Taurus, helped to push him to return to negotiating with Sen. Dodd.
With the Moon (the public) in Libra located in the sector representing the nation and ruling the sector representing the Administration, and with President Obama’s natal Venus conjoining this sector of the 5:00 PM chart, the public is supportive of the legislation. Despite the excuse of opponents who claim that restricting certain trading practices here will push business overseas, it appears that other nations will enact similar reforms after reform passes here. At 5:00 PM the Moon will be conjoining the USA Saturn located in the sector of the USA chart representing the Administration. The bottom line here is that the bill will likely pass before the Summer Solstice, so Republicans such as Sen. Shelby who is up for re-election, would be better off showing constituents he supported the bill rather than being seen as blocking reforms and greater consumer protections. If Shelby wants to rebel against the Administration’s proposal, he should show his distaste for giving the Fed increased regulatory powers (Shelby voted against reconfirming Ben Bernanke).
Last Wednesday after the Moon entered Leo (speculation), the Senate Agriculture Committee passed Chairman Blanche Lincoln’s derivatives bill that is expected to be incorporated into Sen. Dodd’s legislation. Sen. Chuck Grassley was the only Republican voting for the bill that would go further than the Volcker Rule by forcing banks to give up their lucrative swaps desks. Most but not all of the trades in the $450 trillion derivatives market would have to go through exchanges and clearinghouses. Reflecting the Moon in dramatic Leo and the influence of Venus squaring Neptune (film), Lincoln’s bill put an end to the idea of creating movie futures that would have allowed bets to long or short an upcoming film’s box office take.
Goldman Sachs:
There have been more developments since I wrote last week’s analysis paralysis post on the SEC’s fraud charges against Goldman Sachs. As expected, GS Q1 earnings did not disappoint. However, most analysts’ questions on last Tuesday’s conference call were focused on the SEC’s lawsuit. Rather than not commenting about the investigation, GS had their co-counsel on the call. During the Q&A GS basically admitted that the only reason they lost $83 million in the CDO was because they weren’t able to unload the equity tranche onto some other sucker.
And far from GS telling you that only “sophisticated investors” purchased the CDO, what GS is not admitting that the “sophisticated investor” (Germany’s IKB Bank) was acting on behalf of the “sophisticated investors” in charge of U.S. municipalities such as Oakland, CA, King county, WA and the state of Montana.
GS admitted it knew the SEC was investigating this case since August 2008 and didn’t think receiving the Wells notice from the SEC last July was “material” enough to need to publicly disclose to shareholders. On an unrelated legal issue, GS director Rajat Gupta is being investigated by the government for allegedly providing insider information to Galleon hedge fund founder Raj Rajaratnam just before Warren Buffett invested $5 billion in GS in September 2008.
On Tuesday at 10:00 AM “the fabulous Fab” Fabrice Tourre, CFO David (“GS is not a retail bank”) Viniar, along with CEO Lloyd Blankfein can explain to the Senate Subcommittee on Investigations how as Blankfein stated last week that the SEC’s lawsuit against GS will “hurt America.”
FOMC Announcement:
The Federal Reserve concludes its two day meeting on monetary policy with an announcement around 2:15 PM Wednesday. The market is not expecting the Fed to tweak or drop its “extended period” phrase in the statement. But as regular readers know from a previous post, I am.
Bernanke and his other dovish cohorts at the Fed keep harping that rates can remain low for an extended period due to low inflation and high unemployment. Yet beyond higher inflation if owner’s equivalent rent and depreciating electronics were stripped out of the CPI, last week’s March Producer Price Index (PPI) showed food prices rose 2.4% - the sharpest increase since 1984. Vegetable prices jumped 49.3% (this is NOT a typo!). While companies so far have held back from passing along higher commodity costs to consumers, the PPI is an early warning sign that inflation is coming down the pipeline as costs can be passed along before the Fed can blink. (A sudden spike in inflation is what I predict will happen when Jupiter and Uranus conjoin in Aries in June.)
Last week Australia and India’s central banks raised interest rates, and Brazil is expected to raise rates at its April 28 meeting. Of greater interest to the US, the Bank of Canada removed its equivalent of “extended period” last week by announcing it was removing its commitment to hold rates steady until the end of the second quarter. The action prompted the market to automatically assume Canada would become the first G7 nation to raise rates at the bank’s June 1 meeting. Jupiter expands and Uranus spikes (in either direction), but when rates are at nearly zero, there’s nowhere to go but up.
The FOMC announcement occurs at the midpoint of Mercury’s retrograde cycle as the Sun in Taurus conjoins Mercury at midday during the Full Moon in Scorpio, putting the spotlight on debt and interest rates. The combination of all the planetary energies I’ve described in this and related posts raise the potential for increased choppiness, volatility and larger market moves over the remaining retrograde period. Midweek looks to be a turning point that weakens the market’s upward enthusiasm.
Monday, April 26, 2010
Positive early then weakens and turns negative before improving going into the close.
Tuesday, April 27, 2010
Positive bias.
Wednesday, April 28, 2010
Choppy/mixed to slightly positive early before starting to decline. Regains going into the FOMC announcement before turning negative by mid afternoon.
Thursday, April 29, 2010
Strongest in the morning, then becomes choppy/mixed to negative.
Friday, April 30, 2010
Negative, but strongest at the close.
Mitch McConnell: February 20, 1942 time unknown Sheffield, AL
Richard Shelby: May 6, 1934 time unknown Birmingham, AL
USA: July 4, 1776 5:10 PM Philadelphia, PA
Goldman Sachs: CDOs Custom Built To Fail
Published by WallStreetWeather.net“GS&Co. and Tourre knew that it would be difficult, if not impossible, to place the liabilities of a synthetic CDO if they disclosed to investors that a short investor, such as Paulson, played a significant role in the collateral selection process.” – Section D.19., page 7 of SEC complaint
The SEC on Friday charged Goldman Sachs (GS) and GS employee Fabrice Tourre with securities fraud for failing to disclose to investors that its $2 billion ABACUS 2007-AC1 synthetic CDO trust was custom built to fail.
GS created the CDO for the sole purpose of providing its client (hedge fund manager John Paulson of Paulson & Co.), with a mechanism to short the most exaggerated portions of the housing bubble. GS was also on the same side as Paulson by writing the CDS used to bet that the underlying trust would fail.*
GS then marketed this rigged portfolio to so-called sophisticated investors, using a third party collateral manager (ACA Management LLC; now part of RBS/Royal Bank of Scotland) to be the CDO’s portfolio selection agent as a marketing tool to increase the comfort level of perspective investors. The SEC alleges that GS misled ACA into believing that Paulson’s interest in selecting the underlying derivatives tracking subprime RMBS was because he was taking a “long” position in the CDO.
GS will likely defend itself by arguing that sophisticated investors should have read the prospectus rather than relying on the salesperson’s representations. GS might claim it’s unethical for them to disclose to prospective investors the counterparties participating on each side of the trade.
Whether it was creating IPOs of companies it manufactured to fit investors’ insatiable appetite for dot.com investments in the late 1990s or creating synthetic CDOs during the housing bubble because there were not enough bad mortgages to go around, packaging accounts for most of Wall St’s profits. Most of Wall St.’s “trading” could be classified as repackaging; GS needed to get all sides of the deal sold to minimize their credit risk.
During Saturn’s transit of Cancer (June 2003-July 2005) there was a limited supply of low quality subprime residential mortgages to satisfy speculative demand. Fabrice Torres, the GS employee charged in the SEC’s complaint, recognized in 2005 that the housing bubble was reaching its limit. Traders had successfully lobbied the International Swaps and Derivatives Association that year to make it easier for short sellers to collect by loosening the rules for the circumstances that would trigger a credit event.
John Paulson’s big bet against the housing market might have been hatched in late November 2004 when Pluto (debt/mortgages) in Sagittarius (gambling) first began to conjoin his natal Sun, and Mars in Pluto-ruled Scorpio returned to its natal position. These transits could have motivated Paulson to investigate how potentially toxic the excess debt would become.
By August 2006 Saturn in Leo made the first of three oppositions to Neptune in Aquarius. Speculation on housing had created an asset price bubble that was beginning to crack around the edges as lax and in many cases fraudulent credit criteria was affecting the performance of subprime loans. Like Paulson, many Wall St. traders were purchasing protection to speculate in the opposite direction. In its annual letter to shareholders, GS now admits that in late 2006 it switched its outlook on the mortgage market from positive to negative.
After being turned down by several banks including Bear Stearns, GS as well as Deutsche Bank, agreed to create CDOs so Paulson could take his biggest bets against the mortgage market by purchasing CDS to bet against these asset pools.
In January 2007, Paulson had comprised a list of what he considered to be the most likely triple B RBMS to experience a credit event in the near future: ARMs issued to homebuyers with low FICO scores in states that had experienced the highest home price appreciation (AZ, CA, FL, NV). Similar to the hedge fund Magnetar, Paulson was so discerning in ensuring the CDO portfolio contained the most toxic assets possible that he excluded any RMBS issued by Wells Fargo who was perceived to be one of the higher-quality subprime loan originators.
On February 26, 2007, two days before Saturn opposed Neptune for the second time, GS issued its prospectus on ABACUS 2007-AC1 to investors that contained Paulson’s handpicked selections. The SEC complaint alleges that “investors were assured that the party selecting the portfolio had an ‘alignment of economic interest’ with investors.”
If investors aligned themselves with planetary cycles, they would understand that Saturn in Leo opposing Neptune in Aquarius would describe a company that despite having a reputation as a leader in their field is selling and/or promoting a product to investors that could be deceptive or fraudulent in some way. Mercury rules all forms of communication and was retrograde then, indicating that investors were not being provided with a completely clear picture of the risks.
Neptune rules Pisces. Mercury retrograde along with the Sun and Uranus in Pisces creates an aura of illusion. GS’ prospectus was operating under the “don’t ask, don’t tell policy” regarding the true purpose of the fund’s creation; investors believed they could earn a high yield in a low interest rate environment without regard for any risk.
The CDO deal closed exactly three months later as Mars in Pisces conjoined Uranus and squared Jupiter in Sagittarius, indicating that the profit for Paulson and loss for big foreign investors such as German commercial bank IKB and Dutch bank ABN Amro, would be huge and happen fairly quickly.
Saturn and Neptune opposed each other for the final time in late June 2007. By the time Saturn entered Virgo in early September 2007, the subprime mortgage market was collapsing and coming under scrutiny as home prices were no longer rising. At the end of 2007 Jupiter conjoined Pluto in Sagittarius which harmonized with Paulson’s natal Jupiter/Pluto conjunction. Individuals born with Jupiter conjunct Pluto have the potential to accumulate massive wealth; Paulson made almost $4 billion in 2007 on his bearish bets.
When Pluto entered Saturn-ruled Capricorn in late January 2008, huge amounts of asset backed securities suddenly became nuclear fallout. Financial firms began writing down massive amounts of asset backed securities as the market for these instruments froze up. On January 29, 2008, Mercury turned retrograde as it conjoined Neptune. The CDO investors illusions had been shattered, as 99% of the portfolio had been downgraded by the ratings agencies. The investors lost over $1 billion while Paulson’s CDS against the portfolio yielded a $1 billion profit.
With the proliferation of synthetic CDOs, the financial tsunami was accelerating at warp speed during September 2008. Lehman Brothers filed for bankruptcy, and the government took 79.9% stakes in Fannie, Freddie, and AIG. Even GS needed the government to come to its rescue.
And now as the major stock market averages revisit levels not seen since September 2008, the message of Mercury retrograde in Taurus (banking) is that it’s time to review the financial practices that contributed to the crisis so reforms can be enacted. As I wrote in my post on the Aries New Moon cycle, “Mercury retrograde could reveal previously undisclosed information concerning deceptive financial practices.” I elaborated that “Venus squaring Neptune April 23 could elevate these issues into a possible scandal.”
Saturn’s recent shift back into Virgo to oppose Uranus in Pisces (exact April 26) for the fourth time while Mercury is retrograde in Taurus, reflects the government will enforce the rules and regulations already existing on the books (Saturn in Virgo) and enact reforms (Uranus) to establish a new regulatory structure that encompasses the lax or loosely regulated parts of the financial system that allowed fraudulent and deceptive practices (Pisces) to flourish into a credit contagion. Saturn retrograde in Virgo reflects government regulators had been working on the details to build a case against GS for some time. (GS didn’t publicly disclose it received a Wells notice from the SEC nine months ago.)
The New Moon is the best time each month to initiate new action, and this is especially true each year at the Aries New Moon. Aries is ruled by Mars, and with Mars in Leo, it is time to take action on speculative trading practices. As the first sign of the zodiac, Aries represents initiating something new which is why this sign likes to be the first to do something.
The SEC’s case against GS was the first case to come up out of its new structured products enforcement division. On Friday Neptune (fraud/deception) was precisely conjoining the SEC’s natal Saturn (structure/enforcement) for the first time since in its history, reflecting that the Commission would hold firms accountable for deceptive trading practices. The Aries New Moon squared the SEC’s natal Pluto and progressed Mars indicating that it would take action against fraud connected to secret trading deals of opaque financial products connected to mortgage debt.
The Aries New Moon squared SEC Chairman Mary Schapiro’s natal Uranus in Cancer and opposed Neptune in Libra, motivating her to move forward with fraud charges at this time. Schapiro’s progressed Mercury and Pluto conjoin the SEC’s progressed Sun in Leo; together they oppose the SEC’s natal Saturn. This is further confirmation that the SEC is determined to stake their reputation going after fraudulent behavior by starting with the king of investment banks, GS.
The SEC and Schapiro’s progressed planets conjoin President Obama’s natal Uranus in Leo. Mars in Leo conjoins the President’s natal Neptune, and Mercury in Taurus turns retrograde squaring Obama’s natal Sun in Leo. The Administration issued its proposal for financial regulatory reform June 17, 2009, the House passed their reform legislation December 11, and the Senate is scheduled to take up Sen. Dodd’s bill over the next two weeks.
Since Obama’s victory passing healthcare reform, Wall St. has been aggressively fighting to defeat financial reform. Republicans are continuing their blockade of anything Obama and the Democrats want to pass and GOP leaders have been telling Wall St. that they can help them defeat reform. Just as the health insurance companies assured the Administration they supported reform, Wall St. Democrats such as JPMorgan Chase CEO Jamie Dimon and GS acted supportive when the financial system was on life support. Now that the speculative markets are getting frothy again, Wall St. has returned to their arrogant and reckless behavior. In short, the behavior of all the players in this drama is politically motivated.
Friday was the right time for the SEC to file its lawsuit against GS as Fridays are ruled by Venus (money/banks). This energy was further strengthened as Venus is in its home sign Taurus. The Moon (sentiment) was in Taurus where its energies function well, placing further emphasis on the banks. The Moon conjoined Venus and formed a favorable aspect to Jupiter in Pisces Friday morning, a prelude to the sextile between Venus and Jupiter that would be exact on Saturday. Jupiter rules lawsuits, and with Venus and Jupiter in the signs they naturally rule and Pisces ruling fraud, Friday was a favorable day for the SEC to file their lawsuit against GS. Additionally, it appears that the SEC’s announcement of the lawsuit hit the newswires at 10:42 AM EDT - 7 minutes before the Moon would exactly square Neptune (fraud).
Wednesday’s Aries New Moon conjoined the NYSE’s natal Saturn; on Friday the alignment became exact. GS’ stock closed down $23.57 to $160.70 as Mars exactly conjoining GS’ stock chart’s natal Saturn, exerted selling pressure on the stock. Mercury turning retrograde conjoining the stock chart’s natal Sun in Taurus ensures GS stock will be remain prominently in the news over the next three weeks.
I have been unable to find the data for when GS was founded in 1869, but the incorporation chart of GS would describe how the company operates in modern times. The Sun in Moon ruled- Cancer shows the firm is security conscious and places a high priority on protecting itself from risk. This is further emphasized by the Moon conjoining Venus in Cancer.*** The Sun squaring Saturn in Taurus further reinforces the firm’s emphasis on prudent risk management to protect its enormous profits (Sun trine Jupiter; Venus in Cancer square Jupiter in Pisces).
You might say there is an element of a truth in CEO Lloyd Blankfein’s remark that GS is “doing God’s work,” as Jupiter-ruled Sagittarius (religious beliefs, ethics/morals) rules the sector of the Inc. chart representing the firm’s assets and values.
GS’s Sun opposite Neptune in Aquarius gives the firm a tendency to believe they have a higher calling that somehow releases them from the restraints of regulation and proprietary boundaries. There is a murky quality in GS’ relationships with its trading partners. GS does not believe it has an obligation to look out for the best interests of those the firm does business with unless it enhances the reputation and profits of GS (Saturn in Taurus square Neptune). With Scorpio ruling the Inc. chart and its planetary ruler Pluto in Sagittarius in the sector representing how the firm presents itself, GS cultivates its aura of secrecy, wealth and power.
Mars in Leo turned direct opposite the Inc. chart’s natal Neptune in March, indicating that the firm’s image would be affected by accusations of fraud and deceit. Neptune is currently opposing progressed Mercury in Leo which is retrograde, reflecting that the SEC’s fraud charge relates to past speculative bets where GS failed to disclose to investors that the CDO it was offering was engineered to be defective. Neptune squaring GS’ progressed Scorpio Ascendant further erodes the firm’s image, forcing GS to reveal its secrets.
I could not find the birth information for Fabrice Tourre, the 31 year old Frenchman who now works at GS’ London office, but it is obvious that Tourre would have taken his cues from senior management. The Aries New Moon squares Lloyd Blankfein’s natal Jupiter and Uranus in Cancer and opposes natal Neptune in Libra. Mercury turns retrograde opposite natal Venus in Scorpio, while Mars in Leo squares natal Saturn and Venus in Scorpio. Blankfein is not immune from feeling the heat and will have to personally defend the firm’s conduct.
Although the SEC’s charges do not extend to John Paulson since he did not do anything illegal, Neptune squaring Paulson’s natal Saturn in Scorpio and squaring Pluto in Leo reflects that Paulson had to purposely manipulate the situation to his advantage in order to yield his most profitable bearish bet. With his natal Saturn square Pluto in the signs ruling speculation and opaque and unregulated debt instruments, Paulson encapsulates the cycle of Saturn square Pluto as an example of why derivatives trading needs to be regulated and fully transparent.
Uranus conjoining GS’ natal Jupiter in Pisces means that the SEC’s lawsuit against GS could have unexpected consequences that cause a ripple effect beyond GS. The fact that the SEC did not pursue its usual path of reaching a financial settlement where the firm admits no wrongdoing says that the SEC thinks it has constructed a strong enough case to successfully challenge GS in court.
A legal defeat for GS would open the floodgates to more lawsuits as at that point any GS counterparty related to this transaction could demand financial restitution. Jupiter rules international interests, and British PM Gordon Brown is calling for the UK’s equivalent of the SEC to file charges against GS as the UK government owns a majority stake in RBS which lost $841 million in the CDO deal. The German government is considering action against GS since state owned bank KfW provided financial support during the crisis to IKB Bank, another big foreign investor in the CDO.
Pension funds, monoline insurers such as Ambac and MBIA, and AIG who wrote contracts issued on some of the insurance for older ABACUS deals GS issued, could potentially file lawsuits against GS. However, since the government owns 79.9% of AIG, the insurer might be blocked from taking legal action. GS Inc’s natal Sun conjoins the Federal Reserve’s natal Neptune. From forcing AIG to abandon negotiating a settlement to pay GS and other counterparties at par, issuing an emergency banking license to save GS from collapsing and qualifiy for TARP, and the Fed allowing GS director Stephen Friedman a waiver to retain his GS shares while Chairman of the NY FRB, the Fed has been a particular help to GS.
Even if the SEC’s case does not succeed, the lawsuit can cause GS clients to wonder if they were deceived too. A bank’s very survival depends on trust, and as the world is all too painfully aware, so does the entire global financial system.
Between March 2009 and March 2012 (and most critically through the summer and early autumn of 2010), Jupiter, Saturn, Uranus, and Pluto will form challenging alignments to the USA’s natal Venus, reflecting that the banking system is in the process of undergoing major transformation. GS Inc’s natal Venus conjoins the USA Venus indicating, that the SEC’s lawsuit is a prop that sets the stage for enacting financial regulatory reform. President Obama’s natal Venus also conjoins the USA Venus, reflecting that the Administration will determine how successful financial reform will turn out to be.
*A synthetic CDO (Collateralized Debt Obligation) consists of a CDSs (Credit Default Swaps) written on a series of bonds and loans (in this case residential mortgage backed securities/RMBS). A CDS is insurance against default.
**A mathematical calculation that moves the planets forward in time as a method of prediction. The Ascendant is the zodiac sign rising on the eastern horizon at the time of GS’s incorporation.
***Due to GS’ natal emphasis and the upcoming transits to GS Inc’s Venus/Moon/Mars, I think it is possible that a woman could become GS’ next chief executive.
Reference: NYT “Banks That Bundled Bad Debt, Bet Against It and Won” (published when Pluto exactly opposed the USA Venus).
Goldman Sachs, Inc: July 21, 1998 3:15 PM EDT Wilmington, DE
Goldman Sachs first publicly traded: May 4, 1999
Lloyd Blankfein: September 20, 1954 time unknown Bronx, NY
John Paulson: December 14, 1955 time unknown Queens, NY
SEC: June 6, 1934 time unknown Washington, DCBarack Obama: August 4, 1961 7:24 PM Honolulu, Hawaii
Aries New Moon Cycle April 14 – May 12, 2010
Published by WallStreetWeather.netThe Vernal Equinox is the start of a new annual cycle as it marks the moment when the Sun enters Aries, the first sign of the zodiac. Aries represents a new beginning which correlates to the moment in each month when the life force of the Sun and the emotional instincts of the Moon unite at the New Moon.
The Aries New Moon is the most important Moon cycle for personal achievement and creativity as Aries represents the self. Aries the initiator is ruled by Mars, the planetary energy of action. Mars in Sun-ruled Leo during this year’s Aries New Moon cycle enhances the energies of the Sun, boosting courage and confidence. The Sun’s favorable alignment to Neptune in Aquarius (exact April 18) means it’s time to download into action the ideas and goals envisioned in your head.
A favorable alignment between Venus in its home sign Taurus and Jupiter in Pisces (April 17) increases optimism regarding income generating opportunities. Besides money and other tangible assets, Venus/Taurus represents values and valuations.
With Mercury in Taurus turning retrograde April 18 until May 11,* the next month is a time to take a new approach to existing matters related to personal values and net worth. The May 13 Taurus New Moon cycle is a time to begin new financial endeavors.
Saturn retrograde in Virgo opposes Uranus in Pisces for the final time on April 26 in these signs** that represent the end of a cleansing process that began in November 2008. This has been a wakeup call to release and restructure what is not working efficiently and effectively, particularly in matters related to work and daily routines, health, and bringing unconscious behavioral patterns to the surface.
Saturn and planets in Taurus tend to be resistant and slow to change as these energies prefer to cling to what already exists until things reach a point where change becomes a more welcome prospect than staying stuck in a rut. The energies present at the Aries New Moon can assist in taking the fear and inertia out of removing self-imposed obstacles (such as procrastination) that stand in the way of accomplishing what’s important.
In the USA, the New Moon occurs on April 14 at 8:29 AM EDT. The New Moon, together with Mercury and Venus in Taurus are located in the sector that reflects action taking place behind the scenes. Mercury is the ruler of the chart and represents the nation’s attitudes. The public is more hopeful about their personal circumstances and prospects. It appears likely that Congress will pass an extension of job benefits.
Mercury also rules the sectors representing the economy/banking system, and the stock market. Most of the news and behind the scenes activity will be focused on the financial system and the speculative markets. As Wall St. lobbies behind closed doors to maintain the status quo of limited regulation of financial markets, the Obama Administration is likely to garner enough support to incorporate most of their proposed financial reforms into legislation.
Mercury retrograde could reveal previously undisclosed information concerning deceptive financial practices. Other industries affected might include the chemicals, energy, pharmaceutical, hospital/ healthcare, private security services could be particularly affected. Venus squaring Neptune April 23 could elevate these issues into a possible scandal. Traders might have trouble at that time separating rumor from fact.
Mercury retrograde could temporarily put the brakes on the market moving into new territory, putting pressure on valuations that bring a temporary pullback or at least keep the market range bound. Venus entering Mercury-ruled Gemini April 25 until May 19 can bring currency revaluations and reversals, along with a greater potential for choppier to more volatile trading.
Saturn in the sector representing the stock market opposes Uranus in the sector of Congress, and squares Pluto in Capricorn which is strengthened in its home sector ruling debt, bonds, taxes, opaque financial instruments, insurance, bankruptcies, and wills/estates. Proposed legislation tightening regulations, curbing excessive risk taking, and increased transparency, together with investigations and news reports will reveal new insights into the financial system. These undisclosed discoveries will motivate politicians and regulators to take action.
The stock market was positive at the prior oppositions of Saturn and Uranus (November 4, 2008, February 5 and September 15, 2009). The first two oppositions took the market to multiyear lows within a month, while the last one didn’t faze it. The September opposition (like this one) occurred when Mercury was retrograde which could have been a contributing factor that offset the previous trend.
As described in the current Weekly Forecast, the Aries New Moon squares the January 15 Solar Eclipse, conjoins the NYSE’s natal Saturn, and squares the USA’s natal Pluto in the sector ruling the financial system which reinforces the themes described above.
From April 21 when the Sun enters Taurus to April 25, half of the planets will be in the earth element, further increasing the potential for earthquakes and other geophysical phenomena. Saturn opposite Uranus on April 26 so close to the April 28 Full Moon in Scorpio combined with Mercury retrograde, keep these energies activated and can bring sudden and severe storms with flash flooding, tornadoes, and mudslides that cause power outages.
Hot spots are areas of the world likely to generate an increase in news due to
geopolitical/geophysical activities during the Aries New Moon cycle, but particularly between now and the April 28 Full Moon:
USA: East Coast: Fog/precipitation can impede visibility on the western PA, WV, VA, NC, SC, FL (esp. east coast – Ft. Pierce/Treasure Coast & Miami area), LA, TX, ID, NM, AZ, NV. Vancouver/West Coast, especially CA (Santa Barbara – LA/Long Beach; Bakersfield; San Francisco area) could experience an earthquake triggering a tsunami).
World: Mexico, Cuba, Panama (shipping possibly disrupted), Ecuador, Chile, Argentina, northeastern Brazil. Ireland, Portugal, Scandinavia, Germany, Italy, Greece, Czech Republic, Austria. Nuclear and terrorism issues related to Russia, Kazakhstan, Uzbekistan, Turkmenistan, Iran, Afghanistan, Pakistan. Africa: potential for increased violence and unrest in Morocco and Nigeria; Somalia. Persian Gulf: Saudi Arabia, Yemen, U.A.E., Oman. India, Nepal; escalation of military force in Burma and Thailand. China, Taiwan, Philippines, Sumatra, Indonesia, eastern Australia, New Zealand.
The Moon increases in light until reaching culmination two weeks later at the Full Moon. If you want to promote yourself or your business to generate the most attention, this is the time of the lunar cycle to do it!
The Full Moon in Scorpio is perhaps the most intensely emotionally charged Full Moon of the year. The five days of the Full Moon (two days before/day of/two days after) is a time of culmination and catharsis, as the light of the Moon serves to spotlight what requires our attention and interaction with others. Secrets are revealed. Tensions can become overheated as Mars squares the Full Moon. Scorpio, Leo, and Taurus are fixed energies that tend to stubbornly resist acquiescing control of any situation. What has been stuck or blocked tends to reach a turning point now. As the midpoint of the lunar cycle, the Full Moon illuminates our progress since the New Moon so that adjustments can be made over the next two weeks before the next lunar cycle begins.
Specifically, the Moon in Scorpio relates to mortgages and consumer loans, the Sun in Taurus money and banking, and Mars in Leo the desire to speculate. The Sun in Taurus opposes the Moon in Scorpio putting the focus on money/tangible wealth vs. debt/leveraged assets; deposit-based lending vs. wholesale funding. Taurus is income and assets you generate vs. shared assets and debt.
In the USA, the Full Moon occurs on April 28 at 8:18 AM EDT. The chart is similar to the New Moon chart, as Mercury is the chart ruler and also rules the sector representing the stock market. Mercury retrograde in Taurus conjoins the Sun in the sector of behind the scenes activity. Taurus’ planetary ruler Venus is located here as well and co-rules the stock market sector of the chart.
With the Full Moon opposing the Sun/Mercury and squaring Mars in Leo, announcements by government or corporate leaders will particularly move the market at this time. Saturn in the sector of the stock market rules the area of the chart representing debt/bonds and is tightly opposing Uranus. This could indicate news that spikes yields.
The Sun conjoining Mercury retrograde in Taurus aptly describes an announcement made by a central bank. Since the Full Moon occurs on the day of the FOMC meeting, it raises the potential for an announcement by the Fed that reverses what has been perceived by the market to be an entrenched policy stance. As I described in my post on “Bernanke’s Grip on the FOMC Is Weakening,” actions (Mars) speak louder than words if the Fed allows the yield on the three month Treasury bill to rise in spite of their rhetoric. Reflecting the untransparent nature of Scorpio, the Fed might alternatively retain its rhetoric while allowing the market to raise rates anyway. ;-)
There is greater potential now for transportation accidents such as a tanker explosion. Violent behavior at a post office, school, bank, healthcare facility, and potentially a prison break are more likely. As is an increase in neighborhood crime.
Hotspots: USA: East Coast – wet weather/poor visibility esp. Maine thru New England, FL, WI, IN, KY, TN, AL. West Coast: AL, Vancouver through Baja CA, NV, AZ, NM.
World: Haiti/Dominican Republic, Honduras, Nicaragua, Venezuela, Colombia, Ecuador, Peru, Chile, eastern Brazil (Rio). Ireland, UK, France, Spain, Portugal, Russia, Kazakhstan, Turkmenistan, Azerbaijan, Turkey, Syria, entire Persian Gulf region. Africa: Morocco, Somalia, Madagascar. India, Bangladesh, Burma, central China, Japan (earthquake potential), central Australia, New Zealand, Papua New Guinea, Fiji Islands.
*My next post will be about Mercury retrograde in Taurus.
**The final opposition of Saturn and Uranus will occur at the beginning of Libra and Aries respectively. These energies relate to the need to strike a healthy balance between individual needs/rights with those of a partner/others/society’s.
The Weekly Forecast has a detailed view of planetary influences and how they might affect the economy and financial markets.
WallStreetWeather.net Forecast For Week Of April 12, 2010
Summary Of Last Week’s Influences:
The stock market made more gains last week, with the Dow closing just shy of 11,000 on Friday. The indices and several commodities are trading at levels not seen since between 2007 and the 2008 Harvest Moon when the financial crisis got in full swing.
Pluto’s energies were pronounced then as it had just stationed direct. Last Wednesday as Pluto in Capricorn turned retrograde and Capricorn’s ruler Saturn shifted back into Virgo, the market took a tumble in the afternoon when Kansas City FRB president Thomas Hoenig, an FOMC dissenter, told an audience in Santa Fe that interest rates need to rise to 1% to prevent an asset price bubble. Hoenig’s speech occurred the same day as the current and former Fed chairmen were defending their “bubble now, mop up later” doctrine.
Hoenig’s speech came a day after the Minutes of the FOMC’s March 16 meeting were released with the remark that: “A number of members noted that the Committee's expectation for policy was explicitly contingent on the evolution of the economy rather than on the passage of any fixed amount of calendar time.” Richmond FRB president Jeffrey Lacker (a non voting member) told CNBC that his comfort level in keeping rates low for an extended period “is diminishing somewhat over time.” Lacker wants the Fed’s exit strategy to start with asset sales so the Fed is left with “holding Treasuries only.” That would be a $1 trillion plus garage sale!
And so while there was a lot of news correlating to Pluto turning retrograde, it is my opinion that the news related to the Federal Reserve now and in the coming months is the most important financial story related to Pluto turning retrograde last week. See my post “Bernanke’s Grip on the FOMC Is Weakening” for all the details.
“Interest Rates Have Nowhere to Go but Up” proclaims the front page of today’s New York Times, and follows the planetary trend I described in the Fed post. Bond king Bill Gross is going with the planetary flow by selling as interest rates face “an extended climb.”
A related NYT op-ed by Robert Shiller (of the S&P/Case-Shiller Home Price Index), points out NAR’s homebuyer traffic peaked in June 2005, one month before Saturn finished its transit of Cancer (real estate). In August 2006 Saturn in Leo opposed Neptune in Aquarius, indicating a contraction of easy credit would start to pop the air out of the housing bubble. Traffic bottomed in November 2008 when Saturn in Virgo opposed Uranus in Pisces. Worries about employment, further credit tightening and stringent lending standards, kept home prices falling.
Since peaking in September 2009 when Saturn made its third opposition to Uranus, traffic has been steadily declining even though the Fed would buy MBS for another six months and the homebuyer tax credit was renewed and expanded through April 30. As mortgage rates rise, home prices will have to continue to decline to attract buyers. Banks will have to get real about the prices of properties being sold as short sales and foreclosures, as buyers have learned that homes today no longer come equipped with a built in ATM machine. Saturn re-entering Virgo coincided with February Consumer Credit declining 5.6% y/y to $2.45 trillion as consumers strengthen their balance sheet by cutting borrowing and paying bills on time.
Summary Of This Week’s Influences:
There’s been a growing chorus of analysts and commentators who think the market is due for a moderate pullback this month before continuing higher. The reasons cited are the trend to sell on the news of earnings season which begins this week, along with concerns about what the Fed will do at its April 28 meeting.
The planetary picture coincides with this view. Markets have accelerated since the March 20 Vernal Equinox and Wednesday’s New Moon at 8:29 AM EDT in Aries coincides with the beginning of earnings season. The Aries New Moon squares the January 15 Capricorn Solar Eclipse which brought a minor selloff driven by fears of sovereign debt primarily related to Greece and concerns about China tightening bank lending as China’s progressed Venus conjoined the eclipse (see “Chanos, China, and the Capricorn Solar Eclipse”). The June 26 Capricorn Lunar Eclipse opposes China’s natal Uranus in Cancer in the sector of speculation which could bring volatile market gyrations as well as the potential for public uprisings and turmoil over issues relating to food, shelter, and censorship. This could also be due to a natural and/or manmade disaster.
The New Moon in Aries conjoins the NYSE’s natal Saturn and squares the USA’s Pluto in Capricorn. This influence can represent selling pressure or a market that drifts sideways which would create a lot of frustration since the energy of Aries is about pushing forward into new (or in the market’s case), revisited territory.
Three months ago the market was driving under the influence of Saturn square Pluto as Mercury turned direct in Capricorn and Saturn turned retrograde. Now Mercury will be turning retrograde in Taurus (money/banking) from April 18 until May 11 which can stall or reverse trading trends. Saturn opposite Uranus for the fourth (and final pass in Virgo/Pisces) on the 26th can bring more volatility and wider price moves as Congress shifts their focus to financial regulatory reform with the goal of passing legislation before Memorial Day.
Aries is ruled by Mars, the planetary energy of action, aggression, and military matters. With the Aries New Moon and Mars in Leo, action this week centers on world leaders. On Monday and Tuesday our Leo Commander-in-Chief will host the Nuclear Security Summit in Washington. With leaders representing 47 countries, it will be the largest gathering of global leaders in the U.S. since the U.N. was established. President Obama signed a nuclear weapons reduction treaty with Russia last week as Pluto turned retrograde. This week’s Nuclear Security Summit will additionally reflect the energies of Aries/Mars as the gathering debates the best course of action in dealing with the nuclear threat posed by non-declared nuclear nations and terrorism by militant groups.
On Wednesday as the Aries New Moon squares his natal Saturn in Capricorn, President Obama will meet with Democratic and Republican leaders to discuss financial regulatory reform.
With the New Moon squaring NASA’s Moon in Capricorn and opposing natal Jupiter in Libra (which impactsObama’s natal Saturn in Capricorn), the President travels to Florida Thursday for a Space Summit to discuss what’s next for NASA. With NASA’s natal Uranus conjoining the President’s Leo Sun, it would seem that the Administration’s initial plans to cut the grander objectives of humans returning to the Moon and an expedition to Mars could find its way back to the table. With his Leo Sun squaring Neptune in Scorpio, President Obama must give his Saturn in Capricorn a workout by devising concrete objectives and timetables to replace nebulous “someday” talk of human expeditions beyond low Earth orbit and hitching a ride with the Russians to the ISS.
My next post will be on the Aries New Moon followed by a post on Mercury retrograde in Taurus.
Monday, April 12, 2010
Positive trend weakens and could reverse in the late afternoon.
Tuesday, April 13, 2010
Negative conditions improve turning mixed to moderately positive.
Wednesday, April 14, 2010
Negative.
Thursday, April 15, 2010
Positive.
Friday, April 16, 2010 (Options expiration)
Choppy/mixed to positive trend bias.
The stock market made more gains last week, with the Dow closing just shy of 11,000 on Friday. The indices and several commodities are trading at levels not seen since between 2007 and the 2008 Harvest Moon when the financial crisis got in full swing.
Pluto’s energies were pronounced then as it had just stationed direct. Last Wednesday as Pluto in Capricorn turned retrograde and Capricorn’s ruler Saturn shifted back into Virgo, the market took a tumble in the afternoon when Kansas City FRB president Thomas Hoenig, an FOMC dissenter, told an audience in Santa Fe that interest rates need to rise to 1% to prevent an asset price bubble. Hoenig’s speech occurred the same day as the current and former Fed chairmen were defending their “bubble now, mop up later” doctrine.
Hoenig’s speech came a day after the Minutes of the FOMC’s March 16 meeting were released with the remark that: “A number of members noted that the Committee's expectation for policy was explicitly contingent on the evolution of the economy rather than on the passage of any fixed amount of calendar time.” Richmond FRB president Jeffrey Lacker (a non voting member) told CNBC that his comfort level in keeping rates low for an extended period “is diminishing somewhat over time.” Lacker wants the Fed’s exit strategy to start with asset sales so the Fed is left with “holding Treasuries only.” That would be a $1 trillion plus garage sale!
And so while there was a lot of news correlating to Pluto turning retrograde, it is my opinion that the news related to the Federal Reserve now and in the coming months is the most important financial story related to Pluto turning retrograde last week. See my post “Bernanke’s Grip on the FOMC Is Weakening” for all the details.
“Interest Rates Have Nowhere to Go but Up” proclaims the front page of today’s New York Times, and follows the planetary trend I described in the Fed post. Bond king Bill Gross is going with the planetary flow by selling as interest rates face “an extended climb.”
A related NYT op-ed by Robert Shiller (of the S&P/Case-Shiller Home Price Index), points out NAR’s homebuyer traffic peaked in June 2005, one month before Saturn finished its transit of Cancer (real estate). In August 2006 Saturn in Leo opposed Neptune in Aquarius, indicating a contraction of easy credit would start to pop the air out of the housing bubble. Traffic bottomed in November 2008 when Saturn in Virgo opposed Uranus in Pisces. Worries about employment, further credit tightening and stringent lending standards, kept home prices falling.
Since peaking in September 2009 when Saturn made its third opposition to Uranus, traffic has been steadily declining even though the Fed would buy MBS for another six months and the homebuyer tax credit was renewed and expanded through April 30. As mortgage rates rise, home prices will have to continue to decline to attract buyers. Banks will have to get real about the prices of properties being sold as short sales and foreclosures, as buyers have learned that homes today no longer come equipped with a built in ATM machine. Saturn re-entering Virgo coincided with February Consumer Credit declining 5.6% y/y to $2.45 trillion as consumers strengthen their balance sheet by cutting borrowing and paying bills on time.
Summary Of This Week’s Influences:
There’s been a growing chorus of analysts and commentators who think the market is due for a moderate pullback this month before continuing higher. The reasons cited are the trend to sell on the news of earnings season which begins this week, along with concerns about what the Fed will do at its April 28 meeting.
The planetary picture coincides with this view. Markets have accelerated since the March 20 Vernal Equinox and Wednesday’s New Moon at 8:29 AM EDT in Aries coincides with the beginning of earnings season. The Aries New Moon squares the January 15 Capricorn Solar Eclipse which brought a minor selloff driven by fears of sovereign debt primarily related to Greece and concerns about China tightening bank lending as China’s progressed Venus conjoined the eclipse (see “Chanos, China, and the Capricorn Solar Eclipse”). The June 26 Capricorn Lunar Eclipse opposes China’s natal Uranus in Cancer in the sector of speculation which could bring volatile market gyrations as well as the potential for public uprisings and turmoil over issues relating to food, shelter, and censorship. This could also be due to a natural and/or manmade disaster.
The New Moon in Aries conjoins the NYSE’s natal Saturn and squares the USA’s Pluto in Capricorn. This influence can represent selling pressure or a market that drifts sideways which would create a lot of frustration since the energy of Aries is about pushing forward into new (or in the market’s case), revisited territory.
Three months ago the market was driving under the influence of Saturn square Pluto as Mercury turned direct in Capricorn and Saturn turned retrograde. Now Mercury will be turning retrograde in Taurus (money/banking) from April 18 until May 11 which can stall or reverse trading trends. Saturn opposite Uranus for the fourth (and final pass in Virgo/Pisces) on the 26th can bring more volatility and wider price moves as Congress shifts their focus to financial regulatory reform with the goal of passing legislation before Memorial Day.
Aries is ruled by Mars, the planetary energy of action, aggression, and military matters. With the Aries New Moon and Mars in Leo, action this week centers on world leaders. On Monday and Tuesday our Leo Commander-in-Chief will host the Nuclear Security Summit in Washington. With leaders representing 47 countries, it will be the largest gathering of global leaders in the U.S. since the U.N. was established. President Obama signed a nuclear weapons reduction treaty with Russia last week as Pluto turned retrograde. This week’s Nuclear Security Summit will additionally reflect the energies of Aries/Mars as the gathering debates the best course of action in dealing with the nuclear threat posed by non-declared nuclear nations and terrorism by militant groups.
On Wednesday as the Aries New Moon squares his natal Saturn in Capricorn, President Obama will meet with Democratic and Republican leaders to discuss financial regulatory reform.
With the New Moon squaring NASA’s Moon in Capricorn and opposing natal Jupiter in Libra (which impactsObama’s natal Saturn in Capricorn), the President travels to Florida Thursday for a Space Summit to discuss what’s next for NASA. With NASA’s natal Uranus conjoining the President’s Leo Sun, it would seem that the Administration’s initial plans to cut the grander objectives of humans returning to the Moon and an expedition to Mars could find its way back to the table. With his Leo Sun squaring Neptune in Scorpio, President Obama must give his Saturn in Capricorn a workout by devising concrete objectives and timetables to replace nebulous “someday” talk of human expeditions beyond low Earth orbit and hitching a ride with the Russians to the ISS.
My next post will be on the Aries New Moon followed by a post on Mercury retrograde in Taurus.
Monday, April 12, 2010
Positive trend weakens and could reverse in the late afternoon.
Tuesday, April 13, 2010
Negative conditions improve turning mixed to moderately positive.
Wednesday, April 14, 2010
Negative.
Thursday, April 15, 2010
Positive.
Friday, April 16, 2010 (Options expiration)
Choppy/mixed to positive trend bias.
Bernanke’s Grip on the FOMC Is Weakening
Published by WallStreetWeather.netPluto represents the process of transformation by exposing conditions that have become toxic, corrupted, or decayed so the process of destruction, death, and rebirth can occur. Debt, bonds, mortgages/loans, opaque financial instruments, and insurance are ruled by Pluto. Since Pluto entered Capricorn the sign ruling all types of infrastructures, easy credit and excess leverage turned residential collateral into a toxic mountain of debt. Securitization trusts died from a lack of trust in the warranties underlying those products.
As described in the current and prior week’s Forecasts, Pluto’s energies were pronounced April 1-10 as from Earth’s vantage point it appears to be motionless in the sky as it turned retrograde April 6. Between now and the time Pluto turns direct September 14 marks a time for government to review and reform the failures of the financial system, as well as for the Federal Reserve to adjust its balance sheet to a more normalized $1 trillion from its current $2.2 trillion. Pluto ruling the chart for the time when Pluto turned retrograde in the USA and located in the sector representing the banking system reinforces this.(1)
Since Pluto entered Capricorn in 2008, it has conjoined the Federal Reserve’s natal Sun, opposed natal Pluto in Cancer, and squared the apex of the Fed’s chart representing its reputation. No financial infrastructure was more involved in helping to enable the financial crisis to occur nor more involved to combat it than the Federal Reserve. Yet despite what I have prognosticated(2) about Pluto transforming the purpose and scope of the Federal Reserve and the potential that Ben Bernanke (the Sun) might not remain Chairman, the Fed has thus far emerged from the worst of its Pluto transit perhaps a bit worse for wear around the edges, but relatively unscathed.
President Obama and Congress had the opportunity to work with Pluto’s transformative energies by replacing Bernanke with a Chairman who would acknowledge and learn from the failure of the Greenspan/Bernanke doctrine of “bubble now, mop up later.” Acknowledging this is not a sound policy for long term economic stability. Their adherence to the “wealth effect” – if people “feel” wealthy they will spend and thus boost the economy regardless if they are financially able to do so is reflected by the Fed’s Moon (consumer sentiment) in Pluto-ruled Scorpio. The Moon rules the home which the Greenspan/Bernanke doctrine used as a vehicle for wealth extraction. The home provided the collateral to borrow (Pluto/Scorpio) ever greater amounts of money to spend on consumer discretionary items as long as the home’s unrealized gains continued to increase.
Pluto in Capricorn represents a time of reckoning for taking responsibility and being accountable for past actions. Capricorn and its planetary ruler Saturn represent regulations, and as the nation’s primary banking regulator, the Fed failed in every respect, except running the economy on full throttle until it collapsed. This would be the equivalent of running the Indy 500 without any pit stops. How many drivers would make it to the finish line?
Lehman Brothers didn’t and became the biggest bankruptcy in U.S. history when Pluto’s energies were pronounced September 2-16, 2008. Pluto went direct September 8, the day the government took 79.9% control of Fannie Mae and Freddie Mac. And Bernanke still continues to reiterate his “anger” over rescuing AIG from a near death experience on September 16.
So last Wednesday with Pluto stationary retrograde and Saturn retrograde shifting into Virgo until July 21, both Greenspan and Bernanke continued to reiterate their legacy of “financial innovation,” refusing to accept any responsibility for their role in the financial crisis.
Testifying before the Financial Crisis Inquiry Commission, Greenspan claimed that if the Fed had tried to rein in the mortgage industry, “Congress would have clamped down on us.” So what about the Fed’s “independence” that Bernanke and other Fed heads keep citing as a reason not to take any of the central bank’s powers away? ;-) And it is truly Greenspan who is suffering from “amnesia” since he forgets he was known as the “maestro” and everyone hung onto his every word! The Commission should have had all those tapes of Greenspan’s past testimony and speeches queued up where he encourages consumers to take out an adjustable rate mortgage.
Greenspan did get a taste of karmic payback when Brooksley Born(3), the former head of the Commodity Futures Trading Commission under President Clinton who sought to regulate derivatives but was blocked by Greenspan, Robert Rubin, and Larry Summers, got to interrogate Greenspan. Commissioner Born said the Fed “utterly failed to prevent the financial crisis.”
As Greenspan was getting grilled, Bernanke gave a speech filled with excuses for the Fed’s failure to act to curtail the excessive risks in the financial system. He credited the Fed’s “innovative programs” and the success of the bank stress tests contributed to the stock market’s recovery. Greenspan and Bernanke have touted the Fed’s “commitment to consumer protection,” yet the Fed’s rules were so loose that the Administration and Congress had to go a step further to strengthen consumer protections on credit cards and student loans. And the Fed shows its true colors in private by lobbying against the Administration’s proposal to create an independent Consumer Financial Protection Agency that would take away the Fed’s power to regulate consumer finance.
While Bernanke was speaking in Dallas, Thomas Hoenig, the president of the Kansas City FRB, spoke in Santa Fe on “What About Zero?” Demonstrating that he understands the energies of Pluto in Capricorn and Saturn in Virgo, Hoenig said:
“I am convinced that the time is right to put the market on notice that it must again manage its risk, be accountable for its actions, and cease its reliance on assurances that the Federal Reserve, not they, will manage the risks they must deal with in a market economy.”
With his Sun in Virgo conjoining Mercury in Virgo, Hoenig’s speech criticized the “long-run risks created when money and credit are too easy for too long, when interest are near zero, and when financial imbalances risk macroeconomic and financial instability.” As a voting member of the FOMC, Hoenig has dissented at the last two meetings over keeping the “extended period” phrase in the statement. Hoenig explained in the March 16 statement and elaborated in his speech that “the market appears to interpret the extended period as at least six months. Such actions, moreover, have the effect of encouraging investors to place bets that rely on the continuance of exceptionally easy monetary policy. I have no doubt that many on Wall Street are looking at this as a rare opportunity.”
Hoenig is concerned about asset price inflation, citing the example of farmland being bid up in the Midwest just like in the S&L crisis of the 1980s when he was a senior bank supervisor for the Fed. Hoenig said:
“I am confident that holding rates down at artificially low levels over extended periods encourages bubbles, because it encourages debt over equity and consumption over savings. While we may not know where the bubble will emerge, these conditions left unchanged will invite a credit boom and inevitably, a bust.”
With Mars in speculative Leo conjoining his natal Saturn and the Sun in Mars-ruled Aries opposing his natal Mars in Libra last Wednesday, Hoenig assertively challenged Bernanke and his dovish cohorts myopic view that high unemployment and a low reading of the Fed’s preferred measure of inflation, core (ex-food and energy costs) PCE (4) indicate that zero interest rates and excess liquidity in the system do not pose an inflation risk. Although employment and economic conditions are slowly and steadily improving, virtually all sectors of the speculative markets have risen to levels beyond or in anticipation of a future much brighter than today.
A planet at the beginning of a cardinal sign (5) affects the Fed’s chart by raising the potential for changes to monetary policy and how the Fed conducts its business. From 2008-2011, the Fed’s Sun (its core purpose and identity) is under the influence of the longer term cycles of Jupiter, Saturn, Uranus, and Pluto.
During Pluto’s transit of the Fed’s Sun and Pluto, the central bank took on an unprecedented amount of public and private debt onto its balance sheet and pushed short term interest rates down to zero to shore up the banks and stimulate the economy. As Saturn entered Venus-ruled Libra in late October and began squaring Pluto, the Fed stopped buying Treasuries (“quantitative easing”). The Fed also announced it would stop buying mortgage backed securities by March 31, and would let its special lending programs established during the height of the crisis expire. On February 19, the Fed raised the discount rate it charges banks for emergency loans from 0.50 to 0.75%.
The Fed’s Sun opposite Pluto reflects the frequent boom and bust perpetuated by the Greenspan/Bernanke doctrine of creating a genuine wealth effect for the few (the plutocrats) at the expense of the long term economic stability of the nation. Now the Fed must devise a broad “exit strategy” to slowly drain the excess liquidity from the system and reduce the Fed’s enormous balance sheet without jeopardizing the improving but still fragile economy.
Hoenig is concerned that the Fed will fail to act quickly enough, creating “greater inflation, significant credit and market imbalances, and an eventual financial crisis.” If the market seems bubbly now, Jupiter and Uranus conjoining in Aries early June can overheat market and economic conditions far faster than the Fed believes. The Fed flooded the economy with excess liquidity but cannot control where it goes. As asset prices rapidly rise, people feel better and the real economy eventually catches up with the asset bubble.
The April 28 FOMC meeting occurs at the Pluto-ruled Scorpio Full Moon indicating that a disagreement over borrowing rates could reach a culmination. In his Wednesday speech, Hoenig took his dissent up a notch by stating his desire to “initiate sometime soon the process of raising the federal funds rate target toward 1 percent” which “would still represent highly accommodative policy.” Saturn opposing Uranus in Pisces reflects the push-pull between Committee hawks like Hoenig who would like to slowly rein in the Fed’s boundaries and begin to tighten monetary policy (Saturn) vs. Bernanke and his dovish cohorts who want to keep things unrestrained and fluid (Uranus) to support continued growth and expansion (Jupiter approaching conjunction to Uranus).
The Sun will conjunct Mercury in Taurus (money/banks) that day, reflecting a major announcement (Mercury) regarding monetary policy coming from the nation’s central (Sun) bank. Mercury is retrograde, increasing the potential for removing the “extended period” phrase from the statement. Mercury is a dualistic energy and with the Sun and Mercury opposing the Moon, St. Louis FRB president James Bullard could become the second dissenter as he was quoted the week after the FOMC meeting that the “extended period” phrase “put the Fed in a box.” Two dissenters would likely cause a market reaction as it would show Bernanke is losing his influence a unified FOMC. Venus in Mercury-ruled Gemini challenging Pluto then could also bring another increase in the discount rate.
Back in November I wrote about the need for the Fed to tighten at the June 23 FOMC meeting, and briefly summarized in a December post the planetary influences in play then. The Sun and Mercury will form challenging alignments to Jupiter, Saturn, Uranus, and Pluto June 19-27 which will impact the Fed’s natal Sun and Pluto.
The Fed’s Sun opposite Pluto reflects how much of the central bank’s operations are conducted behind closed doors. Jupiter and Uranus conjoining in Aries and opposing Saturn in Libra and squaring Pluto in Capricorn during the summer will force the Fed to act sooner than it intended to if it wants to avert a crisis that this time can unambiguously be attributed to the Fed’s creation. Jupiter is expansion and excess, Uranus represents sharp and extreme price movements, Saturn can be overly cautious and fearful of instituting change; it is also the pressure to tighten. Pluto represents the extremes of massive wealth and massive financial collapse. All together these energies can quickly and unexpectedly flip the market in the opposite direction if the Fed is perceived to not have control over the situation.
Uranus can also describe short term rates rising in unconventional ways. Even if the Fed does not officially raise rates by midyear, if the yield on the 3 month Treasury bill rises from its current 0.15% to 0.50%, then it shows the Fed is actually allowing the market to tighten.
Related Post: “Demoting Pluto Did Not Prevent the Financial Crisis”
(1) Pluto retrograde: April 6, 2010 10:33 PM EDT Washington, DC
(2) Click here to go to the Federal Reserve section of the blog.
(3) I highly recommend watching the PBS Frontline special “The Warning.”
(4) Personal Consumption Expenditures is part of the monthly personal income report. PCE is similar to the CPI, as it measures the cost of a range of goods and services but PCE assumes and accounts for changes in consumer consumption as prices change.
(5) The cardinal signs (Aries, Cancer, Libra, Capricorn) initiate action that has a wide-reaching effect.
Thomas M. Hoenig: September 6, 1946 time unknown Fort Madison, Iowa
WallStreetWeather.net Forecast For Week Of April 5, 2010
Summary Of Last Week’s Influences:
The major indices chalked up their fifth straight week of gains last week, with the Dow and the S&P reaching their highest levels since late September 2008. “Anything but cash,” as Societe Generale advised in an asset allocation note last week worked well for most markets during the first quarter of 2010. In fact, the S&P had its best quarter since 1998 - the last time Jupiter was in Pisces.
Pisces rules oil which gained 5.5% during the first quarter. Jupiter in Pisces describes an abundant supply of crude oil which in 1998 was trading below $20 a barrel (and gasoline was slightly over a $1 a gallon). But that was when the Fed funds rate spent most of the year over 5% as higher interest rates make it too expensive to speculate by stockpiling crude in Cushing or offshore. Fundamentals do not justify crude hovering close to $85 a barrel, but 0% interest rates for an “extended period” of time do.
The mantra of “anything but cash” should be stirring feelings of déjà vu as the Federal Reserve has engineered yet another asset price bubble as we go from one financial crisis to another under the Greenspan-Bernanke stewardship. The desperation for yield has driven up the prices of junk bonds, commodities, equities, and the return of covenant lite and PIK toggles* in debt financing.
Libra represents alliances, partnerships, and arrangements and the Full Moon represents a culmination point. The March 29 Libra Full Moon brought an end to the 40 year benchmark contract for iron ore when miners BHP Billiton and Vale reached agreement with Chinese and Japanese steelmakers to switch to quarterly contracts based on an average spot level rather than a negotiated annual contract.
The new system will create greater price volatility. Mars rules iron and steel, and Mars in speculative Leo helped push prices higher. More importantly will be what happens when Jupiter (June 6) and Uranus (May 27) temporarily enter Mars-ruled Aries and conjoin on June 8. Jupiter conjoining Uranus raises the potential for action at both ends of the extreme: the rapid rise up and the abrupt and unexpected crash landing. This goes beyond iron ore as Jupiter and Uranus will be opposed by Saturn and squared by Pluto in Capricorn over the summer, most actively during late July/early August.
While the Federal Reserve believes that inflation “is likely to be subdued for some time,” iron ore prices have increased between 80 to 100% in the past year and are set to climb higher. As a front page story in the Financial Times pointed out, 95% of iron ore consumption goes into making steel, and the steelmakers are raising prices up to a third. Consumers will pay higher prices for all types of goods, especially appliances and automobiles.
As described in last week’s Forecast, Friday’s employment report showed a gain of 162,000 jobs in March which was less than the 200,000+ Wall St. expected, but included a higher than anticipated amount of private sector jobs. February’s report was revised to reflect a gain of 62,000 jobs despite the severe snowstorms covering many parts of the country.
While Friday’s report was the best since May 2007, the unemployment rate remained unchanged at 9.7%. Saturn moving back into Virgo the sign representing the labor force (see below), could elevate the unemployment rate as people who gave up looking for work or are doing part time work seek full time employment motivated by improving economic conditions.
Summary Of This Week’s Influences:
Pluto and Saturn are the dominant planetary players this week. As mentioned in last week’s Forecast (see link above), Pluto’s intense and powerful energies (think nuclear) are pronounced April 1-10 as it turns retrograde on late Tuesday until September 14.
Pluto rules debt/deficits, bonds, mortgages/loans, opaque financial derivatives, insurance, taxes, trusts, wills, and bankruptcy. Pluto in Capricorn (2008-2024) is transforming the nature of all of these things as the structures (Capricorn) that support them (government and corporations) go through their own metamorphosis. First comes the initial crisis as all the problems related to these things are exposed, then comes the manipulation and corruption by those in power to keep the status quo in place, followed by more destruction and collapse in order for transformation to occur. When Pluto in earth element Capricorn is prominent, the ground can literally open up.
Pluto turning retrograde highlights all of these issues and the need to review where we are in the process. There is a greater opportunity for what’s been kept under the surface to get exposed and for existing issues to face more scrutiny. Pluto is turning retrograde opposite the USA’s natal Jupiter in Cancer reflecting that the biggest financial issues affecting the nation have yet to be addressed.
The Federal Reserve with its Sun in Capricorn opposite Pluto has been pushing to maintain its power, independence, and secrecy since Pluto in Capricorn began affecting it in 2008. On Tuesday the Fed will release the Minutes from its March 16 meeting. The Fed’s specialty has been to create bubbles and mop up afterward. This summer as the Fed is bombarded with the energies of Jupiter, Saturn, Uranus, and Pluto, Bernanke will have to show the world the Fed can tighten in time to prevent yet another collapse of its own making.
Capricorn is ruled by Saturn which has been retrograde since January 13 and is now shifting back into Virgo until July 21. Although Saturn squaring Pluto raised concerns about sovereign debt, agreement has yet to be reached over what to do about it. Saturn in Virgo for the final round up is all about accountability and the need to clean up the unfinished work of instituting new regulations, particularly in financial standards and healthcare reform.
The Moon (sentiment) in Capricorn Monday and Tuesday reinforces the energies of Pluto in Capricorn and Saturn in Virgo this week. Saturn’s energies are strong all week as even though the Moon moves into Aquarius Thursday and Friday, this sign was ruled by Saturn before Uranus was discovered. This is why Aquarius can represent the extremes of Saturn’s cautious conservatism and the progressive and innovative energies of Uranus. This push-pull between the two planetary energies will become stronger as Saturn in Virgo opposes Uranus in Pisces on April 26.
Monday, April 5, 2010
Positive bias; strongest in the morning but begins to weaken as day progresses and could turn negative.
Tuesday, April 6, 2010
Choppy/mixed to mostly positive.
Wednesday, April 7, 2010
Negative (bearish).
Thursday, April 8, 2010
Seesaws between moderately negative to positive.
Friday, April 9, 2010
Positive bias weakens and could reverse in late afternoon.
*Covenant lite means there are less restrictions on the terms and requirements of the loan. A PIK (payment in kind) toggle allows a company to issue more debt in substitution for a loan payment in cash.
The major indices chalked up their fifth straight week of gains last week, with the Dow and the S&P reaching their highest levels since late September 2008. “Anything but cash,” as Societe Generale advised in an asset allocation note last week worked well for most markets during the first quarter of 2010. In fact, the S&P had its best quarter since 1998 - the last time Jupiter was in Pisces.
Pisces rules oil which gained 5.5% during the first quarter. Jupiter in Pisces describes an abundant supply of crude oil which in 1998 was trading below $20 a barrel (and gasoline was slightly over a $1 a gallon). But that was when the Fed funds rate spent most of the year over 5% as higher interest rates make it too expensive to speculate by stockpiling crude in Cushing or offshore. Fundamentals do not justify crude hovering close to $85 a barrel, but 0% interest rates for an “extended period” of time do.
The mantra of “anything but cash” should be stirring feelings of déjà vu as the Federal Reserve has engineered yet another asset price bubble as we go from one financial crisis to another under the Greenspan-Bernanke stewardship. The desperation for yield has driven up the prices of junk bonds, commodities, equities, and the return of covenant lite and PIK toggles* in debt financing.
Libra represents alliances, partnerships, and arrangements and the Full Moon represents a culmination point. The March 29 Libra Full Moon brought an end to the 40 year benchmark contract for iron ore when miners BHP Billiton and Vale reached agreement with Chinese and Japanese steelmakers to switch to quarterly contracts based on an average spot level rather than a negotiated annual contract.
The new system will create greater price volatility. Mars rules iron and steel, and Mars in speculative Leo helped push prices higher. More importantly will be what happens when Jupiter (June 6) and Uranus (May 27) temporarily enter Mars-ruled Aries and conjoin on June 8. Jupiter conjoining Uranus raises the potential for action at both ends of the extreme: the rapid rise up and the abrupt and unexpected crash landing. This goes beyond iron ore as Jupiter and Uranus will be opposed by Saturn and squared by Pluto in Capricorn over the summer, most actively during late July/early August.
While the Federal Reserve believes that inflation “is likely to be subdued for some time,” iron ore prices have increased between 80 to 100% in the past year and are set to climb higher. As a front page story in the Financial Times pointed out, 95% of iron ore consumption goes into making steel, and the steelmakers are raising prices up to a third. Consumers will pay higher prices for all types of goods, especially appliances and automobiles.
As described in last week’s Forecast, Friday’s employment report showed a gain of 162,000 jobs in March which was less than the 200,000+ Wall St. expected, but included a higher than anticipated amount of private sector jobs. February’s report was revised to reflect a gain of 62,000 jobs despite the severe snowstorms covering many parts of the country.
While Friday’s report was the best since May 2007, the unemployment rate remained unchanged at 9.7%. Saturn moving back into Virgo the sign representing the labor force (see below), could elevate the unemployment rate as people who gave up looking for work or are doing part time work seek full time employment motivated by improving economic conditions.
Summary Of This Week’s Influences:
Pluto and Saturn are the dominant planetary players this week. As mentioned in last week’s Forecast (see link above), Pluto’s intense and powerful energies (think nuclear) are pronounced April 1-10 as it turns retrograde on late Tuesday until September 14.
Pluto rules debt/deficits, bonds, mortgages/loans, opaque financial derivatives, insurance, taxes, trusts, wills, and bankruptcy. Pluto in Capricorn (2008-2024) is transforming the nature of all of these things as the structures (Capricorn) that support them (government and corporations) go through their own metamorphosis. First comes the initial crisis as all the problems related to these things are exposed, then comes the manipulation and corruption by those in power to keep the status quo in place, followed by more destruction and collapse in order for transformation to occur. When Pluto in earth element Capricorn is prominent, the ground can literally open up.
Pluto turning retrograde highlights all of these issues and the need to review where we are in the process. There is a greater opportunity for what’s been kept under the surface to get exposed and for existing issues to face more scrutiny. Pluto is turning retrograde opposite the USA’s natal Jupiter in Cancer reflecting that the biggest financial issues affecting the nation have yet to be addressed.
The Federal Reserve with its Sun in Capricorn opposite Pluto has been pushing to maintain its power, independence, and secrecy since Pluto in Capricorn began affecting it in 2008. On Tuesday the Fed will release the Minutes from its March 16 meeting. The Fed’s specialty has been to create bubbles and mop up afterward. This summer as the Fed is bombarded with the energies of Jupiter, Saturn, Uranus, and Pluto, Bernanke will have to show the world the Fed can tighten in time to prevent yet another collapse of its own making.
Capricorn is ruled by Saturn which has been retrograde since January 13 and is now shifting back into Virgo until July 21. Although Saturn squaring Pluto raised concerns about sovereign debt, agreement has yet to be reached over what to do about it. Saturn in Virgo for the final round up is all about accountability and the need to clean up the unfinished work of instituting new regulations, particularly in financial standards and healthcare reform.
The Moon (sentiment) in Capricorn Monday and Tuesday reinforces the energies of Pluto in Capricorn and Saturn in Virgo this week. Saturn’s energies are strong all week as even though the Moon moves into Aquarius Thursday and Friday, this sign was ruled by Saturn before Uranus was discovered. This is why Aquarius can represent the extremes of Saturn’s cautious conservatism and the progressive and innovative energies of Uranus. This push-pull between the two planetary energies will become stronger as Saturn in Virgo opposes Uranus in Pisces on April 26.
Monday, April 5, 2010
Positive bias; strongest in the morning but begins to weaken as day progresses and could turn negative.
Tuesday, April 6, 2010
Choppy/mixed to mostly positive.
Wednesday, April 7, 2010
Negative (bearish).
Thursday, April 8, 2010
Seesaws between moderately negative to positive.
Friday, April 9, 2010
Positive bias weakens and could reverse in late afternoon.
*Covenant lite means there are less restrictions on the terms and requirements of the loan. A PIK (payment in kind) toggle allows a company to issue more debt in substitution for a loan payment in cash.
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