Washington continues to wield its power over Wall Street. Unsure whether to duck for cover or carry on with the rally, the stock market ended slightly up for the week.
As I wrote in last week’s Forecast, “Mars in Pisces (March 14-April 22) can shift from hope and euphoria to hype and hysteria.” House Financial Services Committee member Gary Ackerman’s* “tidal wave of rage” over AIG bonuses is an excellent description of Mars (anger) in Pisces (ocean). Washington’s latest made for TV movie is an attempt to cover up Congress and the current and former Administration’s ineptitude at cleaning up the financial mess. And their trash talking and overly punitive actions against financial institutions who have received government assistance are not going to put these institutions back on the road to recovery anytime soon.
Imagine if Warren Buffett gave interviews to every major media outlet saying how horrid the companies he invests in are and so are the people who work for them! This is exactly what the government is doing to the “taxpayers’” investments in the financials and automakers. If “taxpayers” ever hope to see even a fraction of the money returned to the government, the hysteria needs to simmer down. (Mars is fire and Pisces is water which together equals steam.) The only upside to all this is that now banks and hedge funds are becoming reluctant to take more government money and participate in government lending programs for fear the rules will change later in the game.
I don’t know why the Fed’s actions last Wednesday to purchase up to $300 billion of longer term Treasury securities over the next six months elicited a surprise since I had written the Fed would probably announce the purchases at their January meeting. The Fed’s balance sheet is pushing towards $4 trillion or almost a third the size of the US economy. And here’s the part of the FOMC statement had to have been written by the ever expansive minded Jupiter-ruled Chairman himself: “In light of increasing economic slack here and abroad, the Committee expects that inflation will remain subdued. Moreover, the Committee sees some risk that inflation could persist for a time below rates that best foster economic growth and price stability in the longer term.”
Commodities moved higher and the US$ index fell 4%, its worst performance for the week since 1985. Inflation is back in the news again. Oh excuse me, now it’s called "reflation" (even Microsoft Word is perplexed). Last December I wrote that Jupiter (expansion) conjoining Neptune (credit, interest rates) on the USA’s natal Moon (consumers; food/shelter) this spring would increase inflation. The Golden One (GS) is now Neutral, believing for now that the latest upswing is a reaction to the Fed rather than fundamentals. Jupiter and Neptune in air element Aquarius means the Fed is taking inflation on a giant hot air balloon ride up up and away, and definitely not as pleasant as listening to the Fifth Dimension. Aquarius is ruled by Uranus, the planetary energy of sharp, sudden, and surprising moves in either direction. Uranus in Neptune-ruled Pisces (2003-2011) can cause commodities to take a rollercoaster ride.
After the FOMC announcement, the yield on the 10 year note dropped about 50bp to 2.533%, a very short term reaction. I believe Bernanke wouldn’t be buying Treasuries unless there is developing a lack of foreign demand. If that’s true, interest rates will start rising faster than Bernanke can blink.
Bernanke and Treasury Secretary Geithner are scheduled to appear before the House Financial Services Committee Tuesday at 10:00 AM EDT for another hearing about AIG. Geithner is scheduled to unveil his three-pronged public/private plan on Monday to buy up the toxic assets that are at the heart of the financial crisis. On Thursday he’ll testify at 10:00 AM on regulatory reform.
The FT calls Geithner “The Treasury fire-fighter.” This describes Geithner’s Sun conjoining Uranus and Mercury in fiery Leo. Leo rules the stock market and I’ve already described how the energy of Uranus operates on market forces. So it’s appropriate that the FT begins the article by observing that “the Dow Jones shot up by 6.5 percent - its largest daily gain in weeks” after he was nominated Treasury Secretary on November 21. Fast forward: “Now, it seems, every time Mr. Geithner opens his mouth the Dow heads in the opposite direction. Worse perhaps, Mr. Obama has got into the habit of expressing his confidence in Mr. Geithner, a sure sign in more normal times that a public figure’s days are numbered.” Now he’s become known as “Tiny Tim.” Neptune opposing his natal Sun describes Geithner’s problems stem from a lack of complete transparency. First it was tax fraud, then his lack of details about the financial stability plan, and now his handling of AIG. And now with Mars in Pisces opposing his Pluto (precisely on Tuesday), the calls for Geithner to resign are growing. And even if he’s able to hold back the opposition now, they are likely to flare up again in the late spring and summer.
Summary Of This Week’s Influences: Power plays are front and center this week as the Sun in Aries challenges Pluto in Capricorn Monday. Leaders like to wield their nu-clear power. Pluto is debt, taxes, insurance, and all those private and unregulated transactions that are clogging up Wall St’s pipes, and Capricorn is government. So this can describe Geithner’s plan (outline) ;-) Another manifestation of this alignment could be more merger announcements, particularly hostile takeovers. Mercury (communications) challenging Pluto Friday is a similar influence that can uncover secret information. Strong Venus energies then somewhat soften this intense energy.
The New Moon in Aries Thursday at 12:06 PM means that these energies will be strong over the next month. This is the time to focus on your relationship with yourself first. Regardless of what’s going on in Washington and on Wall St., you’re in charge of your own well being and how you choose to view your life in relationship to the global situation.
The indices look to have an overall positive bias this week. Volatility increases at midweek.
Monday, March 23, 2009 Positive trend bias.
Tuesday, March 24, 2009 Choppy/mixed to positive trend bias. Could be strongest in late morning.
Wednesday, March 25, 2009 Volatility picks up. Negative early, then choppy/mixed to positive by early afternoon. Mercury moves into Aries this afternoon until April 9. This energy tends to act before thinking.
Thursday, March 26, 2009 Sharp price swings. Choppy/mixed, then moves higher in afternoon; could weaken into the close.
Friday, March 27, 2009 Lowest at open. Starts to improve quickly, and stays positive.
*Gary Ackerman: November 19, 1942 Brooklyn, NY. Pisces is part of the water (feeling) element (the other signs are Cancer and Scorpio). Ackerman wears a white carnation boutonniere each day, one way of expressing that his Sun (self-identity) conjoins Venus (banking/values/flowers). In addition to The Sun and Venus, the Congressman also has Mercury (communication/contracts), and Mars (action/energy/anger) in Pluto-ruled Scorpio. When in DC, Ackerman lives on a houseboat named the Unsinkable II. With all that Scorpio energy and his Mars challenging Pluto in Leo, Ackerman would be good at unraveling the shadow banking system, but he seems to prefer to express these energies engaged in political theatre. Jupiter and Neptune challenging his Scorpio Sun this spring raise the potential for a tidal wave of confusion crashing his boat. Whether the unsinkable happens depends upon whether he has been truthful and transparent in his own conduct as a Congressman.