Summary Of Last Week’s Influences:
Mercury the planet of communication, commerce, and movement turning retrograde August 20 at the same time Saturn (fear/economic contraction) squared Pluto (debt) along with Jupiter opposing Saturn, has renewed concerns about economic growth.
Mercury entered its “home” sign Virgo July 27 – the day after status quo Saturn completed its final opposition to Uranus, the awakener that began on Election Day 2008. During this time period, expansive Jupiter squared Pluto August 3 and opposed Saturn August 16. Bank of America/Merrill Lynch Economist Ethan Harris says we’re in a “growth recession,” which is a cut to the chase way of summing up all these energies.
The three weeks that Mercury is retrograde is a time for review and reflection; a time to put the re prefix in front of everything. Mercury in Virgo loves to analyze data which during retrograde is particularly subject to revisions. Second quarter GDP (Q1 was 3.7%) was revised downward but came in slightly better than expected at 1.6%, causing the market to rejoice Friday.
Since Mercury is a dualistic energy, a better than expected GDP was not the only news that propelled the market to its biggest one day gain since August 2 in a week that ended lower. The market felt reassured by Fed Chairman Ben Bernanke’s Jackson Hole speech that the Fed is ready to act “if the outlook were to deteriorate significantly.”
The Moon represents the mood of the market. The Full Moon fully illuminates the issues described by the sign the Moon is in. Tuesday’s Full Moon in Pisces shined the spotlight on the market’s addiction to ever increasing doses of Fed support. Just like an addict, they will never be satisfied in their quest to profit from lower interest rates.
Transiting Neptune crossing the USA’s natal Moon in Aquarius, together with the Full Moon conjoining the sector representing real estate in the chart of the Full Moon set for Washington DC, reflected the market’s bad reaction to July existing home sales which fell 27.2% to 3.83 million – the biggest monthly decline ever.
As I described in my post on the Summer Solstice, the American Dream is undergoing a radical transformation over the next several years. If the market is freaked out that July unsold home inventories are at a 12.5 month supply, wait until the banks finally decide to stop stalling and add their properties to the pile. Home prices have only declined to 2004 levels. In many parts of the country the bottom won’t occur until prices return to where they were in early 1995 before Pluto entered Sagittarius that ushered in the era of excess debt.
Although Saturn has squared Pluto for the final time, the end of one cycle indicates the beginning of a new one. This is especially the case as Jupiter, Saturn, Uranus, and Pluto this summer made challenging alignments to each other at the beginning degrees of cardinal (initiating) signs. The economy is going through growing pains as it adjusts to surviving with less fiscal stimulus and makes the transition to a new economy that is not overly dependent on consumer spending. But Wall St. and other large corporate interests have become far too comfortable with government support, so it is in their best interests to spread the fear which in turn breeds more fear. Why should the “free marketers” take risks when they can be supported by the government and the Fed at the public’s expense? Economic conditions have improved since the darkest days of the financial crisis, yet monetary policy is far looser now than it was then.
It just wouldn’t be Mercury retrograde without two more recalls from Johnson & Johnson (JNJ). This time it was hip replacement implants that needed to be replaced at more than twice the industry average. Earlier in the week 100,000 boxes of contact lenses sold in Europe and Asia were removed from the market due to manufacturing problems.
Summary Of This Week’s Influences:
This week looks to begin where Friday’s market left off. The Moon in Taurus Monday and Tuesday emphasizes banking and finance. Taurus rules money and on Monday we’ll see how much money consumers are saving vs. spending.
I call Wednesday a “triple Mercury” day since Mercury rules Wednesdays, and the Moon and Mercury are in Mercury-ruled signs at the last quarter Moon in Gemini. This could bring information overload, currency reversals, multiple circuit breaker triggers (which happened three times with Intel shares last Friday), problems with data feeds and computer systems, travel delays/cancellations, and a greater potential for experiencing some of the snafus that Mercury retrograde is famous for.
The biggest planetary event and market event this week occurs on Friday when the August employment report is released. Five minutes later the Sun and Mercury will conjoin in Virgo, the sign ruling the labor force.
Consensus estimates project a loss of 118,000 public sector jobs and a gain of 42,000 private sector jobs, resulting in a net loss of 76,000 jobs in August with the unemployment rate projected to rise 0.1% to 9.6%. The Sun conjoining Mercury retrograde in Virgo increases the potential for major revisions to previous reports. The Moon will be in its home sign Cancer, emphasizing the employment report’s effect on the consumer economy.
The Sun conjoining Mercury retrograde could remind us that on average, September historically tends to be a downer month for the Dow. A key driver is when the market realizes the Fed can’t just double its balance sheet every time there’s a little bit of fright. Any move now by the Fed weakens its ability to effectively react to a more serious problem later. Like it or not, the Fed’s ammunition is not limitless. Bernanke must choose his economic offensives judiciously.
Monday, August 30, 2010
Positive.
Tuesday, August 31, 2010
Positive trend bias.
Wednesday, September 1, 2010
Positive conditions weaken to choppy/mixed before turning negative.
Thursday, September 2, 2010
Strongest early and weakens as day progresses, closing negative.
Friday, September 3, 2010
Negative.
Bernanke’s Unprecedented Transparency Reveals a Divided Fed
Published by WallStreetWeather.netIs it a coincidence or is The Wall Street Journal using astrology to make their point by portraying Federal Reserve Chairman Ben Bernanke as an archer?
The Sun represents self-identity. Bernanke was born with the Sun in Sagittarius, the sign symbolized by the archer* who aims their arrows high to transcend boundaries. Sagittarius is part of the enthusiastic and impulsive fire element. Martin Kozlowski’s illustration accompanying Alan Blinder’s op-ed piece on “The Fed Is Running Low on Ammo,” depicts Bernanke with one arrow left to shoot into the raging fire. Then an article in yesterday’s WSJ observed that “there aren’t many arrows left in the quiver.”
The problem is you can’t fight fire with fire. Yet that is exactly what Bernanke is doing by continuing to pump liquidity in excess of what the economy is willing to absorb. Until the economy is ready to absorb more liquidity, providing more liquidity solves nothing. The concept that increasing liquidity will expand the economy has its limits at which point the economy will need to evolve on its own. Economic expansion will commence once the de-levering process has been completed. Transformative Pluto in Capricorn (2008-2024) indicates this process will take time as deep structural changes must take place in every facet of the economy.
As I wrote in the Weekly Forecast: “Mercury turned retrograde squaring the Federal Reserve’s natal Venus in Sagittarius and Fed Chairman Bernanke’s natal Sun in Sagittarius, indicating the central bank and its Chairman could come under criticism over its latest monetary policy gambit.” Mercury retrograde (August 20 – September 12) is a time to review communications and policies.
From Bernanke’s description of the economic outlook as “unusually uncertain” to the Fed’s unexpected action at the August 10 FOMC meeting, markets have been anxious the entire week leading up to Bernanke’s speech in Jackson Hole yesterday, especially after investors were rattled by Jon Hilsenrath’s lead story in Tuesday’s WSJ (“Fed Split On Move To Bolster Sluggish Economy”). Citing “interviews with several participants,” the article noted that “at least seven of the 17 Fed officials” at the August 10 FOMC meeting “spoke against the proposal or expressed reservations” about maintaining the Fed’s balance sheet at $2.054 trillion and altering the statement to reflect a slower growing economic outlook.
Although the Fed is determined to keep its financial arrangements private,** it is unprecedented for the central bank to openly reveal disagreement among members in formulating monetary policy. Yet the fact that no one at the Fed disputed or sought to clarify any of the points made in the article suggests the Fed as an institution sought to explain the thinking behind its August 10 move as a preview to Bernanke’s speech.
The WSJ article and Bernanke claimed the reason behind the Fed’s August 10 decision to maintain the balance sheet was that an increase in mortgage refinancing was shrinking the Fed’s balance sheet more rapidly than anticipated. According to the WSJ, New York FRB president William Dudley supported by Eric Rosengren (Boston FRB) and Janet Yellen (San Francisco FRB) viewed the Fed “prematurely applying the brakes” as economic conditions appeared to slow. Like PIMCO, Goldman Sachs has been pushing the Fed to restart quantitative easing. And since William Dudley*** was a former partner and chief economist at the firm, it raises the question if Dudley is completely operating independently.
Although Kansas City FRB president Thomas Hoenig has been the only Fed member to publicly dissent, other members (Governors Kevin Warsh and Elizabeth Duke; FRB presidents Richard Fisher/Dallas, Narayana Kocherlakota/Minneapolis, Charles Plosser/Philadelphia, and Jeffrey Lacker/Richmond) expressed various concerns at the August 10 meeting. These ranged from the belief that credit was already cheap enough and banks still aren’t lending, to hold off altering the balance sheet but tweak the statement to reflect weaker economic conditions, to the risk the move would be seen as a prelude to restarting quantitative easing, to Plosser’s concern that the action “was confusing and ran the risk of scaring the markets.”
Sagittarius is ruled by Jupiter; both preside over the world of academia and philosophical beliefs. The article notes that Bernanke runs FOMC meetings as if he was still a Princeton professor. With his natal Mars and Neptune conjunct in Libra, Bernanke creates the illusion of a unified Fed by allowing everyone to air their views and acknowledges their disagreements before asserting his beliefs.
With his Sun in Sagittarius opposing Jupiter, Bernanke dogmatically clings to his worn out economic models and academic theories. Although Bernanke refused to take preventative measures that could have averted the financial crisis, he has enacted almost every policy prescription cited in an eerily prescient 2002 speech on preventing deflation (a.k.a. the “helicopter Ben” speech).
The combination of Mercury retrograde in Virgo together with Jupiter exactly squaring the Fed’s Sun in Capricorn during the Jackson Hole conference reflects that Bernanke thought he needed to clarify in greater detail that the Fed is maintaining the status quo. These two transits to the Fed’s chart also reflect the analysis paralysis and ridiculously high expectations raised by PIMCO, Goldman Sachs, and the media that Bernanke might announce further monetary easing. Apparently they didn’t carefully read the WSJ article which noted that “Officials spent very little time discussing the idea of expanding the securities portfolio beyond its current size.” And in a CNBC interview before Bernanke’s speech, St. Louis FRB president James Bullard cleared any confusion that PIMCO’s Tony Crescenzi seemed to have. Bullard said the Fed is “letting the MBS roll off and replacing with Treasuries” adding, “I think we’ve probably done as much as we’re going to do in the MBS market.”
Jupiter and Sagittarius represent the explorer who needs room to roam. In cowboy country with the majestic mountains as a backdrop, Bernanke spoke about “The Economic Outlook and Monetary Policy” in the Explorers room at Jackson Lake Lodge in Grand Teton National Park.
Bernanke took great pains to emphasize throughout the speech the Fed’s “vigilance” to do what it can “to ensure continuation of the economic recovery.” But he also emphasized that the economic outlook would have to “deteriorate significantly” for the Fed “to provide additional monetary accommodation through unconventional measures if it proves necessary.”
As he described in his semiannual testimony before Congress on July 22, Bernanke listed three options the Fed has discussed, along with their drawbacks. Since I described the Fed’s remaining “arrows” in “Bernanke Tells Wall Street the Fed’s Hands Are Tied,” I will focus on Bernanke’s concerns about each one.
1. Restart quantitative easing (or what pundits have dubbed “QE2”). Bernanke slightly alludes to whether QE2 would even be effective in an already overly accommodative environment. (Since banks have already parked their excess reserves at the Fed, why does the Fed think putting more liquidity out there would make a difference?) Bernanke raises the possibility that QE2 could create excess inflation if people are skeptical the Fed is capable of implementing an exit strategy before it’s too late. However, Bernanke views this as a positive if inflation expectations are too low.
2. “Easing” through the FOMC statement by defining “extended period” of exceptionally low interest rates. This would require such careful wording and caveats from the Fed it would be meaningless.
3. Lower the interest rate the Fed pays on excess bank reserves kept at the Fed currently at 0.25%. (An interest rate that many retail customers wish they were getting on the money deposited in their checking and savings accounts at the bank!) Cutting the interest rate in half or “even to zero” Bernanke says, “could disrupt some key financial markets and institutions” and only have a negligible effect on long term rates. While I view this easing option as doing the least amount of damage because it seems pretty ineffective, Bernanke’s reservation about this could be to ensure interbank lending doesn’t totally dry up.
4. “Increase the Fed’s medium-term inflation goals above levels consistent with price stability.” Bernanke makes it clear he sees “no support for this option on the FOMC” to raise the Fed’s informal inflation target of 1.5-2% (“official” inflation is running close to the lower end of the target anyway). That’s why even an inflation dove like Bernanke said yesterday that “inflation expectations appear reasonably well-anchored, and both inflation expectations and actual inflation remain within a range consistent with price stability.” Bernanke went even further to say that “inflation would be higher and probably more volatile under such a policy, undermining confidence and the ability of firms and households to make longer-term plans, while squandering the Fed’s hard-won inflation credibility.” Deflationistas should sleep easier now that Bernanke said “falling into deflation is not a significant risk for the United States at this time.” Jupiter’s energy is expansive and inflationary, so deflation is the last thing we need to be concerned with Bernanke leading the Fed.
As I have written, Bernanke (along with retiring Fed Vice Chairman Donald Kohn and Janet Yellen who President Obama has nominated to replace him), were born with no planets in the earth element. Individuals with the Sun and other planets in the earth element**** (such as Thomas Hoenig and former Fed Chairman Paul Volcker) understand the dangers of an ultra accommodative monetary policy.
Because the earth element rules money and material concerns, these individuals tend to be more attuned to how practical economic theories and mathematical models work in the real world. When the earth element is prominent, it takes time to build a healthy and sustainable economy. That is why the transition from a period of rapid growth and excess leverage during the era of Pluto in Sagittarius (1995-2008) to the contraction and slow growth of Pluto in earth element Capricorn is so hard for impatient fire oriented people to fully grasp.
Pluto in Sagittarius brought the era of globalization as cheap goods produced overseas (combined with using real estate for equity extraction) fueled our consumer-based economy. With most homes underwater coupled with high unemployment, Bernanke remarked he was surprised that consumers are saving more than he anticipated (since Fed policy is meant to punish savers to promote spending). Ever the optimist, Bernanke hopes that once economic conditions improve, consumers will have shored up their balance sheet so they are in a position to spend more. (Someone needs to break the news to Bernanke that consumers will never return to spending as recklessly as they once did as Pluto in Capricorn and the other major planetary alignments I have been writing about represent a seismic societal shift born out of leaner economic times.)
In “Inflation, not deflation, Mr. Bernanke,” Andy Xie points out that “globalization has severely restricted the effectiveness of economic stimulus,” referring to trade as “stimulus leakage.” “Essentially, demand is local, but supply is global. This is why the old assumptions on stimulus are no longer reliable.” As Xie elaborates:
“When the Fed or the European Central Bank tries to stimulate, they are actually stimulating the global economy as a whole. Water, no matter where it comes from, flows downwards. Stimulus, similarly, flows to where costs are low and banking systems are healthy. If you believe this logic, the actions of the Fed and the ECB fuel inflation and asset bubbles in emerging economies rather than stimulate growth at home.” When banks begin lending and suppliers raise prices, the Fed will be faced with the “extremely hard” task of removing the massive amount of money that has been injected into the global economy.
Reflecting the frankness of Sagittarius/Jupiter energies, Bernanke takes pride in increasing transparency at the Fed. I believe Bernanke granted the WSJ unprecedented access to the Fed as a forum to allow the doubters on the Fed to speak out in exchange for voting with the Chairman. Sagittarius is a seeker of truth. And the truth is that for all practical purposes, Bernanke has run out of arrows.
*Sagittarius the archer is usually portrayed as a centaur, a being who is half man and half horse. Aries and Leo are the other signs that comprise the fire element.
**On August 20 the U.S. Court of Appeals upheld a unanimous three judge panel ruling from March 19 requiring the Fed to release documentation of all loans the Fed granted following the collapse of Bear Stearns on March 16, 2008 as Pluto (lending/secrets) conjoined the Fed’s natal Sun (its identity/reputation) and opposed natal Pluto for the first time in the central bank’s history. The 20 commercial banks that joined the Fed’s defense of the lawsuit brought by Bloomberg news have already said they will appeal the decision to the Supreme Court. If the Fed doesn’t join the banks it will have 60 days to release the documents by the end of this week under the Freedom of Information Act.
***As of this writing, I have been unable to obtain his birth data.
****Taurus, Virgo, and Capricorn comprise the earth element.
Ben Bernanke: December 13, 1953 time unknown Augusta, GA
Federal Reserve: December 23, 1913 6:02 PM EST Washington, DC
WallStreetWeather.net Forecast For Week Of August 22, 2010
Summary Of Last Week’s Influences:
Bloomberg radio reported on Friday that Goldman Sachs (GS) took physical delivery of uranium. This gives a whole new meaning to the firm’s mantra that “we are not a retail bank.” The fact that Iran began loading its nuclear reactor the following day is pure coincidence as GS no doubt has more lucrative deals in mind. And if those potential deals fall through maybe Bernanke would buy the uranium to put in his virtually empty toolkit. The cure for “unusual uncertainty” is Uranus-ruled uranium since at that point Bernanke could rightfully claim he has the nuclear option!
Now we’re getting a little bit ahead of ourselves as the influence of Uranus squaring Pluto (nuclear issues) won’t start to become a strong influence until later in 2011.* Now it’s time to get back to what happened last week (which will return back to the Fed’s doorstep anyway).
As described in the Weekly Forecast, Jupiter opposing Saturn and Saturn squaring Pluto did bring large intraday moves in the major indices every day last week. Jupiter’s preference to see the glass as half full only prevailed on Tuesday and Wednesday when the Moon (sentiment) was in Jupiter-ruled Sagittarius. The Dow hit its intraday high Tuesday when Minneapolis FRB president Narayana Kocherlakota (a non FOMC voting member) said the Fed doesn’t have any new doubts about the economic recovery and he doesn’t believe deflation is a possibility. (So why is the Fed buying more Treasuries other than to appease PIMCO's Bill Gross and certain Wall Street heavies?)
Once Saturn-ruled Capricorn took charge Thursday and Friday, the glass was now half empty. Giant Jupiter is no match for Saturn when the lord of the rings is also involved with Pluto the wealthy lord of the underworld in Saturn-ruled Capricorn. Jupiter just ends up exaggerating Saturn’s fears.
Jupiter (expansion/optimism) and Saturn (contraction/fear) are the two leading economic indicators. Their opposition cycle tends to occur during times of economic recession. Combined with Saturn squaring Pluto, sentiment is pulled to the negative side and is only being supported by the Fed’s overly accommodative policies.
Thanks to the Fed, US corporations have been borrowing cheaply and have built a mountain of cash equal to the Fed’s $2 trillion balance sheet. But instead of using the cash to grow (Jupiter) organically, companies have primarily exhibited a desire to use their excess cash for acquisitions. This results in further economic contraction (Saturn) as unemployment rises when many of the workers at the acquired company are laid off. And there’s no need to worry about deflation since acquisitions limit competition, allowing companies to raise prices.
Pluto rules M&A; its specialty is the hostile takeover. Jupiter’s optimism opposing Saturn’s limitations and squaring Pluto got the merger mania started last week when BHP Billiton (BHP) made a $38.6 billion unsolicited offer for Potash Corp (POT). Then Intel (INTC) announced its biggest acquisition ever in acquiring McAfee (MFE) in a $7.68 billion all cash deal. Soon it will likely cost more to dispose of your trash if you use Hefty brand bags since Rank Group is acquiring Pactiv (PTV) for $4.6 billion.
Venus rules banking. Venus conjoining Mars in the marriage sign Libra for the first time since the shotgun weddings during the financial crisis reflected that banks are getting back in the act as First Niagara Financial Group agreed to acquire NewAlliance Bancshares for $1.5 billion. (A Wall Street Journal article about the deal notes that bank mergers probably won’t accelerate until next year which correlates to when Jupiter transits banking sign Taurus June 2011-June 2012.)
As Saturn and Pluto begin to separate from their frictional square for the final time, it will be interesting to see if the fear driven mania for buying government and corporate debt at the current ridiculously low yields continues unabated or begins to top off.
The Fed is trying to do everything it possibly can to push people into spending and making risky investments. This is why the Dow is only down 2.1% year to date and crude oil is still trading over $70/barrel despite the fact that inventories are at their highest levels since November 1983. People want to be invested in hard assets as a protection against future inflation.
The reality is that the supposedly astute investors in long term Treasury securities think they will know when to sell, achieving a smart capital gain before the bottom falls out of the Treasury bubble. They will aptly tell you that nobody in their right mind believes they will be invested in Treasuries for the long haul. But doesn’t this sound like a repeat of the real estate market before the bubble burst? The same parallels can be drawn in oil and gold.
An op-ed piece in Thursday’s Wall Street Journal (“Bye-Bye to the Fed-Funds Rate”) by Benn Steil and Paul Swartz discusses the inability of the Federal Reserve to control both the Fed funds rate and the money supply. Given the current excess bank reserves sitting at the Fed surpasses $1 trillion, the Fed cannot both maintain a low interest rate and prevent the sudden exit of this excess liquidity into the economy. The article states that the Fed would have no choice politically but to target interest rates at the expense of the money supply, concluding that the ECB was unable to tempt Eurozone banks to maintain excess reserves at a paltry 1% interest.
When US banks are ready to start employing their excess reserves, the Fed’s interest on these would have to surpass the economic value to the banks in order to control the money supply. The choice being to let $1 trillion times an accelerated velocity of money escape or substantially raise the Fed funds rate through interest paid on reserves to an “extraordinary” level. Steil and Swartz provide one of the best explanations of these forces I have ever read. The problem is accentuated if the Fed starts a new phase of quantitative easing on the same scale as its original phase. Preventing $2 trillion in excess reserves from escaping would require an even higher interest rate paid on reserves.
Saturn square Pluto reflects how Fed policy is causing hardship for insurance companies as investment income cannot help to offset claim losses, pressuring premium rates to rise. Additionally, pension shortfalls are not being helped by extraordinarily low interest rates for an extended period of time. Individuals have to save more money for retirement to make up for the lost interest income. Retirees have far less interest income to spend.
Fidelity reported a record number of hardship withdrawals from 401(k) plans in the second quarter, citing medical expenses as a reason individuals took money out of their retirement savings. (The high medical costs to keep our “free market” healthcare system going are never factored into inflation and neither is its drag on GDP.)
Individual investors shunning stocks for Treasuries in the belief that they can’t lose their initial investment (principal) are not taking into account two important factors. First, if they need to cash out prior to maturity or invest in a mutual fund that trades fixed income, their withdrawals could represent losses before maturity. Secondly, their purchasing power would obviously be eroded with interest rates below the rate of inflation for the majority of time they’re invested.
Mercury the planet of communication, commerce, and movement turned retrograde in its home sign Virgo at 3:59 PM EDT Friday. Miscommunications and reversals can be more likely to occur while Mercury is retrograde until September 12.
Mercury turned retrograde squaring the Federal Reserve’s natal Venus in Sagittarius and Fed Chairman Bernanke’s natal Sun in Sagittarius, indicating the central bank and its Chairman could come under criticism over its latest monetary policy gambit. If a Bloomberg story published yesterday is accurate, it would indicate the Fed has reversed their own policy back to purchasing longer dated Treasuries alluded to in the FOMC statement rather than the 2-10 year maturities stated on the NY Fed’s fact sheet.
Summary Of This Week’s Influences:
Monday marks the first full trading day that Mercury is retrograde. Mercury retrograde can temporarily reverse the trends in place prior to retrograde. Many times Mercury retrograde brings choppy trading that keeps the market range bound for three weeks. Any trends that emerge now could reverse when the Sun conjoins Mercury at the halfway point of the cycle on September 3. (Virgo rules the work force; the August employment report will be released five minutes before their conjunction.)
The Sun (speculation) enters Virgo early Monday morning until September 22 putting the central focus on job creation, healthcare, diet, hygiene, schedules/daily routines, and the armed services. Virgo is both the accountant and the analyst who scrutinizes every detail to discern what’s really important.
Mercury retrograde in Virgo is only likely to increase the mixed messages. Data feeds display inaccurate information and media outlets could be reporting rumors rather than facts, especially around August 24-25. New deals announced during retrograde are more likely to fall through. But the good thing about Mercury retrograde is that information that was overlooked is revealed.
The Moon in Uranus-ruled Aquarius Monday could accentuate the choppy and erratic behavior the market tends to exhibit when Mercury is retrograde.
The Moon will be in Pisces Tuesday through Thursday. The Pisces Full Moon occurs on Tuesday at 1:04 PM EDT. What has been obscured will be revealed now. Neptune-ruled Pisces likes to blur the boundaries and can make rumor appear to be fact as part of the propaganda. Deceptive and fraudulent activities might occur now. The credit, oil, chemical, drugs, hospitals, and film industries could be in the spotlight.
Since Pisces rules the sea, the Full Moon increases the potential for precipitation and storms. August 24 marks the 18th anniversary of Hurricane Andrew. The East Coast, especially VA, NC, and Florida could experience coastal storms. Other countries that could be impacted by storms are Cuba, Jamaica, Panama, Colombia, Ecuador, and Peru.
Kansas City FRB president Thomas Hoenig is the host for the Fed’s annual confab in Jackson Hole, Wyoming Thursday to Saturday. This year’s conference theme is “Macroeconomic Challenges: The Decade Ahead” which correlates to the decade between 2010 when Jupiter and Saturn are in the opposition (Full Moon) phase of the economic cycle, to 2020 when Jupiter and Saturn will conjoin in innovative and revolutionary Aquarius, starting a new 20 year business cycle. Fed Chairman Bernanke will speak Friday morning on “The Economic Outlook and the Federal Reserve’s Policy Response.” It would be far more interesting for Bernanke and Hoenig to engage in a public debate on monetary policy.
After being told at last year’s gathering the astronomy club would be hosting a night of stargazing for attendees, Bernanke asked Kansas City Fed president Thomas Hoenig: “Do you know if they do astrology? It couldn’t hurt.” Although the stargazing is back on the agenda again this year, it is unfortunate that it will probably take at least another decade before astrology is presented at Jackson Hole.
Monday, August 23, 2010
Seesaws between moderately positive to moderately negative; closes mixed.
Tuesday, August 24, 2010
Negative to mixed conditions improve to positive. Loses momentum and becomes choppy in last hour closing mixed to moderately positive.
Wednesday, August 25, 2010
Positive conditions weaken approaching the close; ends moderately negative.
Thursday, August 26, 2010
Positive trend bias.
Friday, August 27, 2010
Improving conditions as day progresses; ends positive.
*Uranus will exactly square Pluto 2012-2015.
**The other signs in the earth element are Taurus and Capricorn.
Bloomberg radio reported on Friday that Goldman Sachs (GS) took physical delivery of uranium. This gives a whole new meaning to the firm’s mantra that “we are not a retail bank.” The fact that Iran began loading its nuclear reactor the following day is pure coincidence as GS no doubt has more lucrative deals in mind. And if those potential deals fall through maybe Bernanke would buy the uranium to put in his virtually empty toolkit. The cure for “unusual uncertainty” is Uranus-ruled uranium since at that point Bernanke could rightfully claim he has the nuclear option!
Now we’re getting a little bit ahead of ourselves as the influence of Uranus squaring Pluto (nuclear issues) won’t start to become a strong influence until later in 2011.* Now it’s time to get back to what happened last week (which will return back to the Fed’s doorstep anyway).
As described in the Weekly Forecast, Jupiter opposing Saturn and Saturn squaring Pluto did bring large intraday moves in the major indices every day last week. Jupiter’s preference to see the glass as half full only prevailed on Tuesday and Wednesday when the Moon (sentiment) was in Jupiter-ruled Sagittarius. The Dow hit its intraday high Tuesday when Minneapolis FRB president Narayana Kocherlakota (a non FOMC voting member) said the Fed doesn’t have any new doubts about the economic recovery and he doesn’t believe deflation is a possibility. (So why is the Fed buying more Treasuries other than to appease PIMCO's Bill Gross and certain Wall Street heavies?)
Once Saturn-ruled Capricorn took charge Thursday and Friday, the glass was now half empty. Giant Jupiter is no match for Saturn when the lord of the rings is also involved with Pluto the wealthy lord of the underworld in Saturn-ruled Capricorn. Jupiter just ends up exaggerating Saturn’s fears.
Jupiter (expansion/optimism) and Saturn (contraction/fear) are the two leading economic indicators. Their opposition cycle tends to occur during times of economic recession. Combined with Saturn squaring Pluto, sentiment is pulled to the negative side and is only being supported by the Fed’s overly accommodative policies.
Thanks to the Fed, US corporations have been borrowing cheaply and have built a mountain of cash equal to the Fed’s $2 trillion balance sheet. But instead of using the cash to grow (Jupiter) organically, companies have primarily exhibited a desire to use their excess cash for acquisitions. This results in further economic contraction (Saturn) as unemployment rises when many of the workers at the acquired company are laid off. And there’s no need to worry about deflation since acquisitions limit competition, allowing companies to raise prices.
Pluto rules M&A; its specialty is the hostile takeover. Jupiter’s optimism opposing Saturn’s limitations and squaring Pluto got the merger mania started last week when BHP Billiton (BHP) made a $38.6 billion unsolicited offer for Potash Corp (POT). Then Intel (INTC) announced its biggest acquisition ever in acquiring McAfee (MFE) in a $7.68 billion all cash deal. Soon it will likely cost more to dispose of your trash if you use Hefty brand bags since Rank Group is acquiring Pactiv (PTV) for $4.6 billion.
Venus rules banking. Venus conjoining Mars in the marriage sign Libra for the first time since the shotgun weddings during the financial crisis reflected that banks are getting back in the act as First Niagara Financial Group agreed to acquire NewAlliance Bancshares for $1.5 billion. (A Wall Street Journal article about the deal notes that bank mergers probably won’t accelerate until next year which correlates to when Jupiter transits banking sign Taurus June 2011-June 2012.)
As Saturn and Pluto begin to separate from their frictional square for the final time, it will be interesting to see if the fear driven mania for buying government and corporate debt at the current ridiculously low yields continues unabated or begins to top off.
The Fed is trying to do everything it possibly can to push people into spending and making risky investments. This is why the Dow is only down 2.1% year to date and crude oil is still trading over $70/barrel despite the fact that inventories are at their highest levels since November 1983. People want to be invested in hard assets as a protection against future inflation.
The reality is that the supposedly astute investors in long term Treasury securities think they will know when to sell, achieving a smart capital gain before the bottom falls out of the Treasury bubble. They will aptly tell you that nobody in their right mind believes they will be invested in Treasuries for the long haul. But doesn’t this sound like a repeat of the real estate market before the bubble burst? The same parallels can be drawn in oil and gold.
An op-ed piece in Thursday’s Wall Street Journal (“Bye-Bye to the Fed-Funds Rate”) by Benn Steil and Paul Swartz discusses the inability of the Federal Reserve to control both the Fed funds rate and the money supply. Given the current excess bank reserves sitting at the Fed surpasses $1 trillion, the Fed cannot both maintain a low interest rate and prevent the sudden exit of this excess liquidity into the economy. The article states that the Fed would have no choice politically but to target interest rates at the expense of the money supply, concluding that the ECB was unable to tempt Eurozone banks to maintain excess reserves at a paltry 1% interest.
When US banks are ready to start employing their excess reserves, the Fed’s interest on these would have to surpass the economic value to the banks in order to control the money supply. The choice being to let $1 trillion times an accelerated velocity of money escape or substantially raise the Fed funds rate through interest paid on reserves to an “extraordinary” level. Steil and Swartz provide one of the best explanations of these forces I have ever read. The problem is accentuated if the Fed starts a new phase of quantitative easing on the same scale as its original phase. Preventing $2 trillion in excess reserves from escaping would require an even higher interest rate paid on reserves.
Saturn square Pluto reflects how Fed policy is causing hardship for insurance companies as investment income cannot help to offset claim losses, pressuring premium rates to rise. Additionally, pension shortfalls are not being helped by extraordinarily low interest rates for an extended period of time. Individuals have to save more money for retirement to make up for the lost interest income. Retirees have far less interest income to spend.
Fidelity reported a record number of hardship withdrawals from 401(k) plans in the second quarter, citing medical expenses as a reason individuals took money out of their retirement savings. (The high medical costs to keep our “free market” healthcare system going are never factored into inflation and neither is its drag on GDP.)
Individual investors shunning stocks for Treasuries in the belief that they can’t lose their initial investment (principal) are not taking into account two important factors. First, if they need to cash out prior to maturity or invest in a mutual fund that trades fixed income, their withdrawals could represent losses before maturity. Secondly, their purchasing power would obviously be eroded with interest rates below the rate of inflation for the majority of time they’re invested.
Mercury the planet of communication, commerce, and movement turned retrograde in its home sign Virgo at 3:59 PM EDT Friday. Miscommunications and reversals can be more likely to occur while Mercury is retrograde until September 12.
Mercury turned retrograde squaring the Federal Reserve’s natal Venus in Sagittarius and Fed Chairman Bernanke’s natal Sun in Sagittarius, indicating the central bank and its Chairman could come under criticism over its latest monetary policy gambit. If a Bloomberg story published yesterday is accurate, it would indicate the Fed has reversed their own policy back to purchasing longer dated Treasuries alluded to in the FOMC statement rather than the 2-10 year maturities stated on the NY Fed’s fact sheet.
Summary Of This Week’s Influences:
Monday marks the first full trading day that Mercury is retrograde. Mercury retrograde can temporarily reverse the trends in place prior to retrograde. Many times Mercury retrograde brings choppy trading that keeps the market range bound for three weeks. Any trends that emerge now could reverse when the Sun conjoins Mercury at the halfway point of the cycle on September 3. (Virgo rules the work force; the August employment report will be released five minutes before their conjunction.)
The Sun (speculation) enters Virgo early Monday morning until September 22 putting the central focus on job creation, healthcare, diet, hygiene, schedules/daily routines, and the armed services. Virgo is both the accountant and the analyst who scrutinizes every detail to discern what’s really important.
Mercury retrograde in Virgo is only likely to increase the mixed messages. Data feeds display inaccurate information and media outlets could be reporting rumors rather than facts, especially around August 24-25. New deals announced during retrograde are more likely to fall through. But the good thing about Mercury retrograde is that information that was overlooked is revealed.
The Moon in Uranus-ruled Aquarius Monday could accentuate the choppy and erratic behavior the market tends to exhibit when Mercury is retrograde.
The Moon will be in Pisces Tuesday through Thursday. The Pisces Full Moon occurs on Tuesday at 1:04 PM EDT. What has been obscured will be revealed now. Neptune-ruled Pisces likes to blur the boundaries and can make rumor appear to be fact as part of the propaganda. Deceptive and fraudulent activities might occur now. The credit, oil, chemical, drugs, hospitals, and film industries could be in the spotlight.
Since Pisces rules the sea, the Full Moon increases the potential for precipitation and storms. August 24 marks the 18th anniversary of Hurricane Andrew. The East Coast, especially VA, NC, and Florida could experience coastal storms. Other countries that could be impacted by storms are Cuba, Jamaica, Panama, Colombia, Ecuador, and Peru.
Kansas City FRB president Thomas Hoenig is the host for the Fed’s annual confab in Jackson Hole, Wyoming Thursday to Saturday. This year’s conference theme is “Macroeconomic Challenges: The Decade Ahead” which correlates to the decade between 2010 when Jupiter and Saturn are in the opposition (Full Moon) phase of the economic cycle, to 2020 when Jupiter and Saturn will conjoin in innovative and revolutionary Aquarius, starting a new 20 year business cycle. Fed Chairman Bernanke will speak Friday morning on “The Economic Outlook and the Federal Reserve’s Policy Response.” It would be far more interesting for Bernanke and Hoenig to engage in a public debate on monetary policy.
After being told at last year’s gathering the astronomy club would be hosting a night of stargazing for attendees, Bernanke asked Kansas City Fed president Thomas Hoenig: “Do you know if they do astrology? It couldn’t hurt.” Although the stargazing is back on the agenda again this year, it is unfortunate that it will probably take at least another decade before astrology is presented at Jackson Hole.
Monday, August 23, 2010
Seesaws between moderately positive to moderately negative; closes mixed.
Tuesday, August 24, 2010
Negative to mixed conditions improve to positive. Loses momentum and becomes choppy in last hour closing mixed to moderately positive.
Wednesday, August 25, 2010
Positive conditions weaken approaching the close; ends moderately negative.
Thursday, August 26, 2010
Positive trend bias.
Friday, August 27, 2010
Improving conditions as day progresses; ends positive.
*Uranus will exactly square Pluto 2012-2015.
**The other signs in the earth element are Taurus and Capricorn.
WallStreetWeather.net Forecast For Week Of August 15, 2010
Summary Of Last Week's Influences:
After closing moderately higher on Monday, the major indices closed negative for the rest of the week following the Fed’s downgrade of the economy and halting the wind down of its $2 trillion balance sheet.
Last week’s market downturn reflects that the final opposition of Saturn and Uranus was consistent with the downturn following the previous four alignments during this almost two year cycle that began on Election Day 2008.
Summary Of This Week’s Influences:
Jupiter opposite Saturn and Saturn square Pluto are a negative influence on the market. And now these two planetary alignments will occur within the same week.
Monday will be the second of three times that Jupiter (expansion) and Saturn (contraction) will oppose each other. Jupiter/Saturn oppositions occur every 20 years and tends to mark a recession.
Jupiter was in Pisces opposing Saturn in Virgo during their first opposition on May 23. Jupiter (international matters) opposite Saturn (government) indicates global issues will dominate market behavior. Planets in opposition are in their “Full Moon” phase, and global markets certainly were in the throes of Full Moon fever over Europe’s sovereign debt crisis then.
As Jupiter opposes Saturn once again, nervousness about the Eurozone is being rekindled after Q2 Eurozone GDP last Friday showed stronger than expected growth in Germany but contraction in Greece. Jupiter opposite Saturn describes economic imbalances that need to be brought back into equilibrium. Wringing out the excesses (Jupiter) takes time (Saturn) as these two planets engage in a push/pull between quick fixes (Jupiter) vs. belt tightening measures (Saturn).
Jupiter in Aries opposite Saturn in Libra together with Saturn squaring Pluto (debt) are impacting the USA’s natal Venus (money/banking) in Cancer now, indicating the US economy and the policies of the nation’s central bank are the primary focus of concern now. While Europe is working with these energies by adopting austerity measures to reduce debt levels and enacting policies to build a more sustainable economic structure, US monetary and fiscal policies reflect a lack of restraint for fear it would trigger a double dip recession. With the opposition of this planetary pair occurring in the early degrees of the cardinal (initiating) signs Aries and Libra now and for a final time on March 28, attempts at recreating the old economic model will only prolong the recession.
Jupiter opposite Saturn expands efforts to control illegal immigration as the opposition of these planets increases nationalistic tendencies. The Obama bashing Wall Street Journal recently reported the Administration deported 60% more criminal aliens this year versus a comparable period during the Bush Administration. On Friday President Obama signed a $600 million bill to increase border surveillance after quickly passing Congress with strong bipartisan support.
Jupiter’s girth and Saturn’s rings of restriction are no match for Pluto despite the fact that Pluto is not even technically considered a planet anymore in certain circles. Powerful Pluto transits demand nothing less than total transformation. The choice is whether it is accomplished voluntarily or by force.
And there’s a LOT of stuff to be transformed between now and 2024 with the heavy lifting occurring during 2008-2015. All types of debt from sovereign to mortgages to structured products will have to be addressed. Insurance, taxes, corporate welfare, pensions, and governments will undergo massive structural transformation.
Saturn will square Pluto for the third and final time Saturday (Saturn’s day). Saturn is government and Pluto is debt. With Pluto in Saturn-ruled Capricorn, the concerns relate to sovereign debt (including government guarantees on commercial debt). This time it is the US that is primarily in the hot seat.
After Saturn first squared Pluto November 15, the Dubai government asked creditors to allow government conglomerate Dubai World to freeze (Saturn) making payments on $60 billion in debt. The second time Saturn squared Pluto on January 31 was preceded by a Solar Eclipse in Saturn-ruled Capricorn which affected Greece and started the sovereign debt crisis in Europe.
The Fed maintaining rates at close to zero for an “extended period of time” and preventing its balance sheet from shrinking by purchasing Treasuries reflects a fear of fear. Rather than helping the economy grow (Jupiter), the Fed’s words and deeds will cause the economy to shrink (Saturn).
Jupiter has exaggerated Saturn’s fear as investors buy government debt (Pluto) at the same time they complain about the deficit. In desperation for a slightly higher yield, junk bonds are being snapped up as if they’re FDIC-insured CDs.
All the focus on Jupiter, Saturn, Uranus, and Pluto has left Neptune back in the fog. Neptune rules bubbles. The Sun in Leo (speculation) opposing Neptune in Aquarius Friday at the same time Saturn squares Pluto could reflect that the bond bubble might be getting close to bursting. Neptune puts the focus on issues relating to credit, oil, fraudulent activities committed by people in leadership positions, and waking up to our illusions. All this is leading up to the Full Moon in Neptune-ruled Pisces August 24.
Mercury turning retrograde Friday at 3:59 PM until September 12 can prompt a review of government policies related to employment, healthcare, and the armed forces as this is a time to review and revise past actions rather than move forward with new issues.
The Moon is a key gauge to determine the mood of the market. The Moon transiting Pluto-ruled Scorpio (Monday), Jupiter-ruled Sagittarius (Tuesday until 10:17 AM EDT Thursday), and Saturn-ruled Capricorn (Thursday until 9:37 AM Saturday) intensifies the effects of the alignments between Jupiter, Saturn, and Pluto.
The First Quarter Moon in Scorpio Monday at 2:14 PM EDT heightens tensions and brings secrets to the surface related to Pluto-ruled matters. What occurs now will be reactivated during the Last Quarter Moon on September 1.
Jupiter opposite Saturn today can increase geopolitical tensions over territorial disputes and invading boundaries. As I pointed out in the post on the Jupiter/Saturn opposition (see link above), North Korea is particularly affected by this influence.
Pluto and Scorpio rule nuclear power. Russia is scheduled to begin loading fuel into Iran’s nuclear reactor in Bushehr as Saturn exactly squares Pluto Saturday after years of delays (Saturn)! The Quarter Moon squaring Israel’s Taurus Sun and conjoining its progressed Scorpio Moon together with Uranus in Pisces opposing natal Mars in Virgo and Mercury turning retrograde squaring progressed Jupiter in Virgo, elevates the possibility that Israel could launch a surprise pre-emptive strike to take out the reactor. As Jupiter opposed Saturn May 23, tensions between Israel and Turkey erupted after Israeli commandos stormed a Turkish aid flotilla that violated Israel’s blockade of Gaza, killing 9 passengers. Turkey, Syria, and Russia are also in the spotlight at this time.
Increased volatility and larger market moves are likely this week that take the market lower than where it began. Strong intraday reversals are possible, especially during the latter half of the week. Since Mercury retrograde can temporarily reverse current trends or keep the market trading in a tight range, the downtrend could restart after Mercury turns direct September 12 and all the energies of Jupiter, Saturn, Uranus, and Pluto are centered around the Autumnal Equinox on September 22. The “Full Moon effect” of the Autumnal Equinox has a tendency to put markets on edge; the Full Moon at zero degrees Aries is likely to exacerbate the anxiety and macro events to fret over. Such as the September 21 FOMC meeting.
Monday, August 16, 2010
Negative.
Tuesday, August 17, 2010
Positive.
Wednesday, August 18, 2010
Improving conditions as day progresses but could rapidly weaken at the close.
Thursday, August 19, 2010
Negative bias.
Friday, August 20, 2010 (Options expiration)
Venus conjoining Mars in Libra on Venus-ruled Friday emphasizes the financial sector and business alliances/partnerships. Negative conditions improve as the morning progresses. With Mercury turning retrograde one minute before the market closes, anything could happen. But with the Moon in Capricorn and Saturn squaring Pluto, any gain the market makes could reverse back to negative again at the close.
After closing moderately higher on Monday, the major indices closed negative for the rest of the week following the Fed’s downgrade of the economy and halting the wind down of its $2 trillion balance sheet.
Last week’s market downturn reflects that the final opposition of Saturn and Uranus was consistent with the downturn following the previous four alignments during this almost two year cycle that began on Election Day 2008.
Summary Of This Week’s Influences:
Jupiter opposite Saturn and Saturn square Pluto are a negative influence on the market. And now these two planetary alignments will occur within the same week.
Monday will be the second of three times that Jupiter (expansion) and Saturn (contraction) will oppose each other. Jupiter/Saturn oppositions occur every 20 years and tends to mark a recession.
Jupiter was in Pisces opposing Saturn in Virgo during their first opposition on May 23. Jupiter (international matters) opposite Saturn (government) indicates global issues will dominate market behavior. Planets in opposition are in their “Full Moon” phase, and global markets certainly were in the throes of Full Moon fever over Europe’s sovereign debt crisis then.
As Jupiter opposes Saturn once again, nervousness about the Eurozone is being rekindled after Q2 Eurozone GDP last Friday showed stronger than expected growth in Germany but contraction in Greece. Jupiter opposite Saturn describes economic imbalances that need to be brought back into equilibrium. Wringing out the excesses (Jupiter) takes time (Saturn) as these two planets engage in a push/pull between quick fixes (Jupiter) vs. belt tightening measures (Saturn).
Jupiter in Aries opposite Saturn in Libra together with Saturn squaring Pluto (debt) are impacting the USA’s natal Venus (money/banking) in Cancer now, indicating the US economy and the policies of the nation’s central bank are the primary focus of concern now. While Europe is working with these energies by adopting austerity measures to reduce debt levels and enacting policies to build a more sustainable economic structure, US monetary and fiscal policies reflect a lack of restraint for fear it would trigger a double dip recession. With the opposition of this planetary pair occurring in the early degrees of the cardinal (initiating) signs Aries and Libra now and for a final time on March 28, attempts at recreating the old economic model will only prolong the recession.
Jupiter opposite Saturn expands efforts to control illegal immigration as the opposition of these planets increases nationalistic tendencies. The Obama bashing Wall Street Journal recently reported the Administration deported 60% more criminal aliens this year versus a comparable period during the Bush Administration. On Friday President Obama signed a $600 million bill to increase border surveillance after quickly passing Congress with strong bipartisan support.
Jupiter’s girth and Saturn’s rings of restriction are no match for Pluto despite the fact that Pluto is not even technically considered a planet anymore in certain circles. Powerful Pluto transits demand nothing less than total transformation. The choice is whether it is accomplished voluntarily or by force.
And there’s a LOT of stuff to be transformed between now and 2024 with the heavy lifting occurring during 2008-2015. All types of debt from sovereign to mortgages to structured products will have to be addressed. Insurance, taxes, corporate welfare, pensions, and governments will undergo massive structural transformation.
Saturn will square Pluto for the third and final time Saturday (Saturn’s day). Saturn is government and Pluto is debt. With Pluto in Saturn-ruled Capricorn, the concerns relate to sovereign debt (including government guarantees on commercial debt). This time it is the US that is primarily in the hot seat.
After Saturn first squared Pluto November 15, the Dubai government asked creditors to allow government conglomerate Dubai World to freeze (Saturn) making payments on $60 billion in debt. The second time Saturn squared Pluto on January 31 was preceded by a Solar Eclipse in Saturn-ruled Capricorn which affected Greece and started the sovereign debt crisis in Europe.
The Fed maintaining rates at close to zero for an “extended period of time” and preventing its balance sheet from shrinking by purchasing Treasuries reflects a fear of fear. Rather than helping the economy grow (Jupiter), the Fed’s words and deeds will cause the economy to shrink (Saturn).
Jupiter has exaggerated Saturn’s fear as investors buy government debt (Pluto) at the same time they complain about the deficit. In desperation for a slightly higher yield, junk bonds are being snapped up as if they’re FDIC-insured CDs.
All the focus on Jupiter, Saturn, Uranus, and Pluto has left Neptune back in the fog. Neptune rules bubbles. The Sun in Leo (speculation) opposing Neptune in Aquarius Friday at the same time Saturn squares Pluto could reflect that the bond bubble might be getting close to bursting. Neptune puts the focus on issues relating to credit, oil, fraudulent activities committed by people in leadership positions, and waking up to our illusions. All this is leading up to the Full Moon in Neptune-ruled Pisces August 24.
Mercury turning retrograde Friday at 3:59 PM until September 12 can prompt a review of government policies related to employment, healthcare, and the armed forces as this is a time to review and revise past actions rather than move forward with new issues.
The Moon is a key gauge to determine the mood of the market. The Moon transiting Pluto-ruled Scorpio (Monday), Jupiter-ruled Sagittarius (Tuesday until 10:17 AM EDT Thursday), and Saturn-ruled Capricorn (Thursday until 9:37 AM Saturday) intensifies the effects of the alignments between Jupiter, Saturn, and Pluto.
The First Quarter Moon in Scorpio Monday at 2:14 PM EDT heightens tensions and brings secrets to the surface related to Pluto-ruled matters. What occurs now will be reactivated during the Last Quarter Moon on September 1.
Jupiter opposite Saturn today can increase geopolitical tensions over territorial disputes and invading boundaries. As I pointed out in the post on the Jupiter/Saturn opposition (see link above), North Korea is particularly affected by this influence.
Pluto and Scorpio rule nuclear power. Russia is scheduled to begin loading fuel into Iran’s nuclear reactor in Bushehr as Saturn exactly squares Pluto Saturday after years of delays (Saturn)! The Quarter Moon squaring Israel’s Taurus Sun and conjoining its progressed Scorpio Moon together with Uranus in Pisces opposing natal Mars in Virgo and Mercury turning retrograde squaring progressed Jupiter in Virgo, elevates the possibility that Israel could launch a surprise pre-emptive strike to take out the reactor. As Jupiter opposed Saturn May 23, tensions between Israel and Turkey erupted after Israeli commandos stormed a Turkish aid flotilla that violated Israel’s blockade of Gaza, killing 9 passengers. Turkey, Syria, and Russia are also in the spotlight at this time.
Increased volatility and larger market moves are likely this week that take the market lower than where it began. Strong intraday reversals are possible, especially during the latter half of the week. Since Mercury retrograde can temporarily reverse current trends or keep the market trading in a tight range, the downtrend could restart after Mercury turns direct September 12 and all the energies of Jupiter, Saturn, Uranus, and Pluto are centered around the Autumnal Equinox on September 22. The “Full Moon effect” of the Autumnal Equinox has a tendency to put markets on edge; the Full Moon at zero degrees Aries is likely to exacerbate the anxiety and macro events to fret over. Such as the September 21 FOMC meeting.
Monday, August 16, 2010
Negative.
Tuesday, August 17, 2010
Positive.
Wednesday, August 18, 2010
Improving conditions as day progresses but could rapidly weaken at the close.
Thursday, August 19, 2010
Negative bias.
Friday, August 20, 2010 (Options expiration)
Venus conjoining Mars in Libra on Venus-ruled Friday emphasizes the financial sector and business alliances/partnerships. Negative conditions improve as the morning progresses. With Mercury turning retrograde one minute before the market closes, anything could happen. But with the Moon in Capricorn and Saturn squaring Pluto, any gain the market makes could reverse back to negative again at the close.
Federal Reserve Destroys Its Credibility and Independence
Published by WallStreetWeather.netAfter months of telling the world it is in the process of unwinding its $2.054 trillion balance sheet, the Federal Reserve announced August 10 it is reversing course from a slightly tightening bias to a neutral stance by “reinvesting principal payments from agency debt and agency mortgage-backed securities.” Starting next week, the Fed will use the estimated $10 billion a month it receives from these principal payments to purchase Treasuries with maturities between 2 and 10 years.
In the current Weekly Forecast I explained that Uranus in Aries exactly squaring the Fed’s natal Pluto Tuesday together with the cycle of Jupiter opposite Saturn reflected that the August 10 FOMC meeting would be a crucial test for gauging the central bank’s independence. Once again the Fed demonstrated their readiness to appease Wall St. as well as those in Washington who want monetary policy to do what has become politically unpalatable through fiscal policy.
In “Bernanke Tells Wall Street The Fed’s Hands Are Tied” I explained why there is little meaningful action the Fed can take to boost the economy with such an extremely accommodative monetary policy already in place. But the Fed showed it was more concerned with expressing the energies of the Jupiter/Saturn opposition.
Oppositions require balancing two seemingly disparate yet complementary energies. Planets in Aries tend to be too impatient to take a wait and see approach and planets in Libra can be too eager to please and overly concerned with what other people think. By reinvesting the principal, Bernanke believed he could appease Wall St.’s desire for additional stimulus (Jupiter) without being accused of printing more money. Saturn in Venus-ruled Libra reflects the pressure to placate everyone by keeping the Fed’s balance sheet neutral. Venus (money/banking) and Mars (action) in Libra for the first time since Lehman Brothers collapsed is once again motivating the Fed to pull out all the stops to keep the economy from deflating.
With his Sun in Jupiter-ruled Sagittarius opposing natal Jupiter in Mercury-ruled Gemini, together with Mercury and Venus in Sagittarius, Bernanke’s brain will automatically default to inflating the money supply. Natal Mars and Neptune conjoining in Libra means his actions inflate bubbles.
Jupiter in Aries opposite Saturn in Libra together with Venus and Mars in Libra reflects that Bernanke had to appease other FOMC members and FRB presidents who are uncomfortable with the Fed owning mortgage securities on its balance sheet by rolling over the principal on these securities into Treasuries so the Fed’s holdings of agency debt and MBS on the Fed’s balance sheet continue to shrink.
Saturn in Libra squaring Pluto in Capricorn also reflects the Fed’s decision to buy Treasuries which serve as an alternative currency for financial transactions. The Fed’s purchases will lower Treasury yields which in turn will push more investors into buying mortgage securities to obtain a slightly higher yield. This would reduce borrowing costs that are already at historic lows.
Saturn square Pluto indicates Fed policy is only benefiting a limited number of borrowers and corporations who have the very best credit and sufficient collateral. Since these companies and borrowers already have locked in low interest rate loans, most are taking advantage to refinance or hoard cash while they can sell debt at rock bottom rates. Johnson & Johnson (JNJ) just sold $550 million in 10 year bonds at 2.95% and an equal amount in 30 year bonds paying only 4.50% interest!
The Fed is pumping up profits at the largest and wealthiest corporations and financial institutions at everyone else’s expense, busting Libra’s scales from being tilted so far in one direction. Savers and particularly seniors living on a fixed income are suffering. To add insult to injury, the Fed won’t even directly purchase Treasuries from the government. Instead the primary dealers who include “too big to fail” Bank of America (BAC), Citigroup (C), Goldman Sachs (GS), JPMorgan Chase (JPM), and Morgan Stanley (MS) purchase Treasuries from the government and sell them for a profit to the Fed.
Saturn square Pluto represents fear of sovereign debt. Yet since this cycle began in November 2009, fear of government deficits and lack of fiscal restraint has caused more investors to plough more and more money into…government debt! Jupiter opposing Saturn at the same time Saturn squares Pluto this month exaggerates economic fears. The Fed’s move Tuesday is more likely to frighten banks and companies into hoarding more cash while consumers are focused on reducing their debt and saving.
Uranus in Aries squaring the Fed’s natal Pluto brought some unexpected consequences following the Fed’s announcement to buy Treasuries. Investors began buying 30 year bonds in response to the Fed announcing they will purchase “longer-term” Treasuries, not waiting for the detail sheet released by the NY Fed later Tuesday afternoon outlining the maturities to be purchased. After initially rebounding 100 points following the Fed’s announcement which turned the Dow positive for a second, the market turned down for the rest of the week.
With Uranus strong at zero degrees Aries (the world point) this week, markets reversed and volatility spiked. Instead of pleasing the markets, the Fed’s action was interpreted as a downgrade of the U.S. economy that increased fears around the globe.
Uranus symbolizes the rebel, the person who’s willing to go against the grain. Kansas City FRB president Thomas Hoenig is the rebel with a cause on the FOMC. Hoenig becomes more vocal in his dissent at every meeting. In a must read speech entitled “Hard Choices” given at a town hall meeting in Lincoln Nebraska today, Hoenig said he worries the FOMC’s actions only add to the “uncertainty.”
Jupiter last opposed Saturn during the recession of 1990-1 while Saturn opposed Pluto in 2001. Hoenig cites those past times as examples when interest rates were kept too low for too long. The Fed ended up manifesting what it most feared and is danger of creating another financial crisis through its current actions.
To prevent the Fed from spawning yet another financial crisis, Hoenig has got to get other members to agree with what he’s advocating:
“I am advocating a policy that remains accommodative but slowly firms as the economy itself expands and moves toward more balance. I advocate dropping the “extended period” language from the FOMC’s statement and removing its guarantee of low rates. This tells the market that it must again accept risks and lend if it wishes to earn a return. The FOMC would announce that its policy rate will move to 1 percent by a certain date, subject to current conditions. At 1 percent, the FOMC would pause to give the economy time to adjust and to gain confidence that the recovery remains on a reasonable growth path. At the appropriate time, rates would be moved further up toward 2 percent, after which the nominal fed funds rate will depend on how well the economy is doing.”
Uranus takes 7 years to transit one sign. Hoenig notes that in the spring of 2003 (after Uranus entered Pisces - the sign of market bubbles), was just before the Fed lowered rates to 1% to prevent Japanese-style deflation. Uranus moving back into Pisces tonight until March 11 reflects FOMC member James Bullard’s stance that “The U.S. is closer to a Japanese-style outcome today than at any time in recent history.” As former Fed researcher Stephen Stanley told Bloomberg, the only difference between the Fed’s “quantitative easing” and Japan’s is that Bernanke refers to it as “credit easing.”
Beyond consumer price inflation, I have explained the dangers of excluding asset price inflation in monetary policy. Hoenig explains that with the CPI over 219 vs. 18 in 1945, there is no fear of deflation. Ironically, as the Fed announced it would start purchasing Treasuries, Bloomberg reported Tuesday that Warren Buffett has shifted the duration of Berkshire Hathaway’s (BRK/A) Treasury holdings which would indicate he believes interest rates will rise sooner than expected.
Saturn completing its waning square to Pluto this month exaggerated by Jupiter and taken to the extreme by Uranus indicates that the market’s obsessive fears about deflation will begin to dissipate. As a member of the FOMC in 2003, Thomas Hoenig admits he learned the lesson taught by Saturn square Pluto: “low rates contributed to excessive debt and leverage among consumers, businesses and government.” And now the Fed has fed a bubble in bonds that will likely end just as ugly as the other bubbles before it.
Being Jupiter-ruled, Bernanke prefers a pain-free quick fix. But the alignment of these planets at the beginning degrees of cardinal signs for the first time in centuries signals the old consumer and housing economy dependent on financial alchemy is dying; to be transformed into a new industrial and technology based economy over the next decade. Just as it took years for the bubble to build and burst in 2008, it will take time to recover from such extremes.
There are portions of the economic hangover that only time (Saturn) will heal. For example, the friction in the housing market caused by mortgage liens beyond the economic value of properties is preventing the normal flow of transactions. Only time will cause all of the involved parties to accept losses and get this portion of the economy moving again. Extremely low mortgage rates have reached the point of no longer being an effective stimulant. The lesson Thomas Hoenig is teaching us is that it’s time to let time heal the economic wounds, as Fed action has proven to no longer be effective.
Federal Reserve: December 23, 1913 6:02 PM EST Washington, DC
Ben Bernanke: December 13, 1953 time unknown Augusta, GA
Thomas Hoenig: September 6, 1946 time unknown Fort Madison, IA
WallStreetWeather.net Forecast For Week Of August 8, 2010 “FOMC Surprise Edition”
Monday will be the first trading day with Venus (money/banking/relationships) in its home sign Libra until September 8.* Together with the Sun (speculation) in its home sign Leo, these influences would tend to be favorable for the market.
But right now Venus in Libra’s charm is under stress from Uranus (August 7), Saturn (August 8), Jupiter (August 9), and Pluto (August 10) at the same time these planets are making challenging alignments to each other at the beginning of cardinal (initiating) signs. On Wednesday Venus will square the June 26 Capricorn Lunar Eclipse that brought all these planetary energies together and saw the market decline to the lowest level this year going into the July 4 holiday weekend. Then on Friday the Moon will conjoin Venus and Mars in Libra as the planetary pair conjoin (August 20) for first time since September 2008 as Jupiter opposes Saturn (August 16) and Saturn squares Pluto (August 21), which could spark another selloff leading to new 2010 lows.
New Moons equate to a new beginning. The Leo New Moon occurs on August 9 at 11:08 PM EDT at the time the Moon is the closest to the Earth (perigee) this month. In addition to raising the potential for increased geophysical and geopolitical phenomena, the Leo New Moon could likely bring a shift in speculative strategies.
FOMC Announcement:
The big market melodrama centers around Tuesday at 2:15 PM EDT when the Federal Open Market Committee releases their announcement on monetary policy.
The closer we get closer to the exact alignments involving the major economic indicators Jupiter (expansion/inflation/greed) and Saturn (contraction/deflation/fear) opposing each other August 16 and Saturn squaring Pluto in Capricorn (government debt) August 21, the higher expectations have become that the Fed will provide an indication of some type of increased support to the economy.
Saturn is the more dominant player now due to its simultaneously dual alignments which are enhanced with Pluto in Saturn-ruled Capricorn. Saturn’s strong influence works on Jupiter by exaggerating the fear that economic conditions are contracting which could lead to a double dip recession even though Jupiter opposite Saturn reflects economic growth (Jupiter) is uneven (opposition) and occurring at a slow and moderate pace (Saturn). Fear as well as fear intimidation by those factions who are profiting from Fed policy is at its zenith this month but will gradually subside by mid autumn.
Saturn dominant now also reflects that deflation has become a bigger problem than inflation.
Many market pundits have turned into deflationistas solely on the basis that the M3 money supply is shrinking due to the low velocity of money and the lack of lending by financial institutions. The Fed ended quantitative easing (purchasing Treasuries, agency debt and MBS) in March as banks were recirculating the liquidity back to the Fed’s balance sheet as excess reserves. Bernanke has said that banks are not lending due to reduced collateral value of small and medium sized businesses. Translation: small businesses have no equity left in their personal residences to back business loans, regardless of the profitability or cash flow of those businesses.
Quantitative easing (QE) didn’t work before since all the money ended up back at the Fed, so why would it work now? My posts on “Bernanke Tells Wall Street The Fed’s Hands Are Tied” and “Bullard’s Bipolar Fed Strategy” explain why additional QE would damage the plumbing (Pluto) of the financial system.
Any type of stimulative policy emanating from the Fed now could result in China, Japan, and other foreign buyers (Jupiter) reducing (Saturn) purchases of US debt and mortgage securities (Pluto). China’s captive rating agency has already lowered the credit rating on US debt from AAA to AA citing the federal deficit. More QE would show the rest of the world whose central banks and governments have already embarked on monetary and/or fiscal tightening, that the US lacks the discipline (Saturn) to manage its currency and keep its fiscal house in order.
Savers are already subsidizing low interest rates for individual and corporate borrowers. Since the public views QE as the Fed “printing money,” further moves in this direction will scare the public into thinking the dollar will become worthless. Once the velocity of money begins increasing, the Fed’s ability to contract the money supply will be even more difficult.
The market’s interpretation of Jupiter in Aries opposing Saturn in Libra and squaring Pluto in Capricorn is that the Fed compromise by purchasing new mortgage and/or Treasuries by using the cash from maturing bonds to maintain a steady balance. Investors have pushed Treasury yields down to rates not seen since the height of the financial crisis and even well before that on the bet the Fed will return to QE and/or further elaborate in Tuesday’s FOMC statement what “extended period” means. Despite all the fear, stocks and commodities are holding up in anticipation that further monetary stimulus will push stocks, commodities, and other riskier assets higher.
If businesses are afraid to expand their businesses and hire additional workers and consumers are reluctant to spend, further QE and an extension of the “extended period” of near zero interest rates will likely have the opposite effect as they will interpret the Fed’s message to mean that economic conditions are worse than during the height of the financial crisis!
Although Jupiter opposite Saturn and Saturn square Pluto are in the waning phase of their cycles, they are occurring at the beginning of cardinal (initiating) signs which signifies the transition from the old to the new. Pluto opposing the USA Venus at the same time Venus squares Pluto can indicate that concerns about US sovereign debt becomes the catalyst leading to a decline.
The challenging alignments of Jupiter, Saturn, Uranus, and Pluto at the beginning degrees of cardinal signs are impacting the Fed’s natal Sun in Capricorn (self-identity/the Chairman), opposing natal Pluto in Cancer (debt; undisclosed financial arrangements), and Aries Midheaven (the sign ruling the sector of the chart representing its reputation).
The motto for Uranus is “expect the unexpected.” Uranus at the beginning of Aries is squaring the Fed’s natal Pluto exactly to the minute! Doing what the market wants the Fed to do would not reflect the planetary influences I’ve described since it would not be a surprise or something new.
Uranus represents freedom and independence. As I described in my post on Jupiter opposite Saturn (see link above), the Fed’s independence was on the line in 1951 when Jupiter and Saturn were in opposition. If the Fed does what the market is demanding, its credibility will be destroyed as the public will know without a doubt that the Fed is controlled by Wall St. and PIMCO.
If the Fed really wants to get the economy moving, dropping the “extended period” would create expectations that interest rates will be rising sooner rather than later and generate optimism that the economy is truly on the road to recovery which will in turn spur growth. And prevent the US from emulating Japan.
Monday, August 9, 2010
Negative bias; improves at the close.
Tuesday, August 10, 2010
Negative .
Wednesday, August 11, 2010
Negative conditions turnaround in afternoon; closes positive.
Thursday, August 12, 2010
Swings from negative to choppy/mixed to moderately positive.
Friday, August 13, 2010
Shocks and intraday reversals are more likely today with Uranus back at zero degrees Aries before shifting back into Pisces late this evening until March 11; closes negative.
*Venus will return to Libra November 7-29 due to Venus retrograde October 8 to November 18.
But right now Venus in Libra’s charm is under stress from Uranus (August 7), Saturn (August 8), Jupiter (August 9), and Pluto (August 10) at the same time these planets are making challenging alignments to each other at the beginning of cardinal (initiating) signs. On Wednesday Venus will square the June 26 Capricorn Lunar Eclipse that brought all these planetary energies together and saw the market decline to the lowest level this year going into the July 4 holiday weekend. Then on Friday the Moon will conjoin Venus and Mars in Libra as the planetary pair conjoin (August 20) for first time since September 2008 as Jupiter opposes Saturn (August 16) and Saturn squares Pluto (August 21), which could spark another selloff leading to new 2010 lows.
New Moons equate to a new beginning. The Leo New Moon occurs on August 9 at 11:08 PM EDT at the time the Moon is the closest to the Earth (perigee) this month. In addition to raising the potential for increased geophysical and geopolitical phenomena, the Leo New Moon could likely bring a shift in speculative strategies.
FOMC Announcement:
The big market melodrama centers around Tuesday at 2:15 PM EDT when the Federal Open Market Committee releases their announcement on monetary policy.
The closer we get closer to the exact alignments involving the major economic indicators Jupiter (expansion/inflation/greed) and Saturn (contraction/deflation/fear) opposing each other August 16 and Saturn squaring Pluto in Capricorn (government debt) August 21, the higher expectations have become that the Fed will provide an indication of some type of increased support to the economy.
Saturn is the more dominant player now due to its simultaneously dual alignments which are enhanced with Pluto in Saturn-ruled Capricorn. Saturn’s strong influence works on Jupiter by exaggerating the fear that economic conditions are contracting which could lead to a double dip recession even though Jupiter opposite Saturn reflects economic growth (Jupiter) is uneven (opposition) and occurring at a slow and moderate pace (Saturn). Fear as well as fear intimidation by those factions who are profiting from Fed policy is at its zenith this month but will gradually subside by mid autumn.
Saturn dominant now also reflects that deflation has become a bigger problem than inflation.
Many market pundits have turned into deflationistas solely on the basis that the M3 money supply is shrinking due to the low velocity of money and the lack of lending by financial institutions. The Fed ended quantitative easing (purchasing Treasuries, agency debt and MBS) in March as banks were recirculating the liquidity back to the Fed’s balance sheet as excess reserves. Bernanke has said that banks are not lending due to reduced collateral value of small and medium sized businesses. Translation: small businesses have no equity left in their personal residences to back business loans, regardless of the profitability or cash flow of those businesses.
Quantitative easing (QE) didn’t work before since all the money ended up back at the Fed, so why would it work now? My posts on “Bernanke Tells Wall Street The Fed’s Hands Are Tied” and “Bullard’s Bipolar Fed Strategy” explain why additional QE would damage the plumbing (Pluto) of the financial system.
Any type of stimulative policy emanating from the Fed now could result in China, Japan, and other foreign buyers (Jupiter) reducing (Saturn) purchases of US debt and mortgage securities (Pluto). China’s captive rating agency has already lowered the credit rating on US debt from AAA to AA citing the federal deficit. More QE would show the rest of the world whose central banks and governments have already embarked on monetary and/or fiscal tightening, that the US lacks the discipline (Saturn) to manage its currency and keep its fiscal house in order.
Savers are already subsidizing low interest rates for individual and corporate borrowers. Since the public views QE as the Fed “printing money,” further moves in this direction will scare the public into thinking the dollar will become worthless. Once the velocity of money begins increasing, the Fed’s ability to contract the money supply will be even more difficult.
The market’s interpretation of Jupiter in Aries opposing Saturn in Libra and squaring Pluto in Capricorn is that the Fed compromise by purchasing new mortgage and/or Treasuries by using the cash from maturing bonds to maintain a steady balance. Investors have pushed Treasury yields down to rates not seen since the height of the financial crisis and even well before that on the bet the Fed will return to QE and/or further elaborate in Tuesday’s FOMC statement what “extended period” means. Despite all the fear, stocks and commodities are holding up in anticipation that further monetary stimulus will push stocks, commodities, and other riskier assets higher.
If businesses are afraid to expand their businesses and hire additional workers and consumers are reluctant to spend, further QE and an extension of the “extended period” of near zero interest rates will likely have the opposite effect as they will interpret the Fed’s message to mean that economic conditions are worse than during the height of the financial crisis!
Although Jupiter opposite Saturn and Saturn square Pluto are in the waning phase of their cycles, they are occurring at the beginning of cardinal (initiating) signs which signifies the transition from the old to the new. Pluto opposing the USA Venus at the same time Venus squares Pluto can indicate that concerns about US sovereign debt becomes the catalyst leading to a decline.
The challenging alignments of Jupiter, Saturn, Uranus, and Pluto at the beginning degrees of cardinal signs are impacting the Fed’s natal Sun in Capricorn (self-identity/the Chairman), opposing natal Pluto in Cancer (debt; undisclosed financial arrangements), and Aries Midheaven (the sign ruling the sector of the chart representing its reputation).
The motto for Uranus is “expect the unexpected.” Uranus at the beginning of Aries is squaring the Fed’s natal Pluto exactly to the minute! Doing what the market wants the Fed to do would not reflect the planetary influences I’ve described since it would not be a surprise or something new.
Uranus represents freedom and independence. As I described in my post on Jupiter opposite Saturn (see link above), the Fed’s independence was on the line in 1951 when Jupiter and Saturn were in opposition. If the Fed does what the market is demanding, its credibility will be destroyed as the public will know without a doubt that the Fed is controlled by Wall St. and PIMCO.
If the Fed really wants to get the economy moving, dropping the “extended period” would create expectations that interest rates will be rising sooner rather than later and generate optimism that the economy is truly on the road to recovery which will in turn spur growth. And prevent the US from emulating Japan.
Monday, August 9, 2010
Negative bias; improves at the close.
Tuesday, August 10, 2010
Negative .
Wednesday, August 11, 2010
Negative conditions turnaround in afternoon; closes positive.
Thursday, August 12, 2010
Swings from negative to choppy/mixed to moderately positive.
Friday, August 13, 2010
Shocks and intraday reversals are more likely today with Uranus back at zero degrees Aries before shifting back into Pisces late this evening until March 11; closes negative.
*Venus will return to Libra November 7-29 due to Venus retrograde October 8 to November 18.
President Obama’s Solar Shift Could Change Economic Perceptions
Published by WallStreetWeather.net
A reader referring to the challenging alignments involving Mars (action), Jupiter (expansion), Saturn (contraction), Uranus (shocks/changes), and Pluto (transformation) at the beginning of cardinal (initiating) signs described in the Weekly Forecast asked: “What is your assessment for President Obama's upcoming year given his 49th birthday on Wednesday is chockablock with these powerful T-squares* in the cardinal signs?”As he celebrated his birthday August 4, those planets were all converging on President Obama’s natal Venus, the planetary ruler of money, banking, and relating to others. Obama’s natal Venus in Cancer conjoins the USA Venus, ensuring that economic issues will continue to be the President’s primary focus.
Pluto in Capricorn has been opposing Obama’s Venus since he took office in January 2009 and will continue to exert its influence until October. Oppositions represent opposing forces; the objective is to find a way to balance and integrate these disparate yet complementary energies.
Pluto rules insurance and the opaque financial transactions that led to the collapse on Wall St. when Pluto entered Saturn-ruled Capricorn in 2008. Despite opposition from Republicans, members of his own Party, lobbyists and industry plutocrats, President Obama passed healthcare and financial reform legislation that despite their flaws, will transform the economy over the next couple of decades.
Pluto rules bankruptcy. Like the Phoenix that rose from the ashes, the President spent his birthday week touting the monumental transformation of the auto industry. Previous administrations had thrown money at the auto industry without requiring fundamental changes from management, labor, or the capital structure. The Administration provided financial assistance to GM and Chrysler with strings attached. Shareholders were wiped out, excess plant and equipment were shed, management replaced, and union wages were made globally competitive. Since exiting bankruptcy, GM and Chrysler have had to compete on their own merits.
Saturn in Venus-ruled Libra squaring Obama’s Venus from October 2009 through August can create difficulties in relating to others - the public in particular with his natal Venus in Moon-ruled Cancer. Saturn can bring blockages, delays, and a mood of overall frustration, while the square aspect motivates action. When Saturn exactly squared his Venus for the second time in mid-March, President Obama made an aggressive push to obtain the support of wavering Democrats to vote for healthcare reform.
Saturn squaring Pluto now describes the current fear and obsession over the lack of a robust economic recovery. Jupiter opposing Saturn at the same time indicates how uneven the recovery has been. Recent signs of economic weakness reflect the Administration’s Jupiter-sized stimulus is wearing off and the realization that the consumer-based economy dependent on financial alchemy cannot be resurrected (Pluto). Jupiter conjoining Uranus in Aries, opposing Saturn and squaring Pluto, indicates it will take time (Saturn) to transform (Pluto) to a new economic model based on tangible products and services.
Since the Federal Reserve has already declared slow economic growth and high unemployment for the next five years (correlating to the revolutionary structural changes underway as Uranus squares Pluto), President Obama’s success or failure rests on the public’s perception of him. And public perception of President Obama is about to shift as his progressed Sun enters Libra on August 24 for the next 30 years.
The Sun describes who we are and our life purpose. While the planetary positions at birth remain our core identity, the birth chart progresses through time with us. With his Sun in its home sign Leo, President Obama shines being a leader. As his progressed Sun evolves into Libra, Obama can express the warmth of his Leo Sun by taking the initiative to reach out to others. His success and public reputation depend upon how well he is able to make the connection. With his progressed Sun in Libra, it is likely that Obama will want the public to recognize him as the president who brought the economy into balance.
Obama’s professional and personal relationships will play and even greater role in the public’s perception of him. The cardinal lineup of planets at his birthday impacting his progressed Libra Sun and Venus in Cancer indicates he needs to make a fresh start as the public does not believe the Administration’s economic policies have helped them directly.
This will require severing ties with his current economic team, especially Larry Summers and Timothy Geithner who represent the failed policies of past Administrations (Saturn) that helped precipitate the financial crisis. The President’s new economic agenda should be comprised of regulators who are consumer friendly. The Moon rules the public, and with her Sun and Uranus in Moon-ruled Cancer conjoining Obama’s natal Venus, appointing Elizabeth Warren to lead the new consumer financial protection agency that she initially conceived would show the public the President has their interests at heart.
Jupiter and Uranus in Mars-ruled Aries squaring natal Venus and opposing his progressed Sun should help embolden Obama to be more assertive despite Libra’s tendency towards being indecisive and easily influenced by others. He must now take bold and decisive action to pay more than lip service to build America’s manufacturing and technological base as an industrial policy.
The danger with these planetary influences is if President Obama is unable to improve the public’s perception of his economic policies, his frustration will likely lead to more overseas adventurism. Venus/Libra is the diplomat who seeks to bring two opposing parties together. These influences could greatly increase Obama’s belief that he will be the President who wins an unwinnable war and brings peace to the most troubled parts of the world. But that cannot happen until the nation is at peace and the economy is in balance.
*The T-square is when planets opposing one another (in this case Jupiter and Uranus opposing Mars and Saturn) all square a third planet (Pluto).
Note to readers leaving comments: Please make your point without resorting to any “technical” jargon be it astrological or market oriented to save me from interpreting comments. Although comments are moderated primarily to block inappropriate language, I have had to reject a few comments left by readers due to excess jargon. Unfortunately in these instances there was no means to contact the person to explain why I did not post their comment.
Barack Obama: August 4, 1961 7:24 PM AHST Honolulu, HI
Elizabeth Warren: June 22, 1949 time unknown Tulsa, OK (The July 11 Cancer Solar Eclipse conjoined Warren’s natal Venus as Jupiter, Saturn, and Uranus square her Sun and Uranus in Cancer. President Obama could appoint her to the position without confirmation while the Senate is in recess until September 13.)
WallStreetWeather.net Forecast For Week Of August 1, 2010
Summary Of Last Week’s Influences:
After falling to the lowest levels of the year July 2, the major indices reversed course after Uranus went retrograde July 5, steadily climbing right into the final alignment of Saturn opposite Uranus on July 26.
The indices have been positive during each of the five alignments between Saturn and Uranus followed by a decline within two to four weeks. The indices made fresh 2010 highs as well as 18 month highs during the April 26 opposition, followed by a low below the close on February 8 at the time Saturn squared Pluto. Exactly one month later at the time Jupiter opposed Saturn, the DJIA closed below its February 8 level. And then the indices dropped to fresh lows for the year on June 7 as Jupiter conjoined Uranus before falling even lower July 2.
With Jupiter, Saturn, Uranus, and Pluto repeating these planetary alignments now, joined by Mars (action) and Venus (money/banking) in Libra triggering their energies as they form challenging alignments to one another between July 30 and August 10, the potential is high that the market will continue to follow the pattern of making lower highs and lower lows as August progresses. However, after the market’s strong July rebound, it now appears unlikely that the indices will reach new 2010 lows by this Friday’s close.
Taking a look at some of the events in the news last week helps to understand these energies at work.
Full Moons shine the spotlight on matters that need our attention as this is the culmination point in the monthly lunar cycle. The July 25 Full Moon in Uranus-ruled Aquarius at the same time as the Saturn/Uranus opposition brought “breakthroughs,” breakouts, and shocks and surprises.
Cyberspace comes under the domain of Uranus and Aquarius. Jupiter (publishing) in Aries (military) squaring Pluto (secrets) in Capricorn (government) together with Saturn (authorities) opposing Uranus the rebel and computer hacker, resulted in WikiLeaks releasing 92,000 classified documents covering the war in Afghanistan to The New York Times and other media outlets. Jupiter in bold and brash Aries squaring Pluto demonstrates the power of individuals to bring transparency to what has been kept secret. The problem is that everything Jupiter does has a tendency to go too far (in this instance by publishing the names of individuals) and Aries tends to rush to action which can be regretted later.
The Moon in Aquarius Monday and Tuesday further energized the influence of Uranus. Saturn represents the elderly while Uranus rules younger people (but really anyone who thinks and acts youthful). The opposition between Saturn and Uranus since Election Day 2008 is to work to get these energies equally balanced by reforming structures that have ceased to properly function. Since four out of five of these oppositions occurred in Virgo and Pisces which rule health matters, it was not surprising that healthcare reform was signed into law during this cycle.
Not that The Wall Street Journal understands by running a front page story July 26 proclaiming “Health Law Augurs Transfer Of Funds From Old to Young.” When Medicare was enacted in 1965 during the previous Saturn/Uranus opposition, Medicare Advantage programs did not exist. But in expanding our “free market” healthcare system in recent years, Congress thought it would be more efficient if the government paid private health insurers to administer Medicare Advantage plans. It turned out to be so “efficient” that the government pays 15% more to private health insurance companies for seniors enrolled in Medicare Advantage plans than the amount the government pays out for seniors enrolled in original Medicare. So in order to help defray the costs to get everyone (that’s the equilibrium of the opposition) when the new health insurance law starts in 2014, the government will be cutting reimbursement rates on Medicare Advantage plans. (No cuts are being made to original Medicare.)
As far as Saturn/Uranus and the generation gap, the article is a very sad commentary that a mother would feel “torn” between the potential of losing her Silver Sneakers gym membership provided through her Humana Gold Medicare Advantage plan versus her diabetic son who because he cannot get insurance, ended up in the hospital after stretching his diabetic supplies too far. As I’ve written, millions of people under 65 in America do not realize how vulnerable they are under our current system that uses taxpayer dollars to prop up health insurance companies’ profits while allowing the insurers to deny coverage to individuals for whatever reason they desire.
The BP oil disaster occurred six days before Saturn opposed Uranus on April 26. As Saturn in Libra opposed Uranus in Aries Monday, a pipeline ruptured (Uranus) in Marshall, Michigan which has spilled over 1 million gallons of crude oil which has gotten into the Kalamazoo River. Saturn reflects the ruptured pipe's age (manufactured in 1969). (This was when Jupiter conjoined Uranus in Aries’ opposite sign Libra). Like BP, it appears that Enbridge Energy Partners was trying to cut corners and save time (Saturn).
With Saturn in Venus-ruled Libra opposing Uranus in Aries during the final opposition, the Basel Committee on Banking Supervision reached a “breakthrough agreement” according to the FT that requires banks to operate under more stringent capital requirements even though banks managed to sweet talk the regulators into loosening some of the elements originally proposed. Saturn rules delays, and full implementation of the agreement will not occur until 2017-18.
Summary Of This Week’s Influences:
The heat wave continues as I had written that a lack of planets in the water element July 22-August 13 would tend to bring higher than normal temperatures, drought, and fires while some parts of the world would be flooded with water.
Jupiter squaring Pluto again on Tuesday as Mars in Libra opposes Jupiter and squares Pluto on Wednesday could really heat up geopolitical events which might be one of the factors contributing to the large and turbulent market moves that could occur this week. Developments in Afghanistan and Pakistan this week could be particularly troublesome. These energies raise the potential for ambitions that know no bounds, attempts to gain power, and nuclear issues.
All of the planetary alignments occurring now affect the USA’s natal Venus (the economy/banking system) as well as the Federal Reserve. These alignments are signaling that major changes are happening now that will begin to reverse market philosophy.
Fed Chairman Bernanke’s July 21 testimony to Congress should be viewed in the same context as when the subprime market turned dow in that a major reversal is approaching. The market hears what it wants to hear, but it is too dangerous for the Fed to go any further with policy accommodation and quantitative easing. St. Louis FRB president James Bullard said that Japan has tried everything to pull their economy out of its lost decade(s). Yeah, everything except raising rates.
If Senators wanted to prevent another Fed induced financial crisis, they will join Sen. Shelby and the five other Senators on the Banking Committee who voted to oppose the nomination of San Francisco FRB president Janet Yellen to be Fed Vice Chairman.
As the heavy Saturn influence begins to dissipate after this month, it will become clearer that inflation should be more of a concern that deflation. India and New Zealand became the latest central banks to raise rates last week. Joachim Fels, co-head of economics at Morgan Stanley (MS) says “inflation is rising” and is more worried about the RISKS resulting from the Fed’s ultra loose monetary policy than a double dip, which he says is “overdone” (Jupiter)! He’s concerned the Fed will allow higher inflation for “some time to help reduce the debt burden.”
Jupiter opposite Saturn and Saturn squaring Pluto indicates that the economy is growing slowly and unevenly; time and patience are needed as there is still a great deal of economic restructuring that will have to take place. Former Fed Chairman Alan Greenspan was on “Meet the Press” this morning, echoing much of my sentiment. Greenspan said that “We’re in a pause in a recovery, a modest recovery, but a pause in the modest recovery feels like a quasi-recession. Our problem basically is that we have a very distorted economy. Any recovery has mostly been limited to large banks, large businesses and high-income individuals who have just had $800 billion added to their 401(k)s, and are spending it and are carrying what consumption there is.”
The July employment report will be released Friday morning. Consensus estimates call for a loss of 70,000 government jobs (mostly due to the Census) and a gain of 100,000 private sector jobs, with the Unemployment Rate rising 0.1% to 9.6%. I think the report could surprise to the upside, boosted by an increase in tech and manufacturing jobs. The largest gains could continue to come from temporary workers. The report could be viewed more negatively as the unemployment rate comes in higher than expected as more people actively look for work.
Monday, August 2, 2010
Negative.
Tuesday, August 3, 2010
Positive and strongest early but weakens and becomes choppy/mixed. Closes negative.
Wednesday, August 4, 2010
Positive trend bias could weaken and turn choppy/mixed to negative going into the close.
Thursday, August 5, 2010
Choppy/mixed; swings between moderately negative to positive.
Friday, August 6, 2010
Mars squaring the June 26 Capricorn Lunar Eclipse could bring more than one reversal today; ends positive.
After falling to the lowest levels of the year July 2, the major indices reversed course after Uranus went retrograde July 5, steadily climbing right into the final alignment of Saturn opposite Uranus on July 26.
The indices have been positive during each of the five alignments between Saturn and Uranus followed by a decline within two to four weeks. The indices made fresh 2010 highs as well as 18 month highs during the April 26 opposition, followed by a low below the close on February 8 at the time Saturn squared Pluto. Exactly one month later at the time Jupiter opposed Saturn, the DJIA closed below its February 8 level. And then the indices dropped to fresh lows for the year on June 7 as Jupiter conjoined Uranus before falling even lower July 2.
With Jupiter, Saturn, Uranus, and Pluto repeating these planetary alignments now, joined by Mars (action) and Venus (money/banking) in Libra triggering their energies as they form challenging alignments to one another between July 30 and August 10, the potential is high that the market will continue to follow the pattern of making lower highs and lower lows as August progresses. However, after the market’s strong July rebound, it now appears unlikely that the indices will reach new 2010 lows by this Friday’s close.
Taking a look at some of the events in the news last week helps to understand these energies at work.
Full Moons shine the spotlight on matters that need our attention as this is the culmination point in the monthly lunar cycle. The July 25 Full Moon in Uranus-ruled Aquarius at the same time as the Saturn/Uranus opposition brought “breakthroughs,” breakouts, and shocks and surprises.
Cyberspace comes under the domain of Uranus and Aquarius. Jupiter (publishing) in Aries (military) squaring Pluto (secrets) in Capricorn (government) together with Saturn (authorities) opposing Uranus the rebel and computer hacker, resulted in WikiLeaks releasing 92,000 classified documents covering the war in Afghanistan to The New York Times and other media outlets. Jupiter in bold and brash Aries squaring Pluto demonstrates the power of individuals to bring transparency to what has been kept secret. The problem is that everything Jupiter does has a tendency to go too far (in this instance by publishing the names of individuals) and Aries tends to rush to action which can be regretted later.
The Moon in Aquarius Monday and Tuesday further energized the influence of Uranus. Saturn represents the elderly while Uranus rules younger people (but really anyone who thinks and acts youthful). The opposition between Saturn and Uranus since Election Day 2008 is to work to get these energies equally balanced by reforming structures that have ceased to properly function. Since four out of five of these oppositions occurred in Virgo and Pisces which rule health matters, it was not surprising that healthcare reform was signed into law during this cycle.
Not that The Wall Street Journal understands by running a front page story July 26 proclaiming “Health Law Augurs Transfer Of Funds From Old to Young.” When Medicare was enacted in 1965 during the previous Saturn/Uranus opposition, Medicare Advantage programs did not exist. But in expanding our “free market” healthcare system in recent years, Congress thought it would be more efficient if the government paid private health insurers to administer Medicare Advantage plans. It turned out to be so “efficient” that the government pays 15% more to private health insurance companies for seniors enrolled in Medicare Advantage plans than the amount the government pays out for seniors enrolled in original Medicare. So in order to help defray the costs to get everyone (that’s the equilibrium of the opposition) when the new health insurance law starts in 2014, the government will be cutting reimbursement rates on Medicare Advantage plans. (No cuts are being made to original Medicare.)
As far as Saturn/Uranus and the generation gap, the article is a very sad commentary that a mother would feel “torn” between the potential of losing her Silver Sneakers gym membership provided through her Humana Gold Medicare Advantage plan versus her diabetic son who because he cannot get insurance, ended up in the hospital after stretching his diabetic supplies too far. As I’ve written, millions of people under 65 in America do not realize how vulnerable they are under our current system that uses taxpayer dollars to prop up health insurance companies’ profits while allowing the insurers to deny coverage to individuals for whatever reason they desire.
The BP oil disaster occurred six days before Saturn opposed Uranus on April 26. As Saturn in Libra opposed Uranus in Aries Monday, a pipeline ruptured (Uranus) in Marshall, Michigan which has spilled over 1 million gallons of crude oil which has gotten into the Kalamazoo River. Saturn reflects the ruptured pipe's age (manufactured in 1969). (This was when Jupiter conjoined Uranus in Aries’ opposite sign Libra). Like BP, it appears that Enbridge Energy Partners was trying to cut corners and save time (Saturn).
With Saturn in Venus-ruled Libra opposing Uranus in Aries during the final opposition, the Basel Committee on Banking Supervision reached a “breakthrough agreement” according to the FT that requires banks to operate under more stringent capital requirements even though banks managed to sweet talk the regulators into loosening some of the elements originally proposed. Saturn rules delays, and full implementation of the agreement will not occur until 2017-18.
Summary Of This Week’s Influences:
The heat wave continues as I had written that a lack of planets in the water element July 22-August 13 would tend to bring higher than normal temperatures, drought, and fires while some parts of the world would be flooded with water.
Jupiter squaring Pluto again on Tuesday as Mars in Libra opposes Jupiter and squares Pluto on Wednesday could really heat up geopolitical events which might be one of the factors contributing to the large and turbulent market moves that could occur this week. Developments in Afghanistan and Pakistan this week could be particularly troublesome. These energies raise the potential for ambitions that know no bounds, attempts to gain power, and nuclear issues.
All of the planetary alignments occurring now affect the USA’s natal Venus (the economy/banking system) as well as the Federal Reserve. These alignments are signaling that major changes are happening now that will begin to reverse market philosophy.
Fed Chairman Bernanke’s July 21 testimony to Congress should be viewed in the same context as when the subprime market turned dow in that a major reversal is approaching. The market hears what it wants to hear, but it is too dangerous for the Fed to go any further with policy accommodation and quantitative easing. St. Louis FRB president James Bullard said that Japan has tried everything to pull their economy out of its lost decade(s). Yeah, everything except raising rates.
If Senators wanted to prevent another Fed induced financial crisis, they will join Sen. Shelby and the five other Senators on the Banking Committee who voted to oppose the nomination of San Francisco FRB president Janet Yellen to be Fed Vice Chairman.
As the heavy Saturn influence begins to dissipate after this month, it will become clearer that inflation should be more of a concern that deflation. India and New Zealand became the latest central banks to raise rates last week. Joachim Fels, co-head of economics at Morgan Stanley (MS) says “inflation is rising” and is more worried about the RISKS resulting from the Fed’s ultra loose monetary policy than a double dip, which he says is “overdone” (Jupiter)! He’s concerned the Fed will allow higher inflation for “some time to help reduce the debt burden.”
Jupiter opposite Saturn and Saturn squaring Pluto indicates that the economy is growing slowly and unevenly; time and patience are needed as there is still a great deal of economic restructuring that will have to take place. Former Fed Chairman Alan Greenspan was on “Meet the Press” this morning, echoing much of my sentiment. Greenspan said that “We’re in a pause in a recovery, a modest recovery, but a pause in the modest recovery feels like a quasi-recession. Our problem basically is that we have a very distorted economy. Any recovery has mostly been limited to large banks, large businesses and high-income individuals who have just had $800 billion added to their 401(k)s, and are spending it and are carrying what consumption there is.”
The July employment report will be released Friday morning. Consensus estimates call for a loss of 70,000 government jobs (mostly due to the Census) and a gain of 100,000 private sector jobs, with the Unemployment Rate rising 0.1% to 9.6%. I think the report could surprise to the upside, boosted by an increase in tech and manufacturing jobs. The largest gains could continue to come from temporary workers. The report could be viewed more negatively as the unemployment rate comes in higher than expected as more people actively look for work.
Monday, August 2, 2010
Negative.
Tuesday, August 3, 2010
Positive and strongest early but weakens and becomes choppy/mixed. Closes negative.
Wednesday, August 4, 2010
Positive trend bias could weaken and turn choppy/mixed to negative going into the close.
Thursday, August 5, 2010
Choppy/mixed; swings between moderately negative to positive.
Friday, August 6, 2010
Mars squaring the June 26 Capricorn Lunar Eclipse could bring more than one reversal today; ends positive.
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