Wall Street Weather

WallStreetWeather.net Forecast For Week Of July 6, 2009

2009-07-05T13:55:00.001-04:00

Summary Of Last Week’s Influences:
A light volume holiday week and Uranus turning retrograde* brought some unexpected surprises that shook up the stock market. After the indices posted their best quarterly performance since the fourth quarter of 2003, more analysts are coming to believe that the market got a bit ahead of itself.

Uranus is futuristic, or what the market calls a leading indicator. Employment is viewed by the market as a lagging indicator as companies are reluctant to hire until after their business begins to show evidence of sustainable growth. With the “shock and awe” energies of Uranus dominating last week, the market was surprised that the jobs lost in June was about 100,000 more than the market anticipated. Saturn represents contraction, and Saturn in Virgo since September 2007 represents contraction in the workforce. Since the NBER officially declared that the recession began in December 2007, the number of unemployed since then has increased by 7.2 million. It is unlikely employment will begin to grow until Saturn leaves Virgo in July 2010.

The key piece of data from the June payroll report is that the average workweek dropped to 33 hours, the lowest level since data began to be recorded in 1964. This reflects companies retaining workers but reducing their hours. Less hours = less income, and less income = less money for discretionary spending. Another factor is that if a worker’s hours get reduced to part time status their healthcare coverage could be in jeopardy.

I had written in last week’s Forecast that Uranus retrograde could bring “computer system disruptions/outages.” The NYSE remained open until 4:15 PM Thursday in order to ensure that all orders were processed after “system irregularities” caused several stocks to be halted just after 10:30 AM for five minutes due to a technical glitch in the exchange system’s network. According to CNBC, all extended session trades at the NYSE had to be processed manually.

Uranus relates to rebellious and unconventional behavior. As Uranus represents sharp and rapid price spikes (in either direction), the transit since 2003 of Uranus in Pisces has brought sharp swings in the price of oil. WTI Crude hit an 8 month high of $73.38 on the futures market in the early morning on Tuesday following Brent oil’s spike from $71 to $73.50 in one hour after contracts for more than 16 million barrels were traded. According to the FT, that is about double the daily production of Saudi Arabia, and an extreme spike compared to the normal 500,000 barrels typically traded at that time of day. Oil was down 10% Thursday from Tuesday’s spike partly due to the fact that a “rogue” trader at PMV Oil Associates in London had accounted for at least half of the futures buying; other traders then climbed aboard thinking they must have missed some breaking geopolitical news.

Saturn in Virgo exactly conjoined California’s natal Sun (identity) on July 1, reflecting the state’s $24 billion budget deficit. Jupiter and Neptune conjoining California’s progressed** Sun in Aquarius reflect the inability of Republicans and Democrats to overcome their extreme political ideologies to make the hard choices necessary to break the budgetary impasse. This has forced California to issue its own currency in the form of IOUs.

Summary Of This Week’s Influences:
NOTE: For more information on this week’s influences, see my posts on “Eclipses and Other Planetary Pair Ups Will Bring Back The Bear Market By Autumn” and “Wall Street and the Consumer in Parallel Universes.”

The indices reached their high for the year on June 12, the last trading day before Jupiter turned retrograde. Since then the indices have been trading in a sideways but downward trend. We are now in the period between eclipses through August 5 that tends to create unsettled conditions and reverse trends. Although Tuesday’s Full Moon is a “milder” Lunar Eclipse, the Full Moon in Saturn-ruled Capricorn raises worries about the health of the consumer and residential and commercial real estate and their underlying securities. The Lunar Eclipse affects the USA’s natal Sun in Cancer and Saturn in Libra, reinforcing the theme of growth constraints.

Meanwhile Jupiter and Neptune conjoin in Aquarius for the second time. This planetary pairing played a big role in the market’s spring run up, but with both planets retrograde and separating after Friday, their influence now can exaggerate the pessimism seeping back into the market.

On a personal level, the second Jupiter/Neptune conjunction represents a good time to ask yourself, what is your truth? Are you willing to embark on a new journey into unexplored territory in order to free yourself of the illusions that can be comforting because they are familiar yet hold you back from bringing a vision into reality? The eclipse energies relate to this theme as they highlight the issues of personal needs, security issues, family, career and public reputation.

The week begins with Mars in Taurus challenging Jupiter and Neptune. Mars challenging Neptune shatters financial illusions, especially regarding credit issues. The last time Mars in Taurus challenged Neptune in Aquarius was on July 23, 2007 when the market reacted bearishly to Countrywide’s (BAC) earnings call after CEO Angelo Mozilo told analysts that “prime is not prime.”

Alcoa’s (AA) earnings release after Wednesday’s close marks the start of earnings season which will get fully underway next week. Saturn in Virgo conjoining Alcoa’s stock chart progressed Venus, challenging its Sun in Gemini, and a Saturn return in September will tend to keep the stock under pressure during this quarter. This earnings season the markets are going to need more than numbers and projections that were “less bad” than expected to compel the markets to move higher.

President Obama will attend the G8 meeting in Italy on Wednesday where Russia plans to resume talks begun at the April G20 meeting on creating a mix of regional reserve currencies as an alternative to the U.S. dollar as the world’s reserve currency. Brazil and China will send officials to the meeting that will also be attended by India’s PM Singh. Bloomberg reports that an economic advisor to Singh is urging the government to hold fewer US dollars in India’s foreign currency reserves.

The Treasury will sell $136 billion of “junk” this week, including $8 billion in 10 year TIPS on Monday, $35 billion 3 year notes on Tuesday, and $19 billion 10 year notes on Wednesday, and $11 billion in 30 year bonds on Thursday. Bernanke could never buy enough Treasuries to make up for reduced purchases of U.S. debt by sovereign nations should they decide to act on their rhetoric.

The market has a bearish bias, particularly during the first half of the week. The strong influence of the Jupiter/Neptune conjunction is likely to bring big market moves.

Monday, July 6, 2009
Negative.

Tuesday, July 7, 2009
Negative.

Wednesday July 8, 2009
Negative, but could see improving conditions approaching the close.

Thursday, July 9, 2009
Negative to choppy/mixed conditions.

Friday, July 10, 2009
Market improves as day progresses.

*Planets do not really move backwards, but appear to from Earth’s vantage point.

**A mathematical calculation that moves the planets forward in time as a method of prediction.

No disclosures.

JPM CEO Jamie Dimon Should Know Protecting Consumers Is The Path To Long Term Profitability

2009-07-02T10:13:00.002-04:00

Published by WallStreetWeather.net

As JPMorgan Chase (JPM) Chairman and CEO Jamie Dimon recently wrote in The Wall Street Journal (“A Unified Bank Regulator Is a Good Start”), “the gulf that grew between Wall Street and Main Street has hurt everyone.” That’s because regulators never chose to make the connection that having strong consumer protections would not only help consumers, but also protect banks from losing money due to their “innovation.”

The Obama administration’s proposal to create a Consumer Financial Protection Agency (CFPA) to regulate consumer financial products is a major component of its plan for financial regulatory reform. Big banks from JPMorgan Chase to thousands of regional and community banks are lobbying to defeat the plan as it makes its way through Congress.

Saturn symbolizes regulatory structures, the past, and the status quo. Saturn’s sojourn in Virgo represents the need to clean up the mess after the balloons burst at the credit party when Saturn in Leo completed its cycle opposing Neptune in Aquarius in late June 2007. From November 2008 through April 2010, Saturn in Virgo is opposing Uranus in Pisces. Both of these energies signal a major cleansing that must take place, as the failures of the past must be allowed to dissolve to make way for a new regulatory structure that serves the interests of everyone. Like Jamie Dimon’s op-ed, these energies also mean that those in authoritative positions will attempt to create the illusion they are for reform (at least in the areas that would benefit their business), while actively lobbying behind the scenes against any attempts at meaningful overall reform.

Pisces and its planetary ruler Neptune relate to addictions and credit. With the USA’s natal Mars in Gemini challenging the USA Neptune in Virgo, the banks would like nothing better than to keep Americans actively using credit to support the banks addiction to the interest and associated fees the cards generate. Lenders collected a record $18.1 billion in credit card penalty fees, a 69% increase from 2003, when Uranus entered Pisces. Banks keep raising fees and interest rates on cards to offset rising borrower defaults. According to Fitch Ratings, losses on U.S. credit cards hit a record 10.44% in June.

Gemini and Virgo are ruled by Mercury which is located in the area of the USA chart representing debt. With the USA Mercury in Cancer opposing Pluto, the planetary ruler of debt located in the area of the USA chart representing banking and finance, the voices of consumers have been overwhelmed by the money and power of the financial industry.

As the largest credit card issuer in the USA with card services comprising 23% of its managed net revenue by line of business,* JPMorgan Chase has a vested interest in mitigating any damages that the CFPA could impose on their fee and penalty generation. With his Sun in Pisces exactly opposing the USA Neptune in Virgo, it is unbecoming that Jamie Dimon will often speak of “doing the right thing,” yet this superstar of finance earns revenue by entrapping customers in products they don’t stand an even chance of escaping.

In essence the banks are running their own type of Ponzi scheme. After a bank collects an outrageous rate of interest and fees, Joe defaults. Now the bank will need to acquire Jane as a new customer to pay for Joe's loss, and so on. It was easy to attract new customers as home prices continued to rise, but the scheme unraveled in the post-bubble era of rising unemployment. (Saturn in Virgo represents contraction in the workforce.)

Saturn in Virgo represents government enacting regulations that particularly benefit what politicians like to refer to as “working class Americans.” Saturn in Virgo will transit the USA Mars and Neptune in August before forming a third opposition to Uranus in mid September. The House Financial Services Committee wants to complete work on the bill to establish the CFPA by the end of July to go to the Senate in September. House Financial Services Chairman Barney Frank told The New York Times: “Anyone who thinks we’re not going to create this agency is mistaken. The American public wants it.” After all the bad blood created by bank bailouts, does the usually politically astute Jamie Dimon and other financial institutions want to create a public relations nightmare for themselves by going against the tide of consumer sentiment? With Saturn opposing Dimon’s natal Sun in late August, this is not a good time for the JPM chief executive to actively oppose the government.

The Times writes that “Administration officials said the proposal would create a ‘level playing field’ and provide the same regulation for particular consumer products regardless of what kind of financial institution was selling them.” (Bolded emphasis mine.)

On October 29, Saturn will move into Libra, the sign symbolized by equally balanced scales representing fairness. Saturn rules foundations, and as Michael Barr, assistant Treasury secretary for financial institutions, told the Times: “The agency will be able to get to the root of the mortgage crisis that we saw in the past. It will be able to go in to examine, supervise the operations of previously unregulated parts of the sector.”

Pluto rules death and all types of debt. What good is a mortgage (mort=dead/gage =pledge) with an interest rate so high the homeowner cannot pay it and the home ends up in foreclosure? It hurts both borrower and lender. Saturn represents karma, the law of cause and effect. The cycle of Saturn in Libra challenging Pluto in Saturn-ruled Capricorn beginning in mid November will bring further lessons to financial institutions who beyond receiving government assistance, have a societal obligation to correct the damage they have done. Saturn conjoining the USA chart’s Midheaven (Obama Administration) and Saturn and Pluto challenging the USA Venus (banking and finance) over the next year will bring greater regulation to the financial industry, forcing profits to come from a return to more conventional or conservative banking. The Pluto in Sagittarius (1995-2008) era of laissez-faire finance is finished.

If as Dimon writes, banks are to “re-earn the trust of the American people,” then JPMorgan Chase and all the other financial institutions opposing the creation of the CFPA should “do the right thing” now and stop increasing rates and fees in order to squeeze as much short term profit while they can before the CARD legislation takes effect in February. Decimating the banks retail customers is never a way to generate long term profitability for the institutions, as recent history has aptly demonstrated. In reality, the Consumer Financial Protection Agency will save banks from themselves.

*Following JPM’s acquisition of WaMu. Source: Jamie Dimon Letter to Shareholders, 2008 JPM Annual Report.

No disclosure.

WallStreetWeather.net Forecast For Week Of June 29, 2009

2009-06-28T16:13:00.004-04:00

Summary Of Last Week’s Influences:
Last week opened bearish as the World Bank’s downgrade of GDP growth had the same effect as when the IMF lowered its economic growth forecast one week prior.

The Federal Reserve’s statement Wednesday reiterated its intention to keep rates at its “exceptionally low levels for an extended period,” since the Fed “expects that inflation will remain subdued for some time.” Bernanke tried to calm the bond market by saying the Fed will “make adjustments” to its credit and liquidity programs “as warranted” to show he has an exit strategy. The problem is that few people believe him. The following day the Fed announced it would extend its lending programs for the commercial paper market (CPFF & AMLF) through February 1, 2010, while reducing the size of its TAF auctions noting that conditions in wholesale funding markets have improved.

With the Sun opposite Pluto falling on the Fed’s natal Sun opposite Pluto, scrutiny has turned to the Fed’s secretive (Pluto) actions taken during the financial crisis, and specifically by the Chairman (Sun). Ben Bernanke got grilled for just over three hours on Thursday by the House Oversight and Government Reform Committee over the Fed’s involvement in pushing Bank of America (BAC) to complete its agreement to purchase Merrill Lynch.

Discontent with the Fed Chairman is growing on both sides of the aisle, but the Street is pushing for Bernanke’s reappointment because he is against the Obama Administration’s plan to create a new Consumer Financial Protection Agency that would take away the Fed’s authority to regulate consumer financial products. With bank fees comprising 53% of the industry’s income in 2008 vs. 35% in 1995, you can understand why Wall St. wants someone who solely supports the industry. The Fed should be audited on all its special lending programs, but despite the damage caused to the economy by its current and former Chairman, it is necessary that the central bank retain its independence.

In last week’s Forecast I wrote that “anecdotal reports of economic contraction” would keep the market lower on Friday. Quantas canceled its order for 15 Boeing (BA) Wet-Dreamliners and is delaying delivery on 15 more. Economic reports supported the premise of my post on “Wall Street and the Consumer in Parallel Universes”, as the personal savings rate in May was the highest since December 1993. And it appears that the slight boost in personal income was due to a onetime gain of stimulus checks to seniors. People rebuilding their balance sheets is vital to rebuilding a healthy and sustainable economy, but the market’s reaction shows it is not ready to face that reality. While the University of Michigan’s Consumer Sentiment was the highest since February 2008, the boost came from current expectations, as people’s future economic expectations were lower. This is downbeat news for markets that are always focused on the road ahead.

Summary Of This Week’s Influences:
“Expected the unexpected” this week as Uranus in Pisces turns retrograde* on Wednesday until December 1. The planet symbolizing independence and eccentricity is pronounced June 26 through July 6, just in time to celebrate U.S. Independence Day. Uranus in Pisces is out to shake the world up from its slumber of outmoded beliefs as it dissolves preconceived barriers of separation. This is particularly taken to a personal level while Uranus is retrograde. (As Uranus again approaches opposition to Saturn in Virgo in September, this will become even more evident.) Pisces and its planetary ruler Neptune represent the interconnectedness of all things. For example, the housing bubble could not have happened without the participation of individuals, realtors, appraisers, lenders, institutional investors, politicians, and government regulators – especially the Federal Reserve.

The interconnectedness between Uranus and Pisces and Neptune in Uranus-ruled Aquarius is dominated by Jupiter again conjoining Neptune in Aquarius. Neptune represents illusions, and Jupiter is expanding that. With such a short time span between the first Jupiter/Neptune conjunction on May 27 and the next one occurring on July 10, Bulls hope the market is just resting in a sideways position until second quarter earnings news propels the indices higher. Venus (July 1-2) and Mars (July 6) in stubborn and slow moving Taurus will be challenging Jupiter/Neptune just before their next conjunction. Mars is action; Mars in Taurus might decide it’s time to at least take some gains off the table. As an earth energy, Taurus recognizes that a profit is not real unless the money has been deposited into their bank account. As Jupiter and Neptune begin moving apart, the market’s optimism might begin to wane.

It could be a wild Wednesday with Uranus turning retrograde and Mercury in Gemini challenging Uranus could bring some shocking news. These energies can make people jittery and highly excitable. Focus on one thing at a time to keep your mind clear of clutter. Ensure that all electrical devices are fully charged and back up files, as these energies can bring electrical and computer system disruptions/outages. Freaky weather conditions (these energies create high winds) could suddenly arise that create travel delays. Mercury harmonizing with Jupiter and Neptune can inject some humor and creativity to work around any inconveniences. With Venus challenging Neptune today, there could be unrealistic expectations about money and love. Inflation could be a concern.

The abbreviated holiday week begins with the First Quarter Moon in Libra, symbolized by the scales of justice. Even if Bernie Madoff receives the justice he deserves (the government’s recommended 150 years in prison) Monday morning, I believe that Madoff did not completely act alone. The scales will not be balanced until the people who assisted Madoff face justice as well.

Monday, June 29, 2009
Mostly choppy/mixed as market swings indecisively from negative to positive. (Now I sound like I just attended the Alan Greenspan School of Communication!) :-)

Tuesday, June 30, 2009
Negative trend bias.

Wednesday, July 1, 2009
Uranus turning retrograde and other planetary pair ups create mixed signals that could create more volatility in either or both directions, but tendency is toward the downside that may have a late day turnaround.

Thursday, July 2, 2009
Positive trend bias.

Friday, July 3, 2009
Market closed for Independence Day tomorrow. Mercury enters Cancer until July 17. Thoughts and news focus around food, real estate, and economic and physical security. Mercury opposes Pluto in Capricorn which can create disagreements over debt issues, as well as geopolitical tensions over nuclear issues and state secrets.

*Planets do not really move backwards, but appear to from Earth’s vantage point.

No disclosures.

Bernanke Claims Fed Acted With “Highest Level of Integrity” In BofA/Merrill Deal

2009-06-26T18:29:00.004-04:00

Published by WallStreetWeather.net

“Was Bank of America forced to go through with the deal, or was this just an old fashioned shakedown? These questions are particularly important given the Administration’s new proposal to give broad, new powers to the Federal Reserve. It’s time to yank the shroud off the Fed and shine some light on these events.” – House Oversight and Government Reform Committee Chairman Edolphus Towns

Suffice it to say I enjoy hearing people articulate the message of planetary alignments! In “Obama’s Regulatory Reform Removes the Punch Bowl from the Fed,” I wrote:

“The Sun/Pluto opposition is transiting the Federal Reserve’s natal Sun in Capricorn opposite its Pluto in Cancer, reinforcing the need to shed light on the Fed’s secretive dealings and restructure its identity.”

The Sun represents leaders, and the Summer Solstice/Cancer New Moon opposing Pluto in Capricorn this week is shining the spotlight on Ben Bernanke’s performance as Fed Chairman. Asked by reporters during news conferences this week if Bernanke is doing a good job, President Obama and the White House press secretary have uttered tepid support for the Fed Chairman.

One area that is gaining bipartisan support in Congress is the suspicion that the Fed Chairman has not been forthcoming about the secret deal Bernanke and former Treasury Secretary Hank Paulson struck with Bank of America (BAC) CEO Ken Lewis to ensure BofA consummated its purchase of Merrill Lynch.

Following Ken Lewis’ testimony before the House Oversight Committee two weeks ago, Bernanke vigorously defended his actions before the committee yesterday, saying he “had nothing to regret about the whole transaction” and he “acted with the highest level of integrity under highly unusual circumstances.” Throughout the hearing the Fed Chairman emphasized that if the deal failed to go through, it would have injected broader systemic risk into an already fragile financial system. Bernanke’s remarks insinuated the end justified the means. Bernanke said that financial conditions have improved since then, Merrill has become profitable now for BofA, and BofA never needed ringfencing on a $118 billion pool of mostly Merrill assets and now believes the protection is no longer needed.

Despite being appointed by President George W. Bush, Rep. Darrell Issa, the ranking Republican member of the committee, accused Bernanke of a “cover up” in response to his denials that he did not say nor did he tell Paulson to tell Ken Lewis that Lewis and BofA’s Board would be fired if Lewis invoked a MAC (material adverse change) clause to break the deal with Merrill. When Bernanke was asked if Paulson lied giving his deposition to New York AG Cuomo that Bernanke had told him to tell Ken Lewis that he and his Board would be fired, Bernanke responded that he believed Paulson had “modified that statement” after the deposition. (It will be interesting to hear what Paulson says when he testifies before the Committee in July.)

As the hearing went on, Bernanke more frequently answered questions by saying he “didn’t recall.” When Rep. Dan Burton questioned Bernanke, he remarked that it’s been his experience that “people often use such language to avoid perjuring themselves.”

When Rep. Burton asked Bernanke if Richmond FRB president Jeffrey Lacker was “lying” in a Dec 20 email (see page 2) that “management is gone” if Lewis invokes the MAC, Bernanke responded that Lacker was “summarizing a long conversation,” so he couldn’t remember if he “did or did not” say that. Rep. Jason Chaffetz wanted to know how Bernanke “advising” Lewis not to invoke the MAC was not a threat. Or as Rep. Elijah Cummings described the committee’s conclusion of the hearing with Ken Lewis: “There was not a person in this room who didn’t understand Ken Lewis was not threatened.” Bernanke insisted that Ken Lewis always had the ability to exercise his free will as “We don’t control his destiny unconditionally.”

In trying to gauge Bernanke’s defense that systemic risk warranted the actions that were taken, Bernanke was asked if it was the Fed’s decision to allow Lehman to fail. Despite the Fed’s authority under Section 13.3 to lend to “any individual, partnership, or corporation” in “unusual and exigent circumstances,” Bernanke once again cited the Fed had “no legal authority” to lend to Lehman. He said that only after Congress passed the TARP were the tools available to have saved Lehman. (Bernanke conveniently forgot the Fed invoked Section 13.3 to prop up AIG 48 hours after Lehman collapsed.) Bernanke also said he had “no way to compel Ken Lewis to buy Lehman.” On AIG, Rep. John Tierney told Bernanke that “the Fed rolled over and paid out to the banks” when it should have negotiated with AIG’s counterparties. Tierney requested copies of all documents related to the Fed’s deals with AIG’s counterparties, contracts, and documents related to the creation of Maiden Lane III.

Rep. Jim Jordan wanted to know when Bernanke knew the TARP wouldn’t be used to buy toxic assets. Bernanke said he found out 10 days after Congress passed the bill, explaining that the global banking crisis required “a complete change of strategy”* and the program “would take some months to put into operation.” Bernanke said he was not in contact with the nine bank chief executives that Paulson called to Washington on October 13 to take TARP as “it was Paulson’s decision.”

Bernanke said he “initially thought there might have been some attempt by Ken Lewis to get a subsidy,” by threatening to invoke the MAC, but after meeting with him he got the impression Lewis was “genuinely undecided” about whether or not to go forward with the deal. Rep. Dennis Kucinich questioned the Fed’s judgment in providing additional financial support to BofA without demanding management changes recommended by Fed staffers as the Fed became aware of Merrill’s accelerated losses in mid November. Bernanke said he didn’t know the amount of Merrill’s losses as the Fed was involved in Merrill’s oversight in a “light way” since Merrill was not a bank.

Bernanke was questioned why the Fed did not inform the SEC about the situation. Bernanke made it clear that “we all have our spheres of responsibility” and that it was BofA’s responsibility to inform the SEC. He said the regulators most relevant to the deal were FDIC Chairman Sheila Bair and OCC Chairman John Dugan whom he personally notified. Bernanke said When Rep. Jackie Speier commented that “we’re all one government,” Bernanke replied that he “followed the law exactly” as the Fed’s disclosure requirements are “explicitly set out in the Emergency Economic Stabilization Act of 2008” that requires the Fed to publicly disclose lending money to a financial institution within one week of the loan.

When asked by Rep. John Duncan if the Fed is operating with too much secrecy, Bernanke defended his "enormous strides under my Chairmanship to expand the information we release." Bernanke expressed his concern that a complete audit of the Fed by the GAO could compromise the Fed’s independence and interfere with monetary policy.

As Committee Chairman Towns said in his closing remarks: “We got a peek but don’t have full sunshine yet.”

*If Bernanke understood planetary cycles, he could have said: “Look, Mercury was retrograde then. New endeavors begun when Mercury is retrograde tend to turn out different than originally anticipated. Plans tend to get changed or reversed.” ;-)

No disclosures.

Lloyd Blankfein’s Golden $40,543 A Year Health Insurance

2009-06-25T00:10:00.004-04:00

Published by WallStreetWeather.net

The Sun is our life force and represents our physical vitality. The zodiacal sign Virgo rules health matters. People born with the Sun and/or other planets in Virgo have a tendency to worry about their health and would want to insure they have access to every available resource at their disposal.

With his Sun in Virgo, Goldman Sachs (GS) Chairman and CEO Lloyd Blankfein’s credo must be you can never be too rich or have enough health insurance coverage. Blankfein’s health insurance is valued at $40,543 a year, which I would think should be enough to cover every possible exam, test and treatment for every ailment covered in the Merck Manual. And in what could only make a penny pinching Virgo absolutely drool with envy, Goldman pays for Blankfein’s health insurance even though he received $73.72 million compensation in 2007.*

Does it really cost $40,543 to get truly comprehensive health insurance in America? As The Wall Street Journal explains in “Going It Alone When Buying A Health Policy,” insured individuals are finding out the hard way that even a policy with lifetime coverage of $2 million does not mean your insurance company will pay your claim.

Tina Smith had that lifetime coverage benefit from Assurant. But what she didn’t know until after she ran up $86,000 in uncovered medical bills to treat her lymphoma was that buried within her policy was a $5,000 annual limit on what Assurant would pay for outpatient treatment (medical care when a patient hasn’t been admitted to a hospital).

Ms. Smith’s example is why looking at a policy’s premium and copay/deductible costs only comprises part of what you need to know when evaluating a health insurance policy. You also need to understand what the insurance policy’s annual out-of-pocket maximum (the total dollar amount you will spend in a year) is, as well as what the policy’s benefit limits and exclusions are. This information can only be found by thoroughly reading the policy’s “certificate of coverage” (also called the “evidence of coverage”).

If our “free market” health insurance system is so efficient and easy to understand, then why does the Journal advise consumers to “discuss policy provisions that you don’t understand with an agent or another expert”? After reviewing my own nearly 200 page certificate of coverage, I realize that our current private insurance policies are far too complex for anyone to truly understand what they’ve purchased.

A person might sincerely believe they have disclosed all of their medical history and potential health issues on an insurance application, but once a policyholder puts in a claim of any size or begins treatment for a costly disease, the insurance company will use your doctor as a weapon against you by trying to get the doctor to say that your ailment or teeny tiny spot detected on a diagnostic test could have been present before you became a policyholder. Regardless of how many years you’ve had your policy, the insurance company can deny your claim or rescind your policy altogether.

Because very few of us will ever have a policy that offers the level of coverage like Lloyd Blankfein’s, America needs a government option or better still open up the government run healthcare program known as Medicare to all ages so no one can be rejected for coverage, everyone will know exactly what coverage they have and how much it costs, with basic health coverage offering premiums that people of all income levels can afford.

If the government could pull out all the stops to wave its magic wand just before the stroke of midnight last September to prevent the Golden One’s riches from turning into rags, Congress should at least provide the American people with these basic rights, along with the peace of mind that unlike the “free market” world of private insurers will not deny treatment that is supposed to be included in their insurance policy.

*Blankfein’s 2008 compensation was $25.84 million.
Lloyd Craig Blankfein: September 20, 1954 time unknown Bronx, NY

Related Post: Full Moon Fever: WSJ Editorial on Healthcare “Mergers and Inquisitions”

No disclosure.

Eclipses and Other Planetary Pair Ups Will Bring Back The Bear Market By Autumn

2009-06-24T00:44:00.003-04:00

Published by WallStreetWeather.net

Every time I read or hear another market analyst proclaim that the recent rally will face a correction but that correction will not break the S&P’s March 6 666 intraday low I say “I wouldn’t be so sure.”

Monday’s Wall Street Journal remarked that only “the real pessimists worry that stocks could fall to new lows by autumn.” But now that the “too far, too fast” three month rally is showing fatigue, the Journal quotes Phil Roth of broker Miller Tabak who thinks the DJIA could hit 9,000 before falling below its March 9 closing low of 6,547.05.

Beyond the technical factors cited in Monday’s article and yesterday’s “Markets Fall on Growth Fears” is that the market is likely entering a choppy to corrective phase; planetary factors provide the potential for a bigger market correction than anticipated. Since the Journal reviews the technical factors that brought the markets to this point, I’ll first review the planetary influences that correlate with the market’s rapid rise from March.

When Venus (banking and finance) turned retrograde* on March 6, market sentiment was braced for nothing short of financial apocalypse and the S&P fulfilled those expectations that day when it dropped to an intraday low of 666. But retrogrades tend to reverse sentiment. After the DJIA and the S&P made 12+ year closing lows on March 9, shorts began covering in a market turnaround after super TARPed Citigroup declared the following day it made a profit in the first two months of 2009. Other banks soon declared that they too were profitable and began talking about repaying the TARP. The government demonstrated that their policies during the crisis created even bigger behemoths that were now considered truly too big to fail. Indeed, even non financial companies could now be classified as a “systemic risk” to the economy. And perhaps the government’s stimulus package would restart spending after all.

With Venus in impulsive and fast moving Aries until June 6, stocks and commodities continued to surge after Venus turned direct April 17, as Mars was about to enter Aries (April 22-May 31). Planets in Aries like to get in on the action first. These energies reflect the belief that if you wait until economic fundamentals are evident, those “green shoots” would have grown into a full crop.

Jupiter expands and Neptune inflates and with these planets approaching conjunction May 27 in Uranus-ruled Aquarius, deflation concerns where rapidly rolling over to inflation. To the Bulls, higher commodity prices reflected growing demand in China and other emerging markets. Jupiter’s optimism combined with Neptune’s world of foggy fantasy in airy Aquarius reinforced the attitude of Venus and Mars in Aries that fundamentals don’t matter. Economic news that was “less bad” than expected was a cause for the market to take another leg up. And with Jupiter and Neptune conjoining the USA’s natal Moon (consumers), Bulls didn’t see why that extra $10 of stimulus in workers’ paychecks wouldn’t translate into more retail spending. Bears went into commodities and shorting U.S. Treasuries as a hedge against the mountain of debt issuance by the U.S. government and the Federal Reserve’s monetizing the debt.

Venus rules Taurus. As Mercury (communications), Venus (values), and Mars (action) were in Taurus the week of June 8, the market continued to gain but at the much slower and steadier pace of this fixed earth sign. Venus’s dominant energies since early March reflect that the biggest gains came in the banking sector. On June 12, the S&P had made a 40% gain from its early March low.

Jupiter turned retrograde June 15, reversing some of those “optimistic assumptions.” And now here we are one week later with the Sun in Cancer opposing Pluto in Capricorn to show that there’s still plenty of debt (Pluto) and continued economic contraction (Capricorn) that can put a damper on stock market (Sun) sentiment (Cancer which is ruled by the Moon).

Market strategists quoted in the Journal article provided their projections through autumn, and I will now give an overview of the major planetary influences on the market from now to that time with more details in upcoming posts as each influence gets closer.

Whether bullish or bearish, there seemed to be consensus among the strategists that at least a 5-10% correction is upon the market. I would tend to agree with John Schlitz, chief technical strategist at Instinet, who said there will be a bit more upside and then some “very frustrating, choppy trading in the summer, setting up for a traditional October low.”

Market pundits (along with planetary pundits such as yours truly :-) ) need to stay focused to the fact that strong Uranus energies are a wakeup call to expect the unexpected. Whether the market makes its fall in September, October, November, or a bit sooner or later than that doesn’t change the overall theme outlined as a probable scenario. Saturn the ruler of tradition is opposing Uranus through mid-2010 and most of the time Uranus has more leverage.

The energy of Uranus in Pisces will be more pronounced June 26 through July 6 as it turns retrograde on July 1 (until December 1) in what could be a “wild Wednesday." Uranus creates volatility; a rollercoaster ride that can send prices lower or higher faster than anticipated. Mars in Taurus challenges Jupiter and Neptune on July 6 which could raise questions about credit issues as well as CMBS which is part of the next wave of the financial crisis.

During an eclipse the Sun or Moon’s light is concealed by the Moon (Solar Eclipse) or the Earth (Lunar Eclipse). The period one week before and between eclipses is not a favorable time to make decisions as the light being blocked symbolically represents that we do not have all the information we need to make a sound decision. Eclipses are harbingers of change, and things tend to be seen in a whole new light beginning a week after the eclipses have passed.

Eclipses don’t always have a profound effect on the market right away, but the July 7 Lunar Eclipse, July 21 Solar Eclipse, and the August 5 Lunar Eclipse all impact key planetary energies in the charts for the New York Stock Exchange and the USA. Pluto rules debt and the Solar Eclipse in Cancer (consumers/real estate/domestic security) falls in the area of the USA chart representing debt, opposing the USA’s natal Pluto in Capricorn in the area of the USA chart representing the financial system. Foreign governments could be shedding their holdings of U.S. debt. With the Moon ruling the area of the Solar Eclipse chart representing the stock market, market sentiment is very changeable.

The Solar Eclipse also conjoins the Federal Reserve’s natal Neptune. These aspects indicate the next financial crisis has arrived, and once again the Fed is not only asleep at the wheel, but preoccupied with keeping a grip on its power to hold onto regulating consumer credit (Neptune), and could be trying to prevent a scandal erupting over its handling of AIG and the Bank of America/Merrill Lynch deal.

Mars in Gemini challenges Saturn (August 10) and Uranus (August 18). These energies tend to depress the market and create volatility, especially because Mars triggers the energies of Saturn in Virgo opposing Uranus in Pisces. Saturn in Virgo seeks to create greater efficiencies within the bounds of current governmental and societal structures. Uranus in Pisces promotes the need to dissolve status quo systems that have become obsolete and replace them with something new that benefits everyone.

The planetary energies in September share similarities to the energies of September 2008. Mercury will turn retrograde on Labor Day, the exact place where it went direct on October 15, 2008 which was the same degree as the September 29, 2008 Libra New Moon. That was the day the Dow dropped almost 800 points after the House failed to pass the TARP bill.

On the one year anniversary of the collapse of Lehman Brothers, Saturn will oppose Uranus for the third time. The first Saturn/Uranus opposition occurred on Election Day and the second took place on February 5, 2009. The market was bullish on those days, but on both occasions the major indices made multi-year lows within one month of the opposition. The September 18 Virgo New Moon occurring on quadruple options expiration day will accentuate these energies as the Sun and Moon conjoin Saturn and oppose Uranus. Both the USA and the New York Stock Exchange charts will be affected, and Mars in Cancer will reactivate the issues present around the July 7 Lunar Eclipse.

Mercury retrogrades back into Virgo on September 17 where it will rendezvous with Saturn on September 22, the day of the Autumnal** Equinox and the FOMC meeting, and oppose Uranus the next day. News could depress the market and then create volatility to the upside the next day. Mercury turns direct conjoining the USA Neptune and challenging the USA Mars, highlighting military matters and foreign relations, as well as facts that turn out to be fiction or based upon incomplete information.

Jupiter turns direct on October 13. Jupiter usually creates big market moves, and its direct station tends to be optimistic, but Venus conjoining Saturn the same day can create financial fears. Mars reactivates the themes surrounding the July 21 Solar Eclipse on October 15.

On October 29, Saturn will enter Libra for six months and then again from July 2010 to October 2012. On November 15, Saturn will make the first of several challenging alignments to Pluto in Capricorn. The transit of Saturn in Libra is to teach the lesson of balanced financial relationships and rules and regulations that are fair to all parties. Saturn challenging Pluto will expose not only who is not playing fair in the corporate/financial world but also in government, which could create market turmoil.

*Planets do not really move backwards, but appear to from Earth’s vantage point.

**CORRECTION made 6/24/09 at 7:35 AM: I had originally written Vernal Equinox by mistake. (The Autumnal Equinox marks the first day of fall in the northern hemisphere and the Vernal Equinox marks the first day of spring.)

WallStreetWeather.net Forecast For Week Of June 22, 2009 (Summer Solstice/New Moon Edition)

2009-06-21T16:15:00.001-04:00

Summary Of Last Week’s Influences:
Last week’s Forecast discussed how Jupiter’s pronounced energies Monday through Wednesday would likely result in larger market moves in either direction. Jupiter prefers to operate under the auspices that the glass is half full, but Jupiter appearing to turn retrograde from Earth’s vantage point can affect financial markets by reversing the trend, as planetary retrograde periods create a shift in perception.

As I’ve written many times, Jupiter is the principle of expansion. Contrary to my daily prognostications last week, Jupiter turning retrograde Monday expanded the impact of comments made by Treasury Secretary Geithner at last weekend’s conference of G8 finance ministers when he remarked that economic conditions have a “way to go” before the U.S. can begin to pull in liquidity. Then the IMF called the Administration’s economic assumptions “optimistic,” believing the U.S. economy will stagnate between now and the second quarter of 2010 when the recovery should strengthen. (I think the IMF is a bit ahead of themselves; push the forecast back to Q42010-Q12011 for a sustainable recovery.) Jupiter emphasizes foreign relations, and the dollar got a boost after Russia’s finance minister made positive remarks about the dollar’s solid status as the world’s reserve currency following the G8 meeting.

With Jupiter conjoining Neptune, the commodities bubble has been rebuilding itself as bulls wanted to get in on the economic recovery early and bears sought to protect themselves from the inflation created by the growing mountain of U.S. debt and the Fed monetizing it. “Commodities reverse on resurgence in the U.S. dollar which rekindled worries about the U.S. economy,” was how The Wall Street Journal described Monday’s pullback. (Italics mine.)

The glass half full looked too empty Tuesday after a Morgan Stanley strategist said “the rally may now be over”, and Goldman’s chief economist said the correction could go on for a few weeks as financial markets may weaken on concerns about government intervention.

On Wednesday some of the original TARPed banks – Bank of New York Mellon (BK), Goldman Sachs (GS), JPMorgan Chase (JPM), Morgan Stanley (MS), and State Street Corp. (STT) repaid the Treasury. (The banks still want to buy back the government’s warrants.)

The indices became choppy/mixed late in the week, trying to figure out whether to stay with the market or take profits before they get eroded.

Summary Of This Week’s Influences:
I view the phase we’re in now akin to the intermission during a multi-act play or being in the calmer eye of the hurricane. Act I saw the fall of several major financial institutions and the government’s ad hoc efforts to stop the bleeding. Things have seemed fairly calm compared to the tumultuous turmoil of last autumn.

While financial markets have made an impressive recovery, none of the government’s programs in place effectively deal with fixing the root of the problem. Now we are preparing to enter the second act or as anyone who has experienced a hurricane will tell you, the worst part of the storm occurs after the calm of the eye passes over. Beyond the next wave of problems in credit cards, credit derivatives, and consumer and commercial real estate, reforms that rebuild our economic structures cannot be postponed any longer. While it was a major mistake for President Obama to retain the Bush Administration’s economic players, policies, and programs, the President recognizes that it is his mission to overcome what he calls the “it is never the right time” mentality for making sweeping reforms that might be initially painful but can help the nation break free of these boom/bust cycles that even NEC Director Larry Summers has acknowledged have become an all too frequent event. President Obama has made reforming healthcare and financial regulation the key drivers to putting the economy back on a path to sustainable long term growth.

The cardinal (action-oriented) signs* mark the seasonal turning points of the year. Summer began in the northern hemisphere today when the Sun entered Cancer (until July 22). What makes this Summer Solstice time more powerful is that the New Moon in Cancer occurs on Monday (3:35 PM EDT), making the next month a time to begin to make major changes.** Cancer and its ruler the Moon rules consumers and domestic security as the Moon and Cancer represents the need for physical and emotional security. So it’s only natural that these energies rule the most emotionally charged areas of our lives: food, family, and the “American Dream” of home ownership. And nowhere in the world are these issues more emotionally charged than in America, born with the Sun (self-identity), Mercury (communication), Venus (money and values), and Jupiter (abundance; philosophy) in Cancer.

Two planetary pair ups dominate at this time: Venus and Mars conjoin in Taurus, the sign of banking and finance, and the Sun in Cancer opposes Pluto in Capricorn.

Venus conjoins Mars today, and tomorrow the two planets harmoniously interact with Saturn in Virgo. With these planets in the practical earth element, this is a fantastic time to take action to build or rebuild a solid and secure financial foundation. Banks should not wait for Congress to pass regulatory reform; they should be getting back to basic banking now. In the future banks will operate more like utilities by enriching their shareholders with stable earnings and juicy dividends, replacing growth based on financial alchemy and stock buybacks that only enriched their top executives.

On a personal level, the Sun/Moon and Venus/Mars conjoining at the same time not only help to balance expressing the male and female energies within ourselves, but particularly in an intimate relationship. You and your partner will be in sync regarding what you value and enjoy the simple pleasures of each other’s company.

The Sun opposing Pluto provides the determination and willpower to restructure government regulatory rules in order to create a balanced financial system that serves the needs of consumers and businesses. This influence is reinforced as Pluto is opposing the USA’s natal Venus in Cancer and challenging the USA’s Libra Midheaven (the Administration; USA’s global reputation). The Sun/Pluto can bring more mergers and acquisitions due to financial constraints. At the same time there could be legal challenges to mergers and bankruptcy proceedings. Look for the Sun opposite Pluto to expose more of the secrets of the shadow banking system. The Sun opposite Pluto will wield its greatest influence at the Federal Reserve.

Speaking of the Federal Reserve, the Fed will release its statement on monetary policy at 2:15 PM on Wednesday. The Fed statement could be more defensive of its extreme monetary easing, communicating that the economy is not ready for a withdrawal of its excess liquidity anytime soon.

The House Oversight and Reform Committee issued a second subpoena on the Fed for more documents related to the Fed’s role in ensuring Bank of America completed its acquisition of Merrill Lynch. At 10:00 AM on Thursday it will be Fed Chairman Bernanke’s turn to testify.

Take all those scattered thoughts and pieces of paper and structure them into a coherent plan on Friday as Mercury in Gemini challenges Saturn in Virgo.

The energies of Uranus in Pisces are more pronounced from Friday through July 6 as the planet turns retrograde July 1. Uranus tends to create volatility through sharp and unexpected swings that go higher or lower quicker than anyone anticipated. With Uranus in the house representing speculation and Neptune the planetary ruler of this house in the Cancer New Moon chart, the market will probably make large moves in both directions over the next month as it shifts from periods of euphoria to panic. And it’s those Cancer themes discussed above that will most likely be the source of the wildest market moves.

Monday, June 22, 2009
Positive trend bias.

Tuesday, June 23, 2009
Negative trend bias.

Wednesday, June 24, 2009
Indices negative but interspersed with choppy/mixed conditions. Could see improvement approaching the final hour.

Thursday, June 25, 2009
Negative conditions improve to choppy/mixed to moderately up in afternoon.

Friday, June 26, 2009
Anecdotal reports of economic contraction keeps market lower.

*The cardinal signs are Aries (spring), Cancer (summer), Libra (fall), and Capricorn (winter).
**The first of two New Moons in Cancer. (The second is a Solar Eclipse on July 21.)

No disclosures.

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

Obama’s Regulatory Reform Removes the Punchbowl from the Fed

2009-06-18T23:22:00.005-04:00

Published by WallStreetWeather.net

Capricorn and its planetary ruler Saturn represent government, structures, and rules and regulations. With transformative Pluto in Capricorn from 2008 to 2024, all types of structures get reformed, as well as the government agencies in charge of overseeing them.

The Sun represents leaders, and with the Sun opposing Pluto, President Obama yesterday released the Administration’s plan for “Financial Regulatory Reform A New Foundation: Rebuilding Financial Supervision and Regulation.”

Planetary oppositions represent opposing forces, and the Sun opposite Pluto describes the turf battles that took place behind the scenes between the executive branch, leaders of the financial regulatory agencies, members of Congress, and industry executives and lobbyists to preserve their power and influence. Although the Office of Thrift Supervision and the Office of the Comptroller of the Currency will be combined to become the National Bank Supervisor within the Treasury, the Administration failed to combine the Commodity Futures Trading Commission (CFTC) and the SEC due to objections by the House and Senate Agriculture Committees.

The Sun/Pluto opposition is transiting the Federal Reserve’s natal Sun in Capricorn opposite its Pluto in Cancer, reinforcing the need to shed light on the Fed’s secretive dealings and restructure its identity. Planetary oppositions involve a give and take interaction between the two energies in order to achieve equilibrium. The reform proposal would increase the Fed’s powers as the Fed would become the Systemic Risk Regulator in charge of all financial institutions that could pose a systemic risk to the financial system, including hedge funds and insurance companies. General Electric (GE) through its GE Capital unit is an example of a company that would come under the Fed’s supervision if Congress approves the Administration’s plan.

At the same time the Fed will have to give up some powers. The Fed Chairman will be a member* of a newly created Financial Services Oversight Council chaired by the Treasury Secretary. The council would decide what firms pose a systemic risk, identify regulatory gaps, and recommend firms to be classified as financial holding companies (FHC) that would fall under the Fed’s supervision. The Fed would not be able to make loans under Section 13.3 unless approved in writing by the Treasury Secretary. Several members of Congress would like to have the Fed’s regional bank presidents be confirmed by Congress rather than be appointed to their position by the banks they regulate.

As the planetary ruler of debt, Pluto rules mortgages and all types of loans. Pluto also rules anything occult (hidden). The good news for consumers is that the Fed would have to relinquish its regulation of consumer products over to the Consumer Financial Protection Agency (CFPA), a newly created independent agency to oversee credit, mortgage, and savings products, that would provide greater transparency so that documentation for mortgages, credit cards, and other financial products are easier to understand. The Justice Department would closely cooperate with the agency to ensure the CFPA’s rules are being enforced, and the CFPA would create an outside advisory panel that would coordinate its efforts with other regulators to ensure that no financial product goes unregulated.

These proposed changes correlate to a post I wrote in September 2007 on “The Fed’s Future” where I stated that the Fed’s purpose and scope would be transformed during this time. I also predicted that Ben Bernanke would not be reappointed Chairman and might even resign before his term expires on January 31. The Administration is calling for a “comprehensive review” of the Fed’s organization and structure, and if Bernanke is truly against the Administration’s plan to turn consumer finance over to a new agency, it’s hard to imagine President Obama will reappoint him for another term.

The Fed’s natal Sun/Pluto opposition also describes that the central bank is too beholden to the financial institutions it regulates. The Fed’s Capricorn Sun reflects that the Chairman for the most part is too enamored with the power and prestige that come with the job and Wall Street’s chief executives seek to use this to their advantage. Needless to say financial institutions are against taking away the Fed’s power to regulate consumer financial products. Or as one Wall Street executive told the Financial Times: “If the industry had a choice of an overall regulator, it would have chosen the Fed.”

The Fed’s chart shows that its actions have hurt rather than helped consumers. The Fed’s Pluto is in Cancer, a sign ruled by the Moon. The Moon represents consumers, and with the Fed’s natal Moon in Pluto-ruled Scorpio in the area of the chart representing financial speculation, the Fed has catered to the “shadow” banking system at the expense of consumers. To support “financial innovation,” the Fed chose to ignore the deceptive practices in consumer financial products from financial advisors through non-conventional mortgage products that led to the housing and credit bubbles. And the Fed refused to raise margin requirements which led to the dot com bubble. If the CFPA had existed, retail investors would not have been allowed to purchase such esoteric products as auction rate securities.

Just like his predecessor Alan Greenspan, Bernanke has made no attempt to balance the Fed’s Sun/Pluto opposition to strike a fair balance between the interests of financial institutions and consumers. In fact, both Bernanke and Greenspan tilted the scales in favor of financial innovation at the expense of consumers. Thus Bernanke’s hostility toward the creation of the CFPA is understandable but not very politically astute.

The level of suspicion over the Fed’s lack of transparency and secretive maneuvers is so high at this point that both parties are supporting Rep. Ron Paul’s bill (HR1207) and its Senate companion bill (S604) to audit** the Federal Reserve.

President Obama stated yesterday: “We seek to create a framework in which markets can function freely and fairly, without the fragility in which normal business cycles suddenly bring the risk of financial collapse; we want a system that works for businesses and consumers.”

Clearly creating the Consumer Financial Protection Agency is the key to mitigating the boom/bust cycle President Obama describes as it takes away the punchbowl from the Fed.

Related Posts: “Bernanke and the Fed’s Bogus Transparency”, “Bernanke Behind Threat To Oust Ken Lewis”, “Bernanke’s Bubble Lab”

*Other members of the Council will be the Chairmen of the CFTC, FDIC and SEC, and the Directors of the FHFA and the plan’s proposed new agencies, the Consumer Financial Protection Agency and the National Bank Supervisor.

**Congress already passed legislation authorizing the GAO to audit the Fed on AIG.

No disclosures.

WallStreetWeather.net Forecast For Week Of June 15, 2009

2009-06-14T18:16:00.002-04:00

Summary Of Last Week’s Influences:
Financial markets have a tendency to overreact to news when Mercury interacts with Jupiter. On Wednesday the market’s early bullishness was reversed after crude oil inventories were lower than expected. And the downward acceleration gained momentum after the 1:00 PM 10 year auction grew a “long tail” that forced the government to pay buyers a higher than expected interest rate.

Wednesday’s 10 year yield just under 4% propelled the interest rate on the 30 year fixed mortgage to 5.79% from just under 5% two weeks ago, injecting fear in the market that higher gas prices and mortgage rates will dampen any signs of economic recovery.

That sentiment reversed on Thursday as the market took a “glass half full” attitude. Or what I would equate to a lake coated with thin ice. It might look solid, but once you step on it you quickly realize it is not as solid as it initially appeared to be. Initial jobless claims were lower than expected, but continuing unemployment claims set their 19th straight record (6.816M). May Retail Sales were up 0.5%, but the increase was mostly attributed to higher gas prices.

These extreme swings in sentiment where the market views higher Treasury yields and rising commodity prices as a sign that economic conditions are improving only to be viewed a short time later as stoking inflation from too much government debt eroding the economy, can be attributed to Jupiter and Neptune conjoining in Aquarius, the sign of extremes.

Summary Of This Week’s Influences:
Jupiter’s influence will be particularly pronounced now through Wednesday as from Earth’s vantage point it appears to turn retrograde on Monday until October 13. Issues relating to ethics and trust, foreign matters, legal issues, higher education, philosophical and religious beliefs, sports, and publishing are highlighted now. The retrograde period is a good time to review and reconsider matters relating to these issues.

Speaking of publishing, Dow Jones (NWS), the publisher of Barron’s and The Wall Street Journal has two articles this weekend that articulate the influence of the Jupiter/Neptune conjunction on the markets.

Jupiter expands and Neptune inflates to form bubbles. Yesterday’s WSJ (“Stocks in the Black on Gusher of Cash”) calls the stock market’s rapid rebound since March and the rise in crude oil (Neptune) the “bailout bubble” as central bank liquidity and government stimulus spending has created a “global cash wave.” And when the bubble bursts, there will be an “ocean of liquidity” to mop up. Neptune rules the oceans, and Aquarius likes to make “waves” (which is what its symbol resembles). Aquarius and its planetary ruler Uranus relate to sharp and sudden market moves that go higher or lower than expected. And Uranus in Neptune-ruled Pisces reinforces the rollercoaster ride of bubbles that dissolve into thin air.

To quote the Barron’s cover story, markets move “Too Far, Too Fast” in “a pandemic of bullishness that is sweeping stock markets here and elsewhere around the world.” (Neptune rules contagions and Jupiter represents the global marketplace.) Jupiter’s optimism combined with Neptune’s hope provides the rocket fuel for forward-looking Aquarius to propel the market rapidly upward. As Barron’s panelist Scott Black observed, “investors are chasing any glimmer of hope”, fearing they will be left behind if they wait for fundamentals to support their belief.

Jupiter and Neptune first conjoined on May 27, two days before Neptune turned retrograde. The stock market was the focus at that time and leading up to the planetary pair’s next exact conjunction on July 10. Then the focus shifts to foreign matters and the Jupiter themes outlined above. Enthusiasm wanes as these energies begin to separate, and other planetary influences gain prominence. Barron’s panelist Felix Zulauf believes that this “first rally is just about done. The market might climb into July, but it will correct in the fall, with stocks retracing maybe 50% of the recent advance.”

Zulauf’s comments that “the financials are done, perhaps for a couple of years,” echoes the current and recent cycles of Mercury, Venus, and Mars in the banking sign Taurus challenging the Jupiter/Neptune alignment. Mars in Taurus challenging Jupiter/Neptune on July 6 is likely to spark a selloff on credit concerns and inflationary fears.

I will be writing more about these upcoming planetary cycles, but must give them a brief mention since Zulauf (whether consciously or unconsciously) neatly sums them up. Saturn will enter Libra the sign of balance on October 29. Pluto rules debt and Capricorn is ruled by Saturn, the planetary energy of structure and economic contraction. Capricorn rules government. Saturn in Libra will first exactly challenge Pluto in Capricorn (2008-2024) on November 15. Here’s how Zulauf sums that up:

“A long-term imbalance remains between overspending in the U.S., and over-producing in China. The financial crisis was the start of a move to greater balance that implies lower growth for both sides. The deleveraging process…has only started. It will run for several years. We are shifting debt from the private sector to the government sector which will lever up. These structural forces will continue to be a major restrictive factor in the world economy.”

Looking ahead, Zulauf says: “The real danger comes from mid-2010 through 2011. This won’t be a conventional business-cycle expansion, but a bumpy road.” In July 2010, Jupiter and Uranus in Aries, Saturn in Libra, and Pluto in Capricorn will form a cross shaped pattern. In these action-oriented (cardinal) signs, many dynamic changes will occur. This is a crisis point, but a crisis is really a dangerous (and exciting!) opportunity that will bring rapid scientific and technological advancements (unconventional Uranus in pioneering Aries). Just as a mother soon forgets the pain of childbirth upon holding and gazing into the face of the fruits of her labor, the more we are willing to clean up the mess now and go through the labor pains, letting go of the old structures that no longer serve us, the better we’ll be prepared to enage in all the new and exciting developments ahead.

But first we’ve got to get back to this week! Jupiter stationary through Wednesday is likely to bring bigger market moves at least intraday. On Monday the Last Quarter Moon in Pisces will reinforce the Jupiter/Neptune alignment as Pisces is ruled by both of these planets. Jupiter can make big moves in either direction as hype can turn to hysteria, but the largest planet in our solar system really prefers to be jovial.

When Jupiter went retrograde last year, former St. Louis Fed president William Poole said: “If the Fed is unwilling to reverse its excessively expansionary policy in the coming quarters, which is my take on likely policy, the Fed almost guarantees higher inflation.” Tuesday’s PPI and Wednesday’s CPI is likely to show greater inflationary pressures.

The Sun rules speculation; it will be interesting if we have a “wild Wednesday” as the Sun in dualistic Gemini will harmonize with Jupiter/Neptune while challenging Uranus in Pisces. The former are a more bullish influence, but Uranus is the wild card that likes to shake things up as its motto is “expect the unexpected.”

Monday, June 15, 2009
Positive trend bias.

Tuesday, June 16, 2009
Negative to choppy/mixed; improving conditions as day progresses.

Wednesday, June 17, 2009
Up early, then could hit some turbulence before resurging going into the close.

Thursday, June 18, 2009
Mildly up early, then choppy/mixed to negative.

Friday, June 19, 2009 (Quadruple Options Expiration)
Indices open mixed to moderately up before spending most of the day in negative territory.

No disclosures.

Lewis and Bernanke Both Played on Fears and Threats in BofA/Merrill Deal

2009-06-13T00:30:00.001-04:00

Published by WallStreetWeather.net

“In short, the Treasury Department had provided a $20 billion dowry for a shotgun wedding. But the question may be, ‘Who was holding the shotgun?’” – House Oversight and Reform Committee Chairman Edolphus Towns

On June 11 the House Oversight and Reform Committee questioned Bank of America (BAC) CEO Ken Lewis to ascertain whether he was pressured by Federal Reserve Chairman Bernanke and former Treasury Secretary Paulson to consummate the bank’s marriage with Merrill Lynch, or whether Lewis’ threat to back out of the deal was actually a strategy to get government assistance to complete the merger.

Chairman Towns said at the conclusion of the hearing the Committee needs to hear all sides of the story to put the pieces together and will call on Bernanke and Paulson to testify at an upcoming hearing. It will be interesting to see if they show up voluntarily or whether the Committee will have to issue subpoenas, which was how the Committee got the Fed to turn over the documents it requested for this hearing.

The new twist that Ken Lewis might have been manipulating Bernanke and Paulson was primarily pursued by Rep. Dennis Kucinich who remarked it was “quite possible that BofA put a gun to the head of the Fed by threatening to invoke a MAC” (material adverse change) clause in the merger agreement due to Merrill’s escalating losses.

A Federal Reserve email from Richmond FRB president Jeffrey Lacker (page 9) states that Bernanke thought the MAC threat “is irrelevant because its not credible.” In another email, (page 1) Fed staffers questioned BofA’s “due diligence process”, believing Lewis’ claim to be “somewhat suspect” since even though Merrill’s fourth quarter losses began to accelerate in mid November, those losses had been “observably underway over the entire quarter.”

Lewis told the Committee it was the sudden acceleration of Merrill’s losses that prompted him to contact Bernanke to tell him he was “strongly considering” invoking the MAC. The chart for the December 17, 2008 6:00 PM meeting with Bernanke and Paulson shows both sides would quickly reach agreement that the merger needed to happen since the planetary rulers representing Lewis (the Moon) and the government (Saturn) would exactly conjoin at 5:58 PM the following day.

The Moon conjoining Saturn in Mercury-ruled Virgo in the area of the chart representing contracts shows that both sides had anxieties about how they would steer this through. The Moon harmonizing with Mercury in Saturn-Ruled Capricorn indicates that Lewis was relying on the government to help him with his predicament. It’s a predicament Lewis would not have faced if during the panic of that Full Moon weekend when Lehman collapsed, he could have been patient and waited for Merrill to unravel and come to him at a much lower price. That’s how Barclays (BCS) ended up with the choicest morsels of the Lehman carcass.

Both sides have claimed they acted for the good of the country. The sign Cancer on the chart’s Ascendant* indicates the accuracy of their assertion since it exactly conjoins the USA’s Sun (nation’s identity). The Ascendant conjoining the USA Sun in Cancer also appropriately describes Bank of America (the biggest U.S. bank by assets), symbolized by its American flag logo.

The Sun conjoining Pluto represents leaders in very powerful positions. Pluto represents secrets, hidden agendas, and power plays. Scorpio ruling the area of the chart representing shareholders reflects that BofA shareholders would be kept in the dark about what was going on. Lewis said at the hearing that it is the job of BofA’s securities lawyers to tell him when he needs to publicly disclose information to shareholders.

Saturn represents government. It also represents the pressure the majority of Committee members felt the government was exerting on BofA to complete the Merrill acquisition. In a December 20 email (page 9), Jeffrey Lacker details a conversation he had with Bernanke who told him he “intends to make it clear that if they play that card (invoke the MAC) and then need assistance, management is gone.” Lacker writes that he forgot to tell Bernanke that “Ken Lewis is near retirement.” An email from Fed Governor Kevin Warsh (page 16) to Bernanke states that Warsh “reminded” BofA CFO Joe Price “that they are the ones who would look equally bad in eyes of market and regulators if they chose to terminate transaction.” Lewis kept reiterating that he didn’t view these comments as a threat but rather took the Fed’s serious tone to mean the government was very concerned about injecting additional systemic risk into a fragile economic environment.

Rep. Darrell Issa asked Lewis if Bernanke and Paulson pressured him to go through with the deal using tactics that a car salesman would employ. Rep. Jeff Flake questioned whether Lewis might be suffering from Stockholm syndrome as Lewis, ever mindful that BofA must keep its financial regulators happy, attempted to politely sidestep the issue. Lewis said that Bernanke “never said we should not disclose anything that was disclosable but did express interest in not calling a MAC several times.”

By December 21 the Fed had put together a “Talking Points” memo (page 11) outlining why the deal had to go through, and a Fed email the following day (page 4) confirming Ken Lewis agreed to “drop the MAC and work with the government to develop whatever support package might be needed for earnings announcement dates around January 20.”

As Rep. Kucinich remarked in his opening statement: “Due to the secretive and unaccountable conduct of the Fed throughout its interventions addressing the current financial crisis, many questions about the Bank of America-Merrill Lynch deal and bailout have, until today, remained unanswered.”

Kucinich aptly describes the Fed’s Sun in Capricorn opposing Pluto in Cancer. The June 21 Summer Solstice and the Cancer New Moon the following day conjoin the Fed’s natal Pluto and oppose the Fed’s Capricorn Sun. And during this time the Sun in Cancer will oppose Pluto in Capricorn, reinforcing this planetary pattern in the Fed’s chart.

The Fed will be forced to be far more transparent about its financial arrangements. Pluto in Capricorn conjoining the Fed’s Sun will transform the Fed’s identity and purpose. The Sun opposite Pluto reflects disagreements between Chairman Bernanke (Sun), the Fed governors and regional bank presidents, as well as members of Congress is likely to become more intense over time. The very foundation of the nation’s central bank must be rebuilt as the financial system has been severely weakened by the Fed taking the nation from one bubble to another and then deploying ad hoc solutions to handle the financial fallout.

*The Ascendant represents the zodiac sign rising on the eastern horizon at the time of birth.

No disclosures.

Nothing Gained: Banks To Repay TARP

2009-06-10T00:42:00.003-04:00

Published by WallStreetWeather.net

Yesterday’s announcement by the Treasury that 10 financial institutions who took TARP funds totaling $68.3 billion have been approved to repay the money is a classic example of the unexpected twists and turns that occur when bold new initiatives are begun when Mercury is retrograde.

Mercury represents thinking, communication, and movement. The three week period three to four times a year when Mercury appears to be moving backward from Earth’s vantage point is better suited for putting the RE prefix in front of everything you do, rather than starting something from scratch.

Born when Mercury was retrograde in Libra (September 24-October 15, 2008), the TARP was troubled from the start as it was spawned from the panic that ensued following the Harvest Moon collapse of Lehman Brothers. The hastily written legislation to remove toxic assets from banks’ books first failed to pass the House on September 29, but by the end of that week was signed into law by President Bush.

Venus rules Taurus (banking and finance) and Libra (our relationships involving money). Libra is symbolized by the scales of equal balance representing fairness and equality to all parties involved. With Mercury retrograde in Libra, then Treasury Secretary Hank Paulson thought by injecting capital into the nation’s largest banks it would put the weaker banks needing more capital on an equal footing to those banks who could manage without it. In fact, Paulson said at the time that receiving approval for TARP money is a badge of honor as it symbolized a healthy financial institution. And the Treasury encouraged these healthy banks to use their TARP money to acquire other banks.

One month later with Mercury moving forward in Scorpio, what had been concealed now got revealed. Paulson admitted he had scrapped the original purpose of the TARP before Congress even approved the legislation. And the “healthy banks take TARP” game was up shortly after that when Citigroup needed an additional injection, followed by Bank of America (BAC) in January to help it digest its acquisition of Merrill Lynch.

During the Venus retrograde cycle in Libra’s opposite sign Aries (March 6 – April 17, 2009), banks became increasingly desperate to repay TARP funds after Congress and the Administration sought to stir up populist rage over AIG bonuses and executive compensation. TARP money had become a “scarlet letter,” as JPMorgan Chase (JPM) chief executive Jamie Dimon said in the bank’s Q1 earnings call April 16. Goldman Sachs (GS) proclaimed it was their “patriotic duty” to repay the TARP.

Now Mercury, Venus, and Mars are in Taurus. In fact Mars is exactly opposite where it was on the afternoon of October 13, 2008 when Paulson called the bankers into his office and told them they would “volunteer” to take TARP funds. Mars in Scorpio then reflected the banks indebtedness to the government. Mars in Taurus now reflects the action the 10 financial institutions have taken to strengthen their capital cushion in order to repay the loan.

In order for the banks to be completely free of the government, they will have to auction or buy back the government’s warrants estimated to be valued at up to $4.6 billion. And since it’s the “taxpayer’s money”, shouldn’t the auction be public so interested “taxpayers” could participate?
Between now and July 6, Mercury, Venus, and Mars in Taurus will challenge the Jupiter/Neptune alignment in Aquarius. All the optimism (Jupiter) that has sent the banking sector on a rocket ride (Aquarius) of rapid gains over the last three months could begin to evaporate from larger than anticipated credit card and credit derivative losses (Neptune).

Saturn rules time, life’s lessons, and structures. On July 3 Saturn in Virgo will be exactly where it was on October 13, 2008. The 10 banks have been approved to pay back the TARP, but what lessons did Wall Street and Washington learn from the experience? Lifting the TARP from some of the banks might feel like the financial system is working again, but without a new roof, the next storm could find parts of Wall Street flooded out again.

No disclosures.

WallStreetWeather.net Forecast For Week Of June 8, 2009

2009-06-07T15:12:00.003-04:00

Summary Of Last Week’s Influences:
Monday’s news of GM’s bankruptcy filing was old news to a market addicted to growth (Jupiter) and its reflationary (Neptune) prospects. Bears view the ever expanding supply of Treasuries to be sold and the Federal Reserve monetizing the flood as increasing inflation through higher Treasury yields and higher commodity prices. By Friday commodities were dropping and the dollar was strengthening on the belief that the Fed could tighten monetary policy as soon as September (which is when the Fed stated in March it would complete its purchases of up to $300 billion of longer-term Treasury securities).

Jupiter conjoining Neptune in Aquarius has taken investor sentiment from deflation to inflation, as I wrote in a post last June. Now that a new government sponsored bubble has formed, will the Federal Reserve have the guts to prick it in time by raising interest rates as the usually dovish San Francisco FRB president Janet Yellen suggested in a speech Friday?

Summary Of This Week’s Influences:
Venus, the planetary ruler of banking and material assets, has now moved into its “home” sign Taurus until July 5. Venus had been in Aries since February 2, due to the planet from Earth’s vantage point appearing to move retrograde from March 6 to April 17.

Venus turning retrograde in Aries on Friday, March 6 corresponded with the S&P’s intraday low of 666.79 that initially spooked Wall Street. Retrograde planets tend to reverse trends, and after the DJIA and the S&P’s 12+ year closing lows the following trading day, the stock market has proven since then that 666 was truly a revelation of a market revival. Contrary to the propaganda spread by certain cultures and religions, 666 and Fridays resonate to the energy of Venus.*

The cycle of Venus in enthusiastic and fast moving Aries reflects the rapid rise of global stock markets and commodities. Aries likes to get in on the action first before others climb aboard. And since Venus rules banks, the banking sector was one of the biggest beneficiaries of the gains. The DJIA has gained almost 35% since the March low, but the KBW Bank Index (BKX) has gained close to 90%. I wrote in last week’s Forecast that Taurus the bull likes nothing better than watching their money grow. This energy’s weakness is being too slow to respond to changing conditions, and must keep in mind that as a pragmatic earth sign,** a paper profit is not an actual profit.

While Venus is just getting comfortable in Taurus, Mercury will complete its extended stay in Taurus, moving into its “home” sign Gemini late Saturday until July 3. The planetary energy of communication and movement has been in Taurus most of the time** since April 9, due to being retrograde May 7-30.

Due to Mercury’s retrograde cycle, this week will mark the third time that Mercury in Taurus will interact with Uranus (previously on April 24 and May 21) and Neptune (April 25 and May 20) on Tuesday, followed by Jupiter (April 22 and May 20) on Wednesday. The May dates listed represent Mercury’s retrograde encounter with these planets that reversed April’s upbeat thoughts. News can be conflicting and confusing (because it might just be a rumor); Jupiter’s tendency is to overreact.

With Mercury, Venus, and Mars in Taurus this week, a great deal of the market’s news and action will be related to banks and bankers.

While all the largest banks received a passing grade when the government released the results of the stress test on May 7 (the day Mercury went retrograde), Monday is the deadline for banks that were told to raise additional capital to submit their plans outlining how they will do so. (Banks have until November 9 to raise the additional capital.)

When the market opens on Monday, Citigroup (C) and General Motors will be replaced in the DJIA by Cisco Systems (CSCO) and The Travelers Companies (TRV). It is appropriate that Travelers replaces Citi in the Dow, since Citigroup was formed by the merger of Citicorp and Travelers Group in 1998. Citi spun off Travelers in 2002, and on April 2, 2004 the merged St. Paul Insurance Companies and Travelers Property Casualty began trading under the symbol STA. On February 27, 2007 the company was renamed Travelers and began trading under the ticker symbol TRV after reaching an agreement to reacquire its red umbrella logo from Citigroup.

Transiting Saturn in Virgo opposing Citigroup CEO Vikram Pandit’s progressed*** Sun in Pisces along with Pluto in Capricorn conjoining his natal Venus and challenging natal Jupiter in Libra, reflect the FDIC putting pressure on Pandit to resign, according to a report in Friday’s Wall Street Journal.

The WSJ cites the origins of the animosity between Citi and the FDIC emanating from the FDIC’s original consent to the shotgun marriage between Citi and Wachovia until FDIC Chairman Sheila Bair substituted higher paying suitor Wells Fargo (WFC) to marry Wachovia. I wrote about how the planetary energies were temporarily altering Pandit’s usually calm public persona then; subsequent articles about Pandit in New York magazine and now the Journal article confirm his anger did go off the deep end at the time.

While there are things Pandit could have done quicker and differently, he inherited the mess at Citi. As Chairman of the FDIC, Sheila Bair was against raising FDIC deposit insurance. Had FDIC insurance on bank deposits been raised permanently and early in the crisis it would have prevented the bank runs at IndyMac, Washington Mutual, Wachovia, and National City that particularly caused tremendous damage to the financial system and to consumers and small businesses.

I wrote back in January that I thought Bank of America CEO Ken Lewis might be forced into retirement in April. Lewis was forced to give up his Chairmanship on April 29, and the pressure is still on Lewis and the bank’s Board for management changes. Friday former Federal Reserve Governor Susan Bies and three other new members were added to BofA's Board.

On Thursday at 10 AM Ken Lewis will appear before a House Oversight Committee hearing on “Bank of America & Merrill Lynch: How Did a Private Deal Turn Into a Federal Bailout?” . Committee members will press Lewis to explain discrepancies between his public statements about the deal and what he said at his deposition in February to New York AG Cuomo. Fed Chairman Bernanke will be conspicuously absent at the hearing, although the Committee has requested numerous documents from the Fed. I guess Bernanke’s too busy meeting with the Fed’s new lobbyist to attend. Now that’s what I call transparency!

The Treasury will auction a total of $127 billion in short and longer term securities this week, and the market will be closely watching the results of Wednesday’s $19 billion in 10 year notes and Thursday’s $11 billion in 30 year bonds to see if investors continue to be concerned about all the government debt and the Fed’s excess liquidity stoking inflation.

Monday, June 8, 2009
Indices open down and improve to choppy/mixed to mostly positive.

Tuesday, June 9, 2009
Swings from negative to choppy/mixed to positive.

Wednesday, June 10, 2009
Positive

Thursday, June 11, 2009
Negative

Friday, June 12, 2009
Negative trend bias; improving conditions in afternoon.

*All of these so-called negative energies such as 666, the number 13, and in particular, “Friday the 13th” are energies that relate to females and feminine energy.

**Mercury was briefly in Gemini April 30 to May 13.

*** A mathematical calculation that moves the planets forward in time as a method of prediction.

No disclosures.

Consumer Spending and Healthcare Seeking Balance in U.S. and China

2009-06-05T20:39:00.005-04:00

Published by WallStreetWeather.net

As the ruler of the zodiacal sign Taurus, Venus represents money. And as the ruler of Libra, Venus represents our relationships involving money. Libra is symbolized by the scales of justice, as Libra energy engages in diplomacy to ensure each party is treated fairly and equally to keep the scales of justice balanced.

So it was appropriate that Treasury Secretary Geithner visited China while the Moon was in Libra, which tends to put people in a more cooperative mood, raising the potential that the parties coming together can reach agreement.

The USA was born with the Sun in Cancer challenging Saturn in Libra. The U.S. likes to talk about fairness, but seeks to tilt Libra’s scales of justice in its favor by touting our status (Saturn) as the world’s most powerful nation and the world’s reserve currency. The Sun challenging Saturn in Libra means the U.S likes to do this in a paternalistic, “father knows best” kind of way. The U.S. sees itself as a beacon of democracy and freedom, and seeks to promote those principles around the world. But those principles can be conveniently cast aside in exchange for a relationship with another country that has the material resources we want.

With the USA’s Saturn conjoining China’s Mercury and Neptune in Libra, the U.S. government is willing to overlook the fact that it is doing business with a communist regime with an abysmal human rights record. The U.S. is addicted to China’s cheap goods, along with the goods and services U.S. companies can establish in this emerging market. China’s Venus is in Scorpio, reflecting its position as the world’s largest holder of U.S. government debt. So let’s ignore the fact that the Treasury Secretary visited China but left just before the 20th anniversary of the Tiananmen Square massacre because his visit was about maintaining harmony (Libra) so the Chinese leadership remains confident (China’s natal Sun in Libra) about buying U.S. debt (Venus in Scorpio).

In a speech at Peking University, Geither said: “A successful transition to a more balanced and stable global economy will require very substantial changes to economic policy and financial regulation around the world. But some of the most important of those changes will have to come in the United States and China.” The Treasury Secretary then outlined what must be done to stabilize the two nation’s economies.

The symbol for Venus resembles a hand mirror, reflecting that the U.S. and Chinese economies have become too imbalanced in one direction. Geithner said: “In the United States, saving rates will have to increase, and the purchases of U.S. consumers cannot be as dominant a driver of growth as they have in the past.” The Treasury Secretary said that China needs to develop into a more domestically driven economy as “the world is not going to be able to look to the United States, as in the last few recoveries, and expect US consumption to help the world get out of this.”

Geithner spoke of what both countries are lacking when they look at their reflection in the mirror: the need for healthcare reform. To assuage the Chinese government that fiscal spending now is “critical to our long-term fiscal health,” Geithner said “we have to put in place comprehensive health care reform that will bring down the growth in health care costs, costs that are the principal driver of our long run fiscal deficit.”

The Chinese are big savers because despite living under a communist regime, China has a weak social safety net. According to the World Bank, families making less than $200 a year still manage to save 18% of their income. The Chinese save for education, retirement, and to pay for healthcare costs. When it comes to healthcare, China has such a free market capitalist system that even Republican members of Congress would probably prefer to hold on tight to their government sponsored healthcare benefits.

An excellent article by Geoff Dyer in the Financial Times (“Sickness of the savers”), describes how patients will not be admitted to a hospital in China until they pay cash up front and wait for reimbursement later. Once admitted, patients also need money to pay for bribes. Since up to 40% of a hospital’s revenue comes from profits from drug sales which are linked to doctor’s salaries, there are huge financial incentives for doctors to overprescribe expensive drugs and recommend patients take unnecessary tests.

China is moving toward rectifying this situation, committing to making health insurance a basic right. In 2008, the Chinese government committed to providing universal health insurance coverage, with the goal of getting 90% insured by 2011 and everyone by 2020.

In terms of spending and savings, the U.S. and China are mirror opposites. But in terms of ineffective health care systems, both nations follow the same path. Treasury Secretary Geithner is suggesting that the US and China’s paths will converge in both consumer spending and healthcare. What this means for the U.S. is that healthcare will become a right and we will be more balanced in the distribution of health services to all our people.

Saturn represents government and all types of structures. Saturn’s transit in Libra* will be even more influential during the time it overlaps with revolutionary Uranus in pioneering Aries and transformational Pluto in Capricorn. These planetary energies will impact key natal planets in both countries charts, particularly from mid July to mid August and November/December 2010 and March through August 2011, ushering in profound changes that bring China and the USA’s economic, physical and societal structures more into balance.

*Saturn will be in Libra from October 29, 2009 to April 18, 2010 and July 22, 2010 to October 6, 2012.

Related Post: “President Obama Declares ‘The Stars Are Aligned’ For Healthcare Reform This Year”

USA: July 4, 1776 5:10 PM Philadelphia, PA
People’s Republic of China: October 1, 1949 3:15 PM Beijing

GM Needs A Unified Message To Rise From The Ashes of Bankruptcy

2009-06-02T00:42:00.006-04:00

Published by WallStreetWeather.net

President Obama said yesterday that “for years GM has been buried under an unsustainable mountain of debt,” which literally describes the transit of Pluto in Capricorn (2008-2024), as Pluto rules debt and Capricorn rules mountains and structures. Pluto rules bankruptcy which is a material representation of the soul’s journey of birth, transformation (death), and rebirth (reincarnation). With Pluto in Capricorn opposing the USA’s natal Venus (money), GM’s bankruptcy is expected to cost the US government $50 billion.

The Sun represents a company’s identity and Mercury its message. (Mercury rules automobiles.) Just as physicists have long attempted to figure out how to combine unrelated and incompatible theories into a single unified theory or message to understand the universe, Pluto in Capricorn conjoining GM’s progressed* Sun and Mercury in Capricorn through November 2011 will require the automaker to come up with a unified message that neatly sums up what the GM brand is to successfully rise like the phoenix from the ashes of bankruptcy. Otherwise GM will be forever drowning in a black hole of red ink.

GM filed for bankruptcy in Manhattan at 7:57:51 AM Monday when the Moon, the ruler of the bankruptcy chart, was Void-of-Course** in Mercury-ruled Virgo. Even though GM had already secured agreements with the bondholders, the UAW, and the US and Canadian governments prior to the filing, the VOC Moon greatly increases the potential that the bankruptcy proceeding will take some unexpected twists and turns that deviate from its projected schedule of exiting bankruptcy by August 1. The Moon Void in Virgo can make it more challenging to uphold contractual arrangements and stay on message.

Mercury in Taurus challenges the Jupiter/Neptune alignment in Aquarius appropriately located in the area of the chart representing bankruptcy. This means that GM and the parties involved in the bankruptcy have high hopes and expectations that the bankruptcy restructuring will be short and sweet. The cost of operating GM during the bankruptcy process is likely to be higher than projected. Mercury rules both Gemini and Virgo. The Sun in Gemini challenging Saturn in Virgo in the area of the bankruptcy chart representing GM’s business can create delays and obstacles that slow down the bankruptcy process, as well as a further contraction of GM’s products and production beyond what was originally planned.

Pluto destroys what is no longer viable, and bankruptcy has forced GM to concentrate on fewer new models. CEO Fritz Henderson remarked at a news conference Monday afternoon that instead of delivering 15 new mediocre models of which 4 or 5 might be successful, GM must now be limited to 4 or 5 new models that all must succeed. Henderson was eager to tout GM’s few success stories such as the Chevy Malibu and Cadillac CTS, but neglected to tell the public what they should expect in terms of GM as a whole. Will GM become small and focused enough so that every product can be made a success?

Henderson’s reflation theme moved the bond market today but failed to bring GM closer to conveying a unified message of who the “new GM” is. GM is signaling that gas prices will inflate as the economy recovers, driving consumer behavior toward more energy efficient vehicles. Yet GM has chosen to retain the GMC truck brand as part of the “new GM.” How do three SUV brands (Chevy, GMC, and Cadillac) convey a unified message of fuel efficiency in the new GM?

As an example of what I mean, what message does BMW’s slogan “the ultimate driving machine” conjure up? Perhaps their cars handle like they’re on rails. How about Toyota (TM) quality or Honda’s (HMC) very low emission cars? These automakers have created a unified message that is embedded in their product characteristics that customers can count on, from their lowest priced to most expensive models.

Henderson believes that the launch of the new Camaro will create a “halo effect” of excitement that will entice people into Chevy showrooms. But that is the same attitude GM took with the G8 which instead of generating a halo, was overshadowed by the mediocrity of the rest of the Pontiac line. But Fritz Henderson would probably ignore this example since Pontiac is part of the “old GM” to be shed in bankruptcy.

GM touting this brand and that model is part of the formula that brought what was once the world’s largest manufacturer into bankruptcy court yesterday. Management never took heed when Ross Perot told GM two decades ago that “you have to be the best at something.” No car company can have unrelated and incompatible messages that can be all things to all customers. The closest unified message GM currently has could be summed up as “everything mediocre.” And mediocrity – particularly in bankruptcy – is not going to whet the customer’s appetite for the General’s products.

In other words, if you can’t get 10 out of 10 people to tell you what it means to buy a GM vehicle, then GM is still lost in space.

* A mathematical calculation that moves the planets forward in time as a method of prediction.

**The period of time when the Moon (our emotional barometer) does not form any relationships to a planet before entering a new zodiacal sign. This time period is best suited for anything where no specific outcome is desired, as actions taken during the Void-of-Course period might not turn out as planned. On June 1 the Moon became Void after opposing Uranus in Pisces at 4:32 AM and remained Void until the Moon entered Libra at 11:17 AM.

Related Posts: Analysis of the Detroit Automakers: Part I, Part II, Part III; Rick Wagoner; Fritz Henderson.

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

No disclosures.

WallStreetWeather.net Weekly Forecast For Week Of June 1, 2009

2009-05-31T11:35:00.002-04:00

Summary Of Last Week’s Influences:
Reflation is the buzzword to describe the market’s rise over the last three months and the stampede back into commodities. It is also a perfect description of expansive Jupiter conjoining with inflationary Neptune.

But as Investopedia warns, government intervention to curb falling asset values has never succeeded and ultimately ends up making conditions worse, postponing the recovery. Last Wednesday (the day Jupiter exactly conjoined Neptune), the yield on the 10 year note climbed to 3.732%, its highest level since last November. Bulls attribute higher Treasury yields to investors shifting to higher yielding investments after seeing signs of economic “green shoots.” But the “bond vigilantes” view the nation’s expanding debt combined with the Fed “printing money” as a recipe for disaster. Jupiter represents trust and foreign relations, and foreign governments are not completely confident they can trust the US government to spend its way out of the recession.

Although the yield on the 10 year had retreated to 3.467% by the end of the week, Jupiter and Neptune conjoining in Aquarius indicates that inflation is rising and can spiral out of control quicker than Bernanke can blink. This is because Jupiter expands and Neptune knows no boundaries. Aquarius creates price spikes that move quicker and higher than anticipated. Bernanke wants inflation, but these energies can bring too much inflation, too fast. The only areas of deflation to be found are in certain products and services that consumers do not have to have to survive.

Oil is ruled by Neptune, and Neptune’s energy is particularly pronounced now as the planet turned stationary retrograde* Friday, further reflating the price of crude oil which closed the month of May with its biggest monthly gain in 10 years. (Oil closed at $66.31 Friday). Precious metals and other commodities also continued to gain.

As I described in “Wall Street and the Consumer in Parallel Universes,” Jupiter/Neptune conjoining the USA’s natal Moon is why consumers feel more optimistic about the future. Consumer confidence surveys by the Conference Board and the University of Michigan came in higher than expected, with the biggest gain coming from “future expectations.” It is this feeling of optimism that is causing financial markets to get too far ahead of themselves and speculators to grab up foreclosures despite the fact that underlying fundamentals are still weak. Yet the S&P/Case-Shiller Home Index continues to fall, down 18.7% in March, a record year over year decline. On a BofA Merrill Lynch webcast the other night, Robert Shiller said: “I would be concerned about buying a house right now as it could be worth 20% less next year.”

With Mercury retrograde, Jupiter conjoining Neptune, and Neptune turning retrograde all in the same week, I thought that most of my daily predictions would end up reversed. As promised in last week’s Forecast, here are the grades for last week’s unpublished prognostications (what was incorrect appears in parenthesis).

Tuesday: D (Thought indices would lose momentum, ending only moderately up at the close.)
Wednesday: F (Thought market would turn positive in the afternoon.)
Thursday: F (Thought would close negative.)
Friday: A

Summary Of This Week’s Influences:
After being retrograde May 7-30, Mercury slowly begins moving forward again this week, retracing the path it originally traveled on April 22-24. (Mercury will move forward into new territory June 16.)

Mars moves into Taurus this afternoon until July 11. Mars likes to move fast, but Taurus prefers to take it slow and steady. Venus will move into its “home” sign Taurus on Saturday until July 5. Mercury, Venus, and Mars will be in Taurus from June 6-13. Taurus rules banking and material resources. As the first sign of the earth element, Taurus is interested in tangible assets and fundamental values. This is in contrast to the sojourn of Venus and Mars in fiery, fast trading Aries and Jupiter/Neptune in airy Aquarius that are based on possibilities or derivatives of real value.

Because the Jupiter/Neptune alignment is of a longer duration and is particularly influential through July, there remains a strong desire to keep the bear market rally going. Besides, Taurus the bull likes nothing better than asset accumulation. As a fixed sign, Taurus energy tends to be reluctant to make changes, running the risk that profits begin to evaporate.

The Moon in Libra challenging Pluto in Capricorn on Monday, aptly reflects that after obtaining agreement (Libra) from the UAW and a majority of unsecured bondholders, General Motors (GM) will file for Chapter 11 bankruptcy (Pluto) restructuring (Capricorn). President Obama is scheduled to speak about the filing in the morning, while GM CEO Fritz Henderson has planned a midday press conference in Manhattan to discuss the filing. (The Moon enters Libra at 11:17 AM.) Meanwhile Treasury Secretary Geithner, one of the members of the Auto Task Force, will be in China urging the Chinese government to transform their nation into a domestic consumer driven economy since US consumers are tapped out.

Fed Chairman Bernanke will testify before the House Budget Committee on Wednesday at 10:00 AM on “Challenges Facing the Economy.” As a follow up to my post on “Bernanke and the Fed’s Bogus Transparency,” the GAO is making preparations to audit the Fed over its handling of American International Group (AIG). On May 21, AIG Chairman & CEO Ed Liddy announced he would resign as soon as a replacement is found. Throughout his tenure, Liddy has emphasized that Federal Reserve officials were involved in the decision making process as they occupied AIG’s offices and attended Board meetings.

The Sun in Gemini challenges Saturn in Virgo on Friday, requiring mental discipline to sort through all the information to ascertain what’s relevant to efficiently and cost effectively tackle the job. Saturn represents contraction, and Virgo the workforce. The May employment report is released today. Economists anticipate a loss of around 530,000 jobs and a 9.2% unemployment rate. The market’s reaction to the report could be better than expected, perhaps due to revisions or employers who cut back hours instead of laying off in the hope that business picks up later this year. The President or government leader and/or a prominent CEO might come out with more of the “we’re about at the bottom/worst is almost over” remarks to boost investor confidence.

Monday, June 1, 2009
Negative trend bias.

Tuesday, June 2, 2009
Negative trend bias; improving conditions in the late morning. Could weaken again and regain traction in the final hour.

Wednesday, June 3, 2009
Indecisively swings from negative to choppy/mixed conditions improving to positive in afternoon.

Thursday, June 4, 2009
Positive.

Friday, June 5, 2009
Choppy/mixed to mostly positive trend bias, but could deteriorate into the close.

*Planets do not really move backwards but appear to from Earth’s vantage point.

No disclosures.

WallStreetWeather.net Forecast For Week Of May 25, 2009

2009-05-25T19:27:00.004-04:00

Summary Of Last Week’s Influences:
Financial markets last week certainly reflected they were driving under the influence of Mercury retrograde squaring off with Jupiter and Neptune. Mercury represents communication and movement, and markets tend to lose their sense of direction when retrograde. Mercury retrograde certainly took the stock market on a circular route that in spite of all the gyrations left the major indices just slightly higher than where it left off the previous week. Jupiter and Neptune together in Aquarius saw Monday’s extreme optimism and euphoria quickly fade into uncertainty over how strong those much touted “green shoots” really are.

The overzealous enthusiasm of Mr. Green Shoots “printing money” at the Fed saw the yield on the 10 year note rise 32 basis points by Friday’s close to 3.455%. While Bernanke was out searching for any sign of deflation, the dollar weakened to its lowest level this year and crude oil closed at its highest level for 2009 on Wednesday ($62.04).

As Dallas FRB president Richard Fisher told Saturday’s Wall Street Journal, the most frequent concern raised during his recent trip to Asia was about the Fed’s purchase of Treasurys. (China has been buying short-term treasuries over longer maturities in the last eight months to protect itself against a sharp increase in bond yields in the event Bernanke’s bond bubble bursts.) After S&P lowered its outlook on the UK’s sovereign debt from stable to negative Thursday for a possible downgrade following the next General Election, the media was hyping comments by PIMCO’s Bill Gross that the US “could be next.” According to Friday’s Wall Street Journal, a five year CDS contract on US debt was $37,500 for every $10 million insured. But a five year CDS on France’s debt cost $36,500.

This latest development brought more gold bugs out of the woodwork, despite gold jewelry sales at a 20 year low. Like oil, gold is not trading on fundamentals but on the anticipation of more inflation in the pipeline as a result of all this debt issuance. Jupiter expands and Neptune’s tendency is to inflate into a bubble.

What do loaded guns and credit cards have in common? Apparently physician Senator Tom Coburn has picked up on the USA’s natal Mars challenging natal Neptune through his Amendment attached to the credit card bill. Mars rules weapons, and Neptune rules ideologies, as well as those plastic credit cards. And now you don’t have to leave home without either one of them, as under the CARD Act of 2009 that President Obama signed Friday, you can now take a loaded gun along with a credit card into America’s national parks. (BTW, the CARD Act was first introduced in Congress on January 22 - the last time Mercury was retrograde.)

Summary Of This Week’s Influences:
This will probably be another light volume week since it’s a holiday week. This week features Jupiter exactly conjoining Neptune on Wednesday, bringing a giant dose of optimism and euphoria or hysteria that grows like a contagion. With the planetary pair conjoining in wild and crazy Aquarius and Mercury retrograde, who knows? I’ll keep my prognostications private this week and rate myself Bob Toll-style in next week’s forecast.

Most likely it will probably be another week of choppy/mixed conditions that give way to more volatile and bigger moves in either or both directions as the week progresses. Mars in Aries interacting with Jupiter and Neptune Tuesday and Wednesday can accelerate the speed of the market moves. My post “Wall Street and the Consumer in Parallel Universes,” explains the three exact alignment of Jupiter and Neptune this year.

Neptune’s energies are extra potent from May 24 to June 2 as from Earth’s vantage point the planet will appear to be stationary in the sky, turning retrograde early Friday. Neptune rules interest rates, inflation, and oil and these are usually key issues when Neptune's energies are pronounced. On Tuesday, Wednesday and Thursday, the Treasury will auction a total of $162 billion in new debt.

Neptune rules clouds and fog that can create confusion that obscures our minds from thinking clearly. Is it real or just rumor and illusion? Neptune is about opening up our creative and intuitive faculties so we’re sensitive enough to pick up on the subtle nuances that are not always readily apparent analytically. Taking some time to tune out in favor of some R&R can be particularly productive this week. Mars in Aries favorably aspecting Jupiter and Neptune offers the opportunity to be proactive about developing creative ideas/projects that previously got pushed aside in favor of more immediate obligations.

Neptune rules drugs and chemicals. In “Project Solar: Merck & Schering-Plough’s Reverse Merger,” I wrote that legal issues would probably arise in late May over Schering’s revenue sharing agreement with Johnson & Johnson (JNJ) for Remicade. This week J&J is expected to begin formal arbitration for a return of J&J’s full rights to market and sell Remicade and its improved version Simponi outside the US, according to the Financial Times.

Individual investors (many who are senior citizens on fixed incomes) hold about 20% of the $27 billion in unsecured debt that General Motors (GM) and the government are asking they swap it for a 10% equity stake in GM to prevent the automaker from going into bankruptcy. If the bondholders accept the offer, they will get 225 newly issued GM shares per $1,000 face value, but then GM will execute a 1 for 100 reverse split. The Fed’s monetary policy of low interest rates pushed these investors to seek yield through higher risk investments. As bondholders, these investors thought they would escape punishment by the government as the government has protected the bondholders while wiping out the shareholders in bank failures. Tuesday is the deadline for their decision, but as I’ve written before*, GM is headed for bankruptcy court.

Mercury moves direct Saturday evening with the Moon in Mercury-ruled Virgo. Reconfirm schedules, review all the fine print, fully charge electronic devices, and run backups and security scans on computers.

No disclosures.

*Link to previous Weekly Forecast talks about Henderson and Wagoner. It links to a December post that contains the links to my three part series on the automakers.

Wall Street and the Consumer in Parallel Universes

2009-05-24T22:24:00.003-04:00

Published by WallStreetWeather.net

Wall Street is optimistic about the future and so is the consumer. However, they are living in parallel universes, envisioning a different future. The Federal Reserve is inducing Wall Street and investors into believing that the consumer economy of the last two decades will be revived, while consumers themselves are not under the illusion (or have the luxury) of repeating their past mistakes.

Jupiter symbolizes optimism and expansion and is about to exactly conjoin Neptune (hope and illusion). Jupiter and Neptune will conjoin in the same degree in futuristic Aquarius on May 27, July 10, and December 21, 2009. This marks the first time Jupiter and Neptune have conjoined in Aquarius since 1843.*

The Moon is prominent during the three times Jupiter and Neptune form an exact alignment. The Moon represents consumers as the lunar energy describes what we need mentally and physically to feel safe and secure. On May 27 the Moon will be in its “home” sign Cancer, ruler of family, food, real estate, and consumables in general. The Moon in Aquarius will conjoin the Jupiter/Neptune alignment on July 10 and December 21. On all three occasions Jupiter and Neptune will conjoin the USA’s natal Moon in Aquarius.

Aquarius and its planetary ruler Uranus is known as the great awakener. Planets in Aquarius represent a wakeup call for reform through breaking free from outmoded ways of thinking and doing things. And because the Moon plays a prominent role at the time of these exact Jupiter/Neptune alignments, consumers can exhibit a greater tendency to feel (Moon) more optimistic (Jupiter) and hopeful (Neptune) about the future (Aquarius). Jupiter and Neptune have been closely conjoined since early May and will continue to be through July, and then again during December. (Because these are slow moving planets, they have influence in the time frame before and after being exact.)

Through its monetary policy of near zero interest rates and huge purchases of agency securities and Treasury debt, the Federal Reserve is trying to revive consumer spending. Yet despite the Fed’s efforts to keep mortgage rates below 5% to spur home sales and refinancing, much of the uptick in home sales can be attributed to purchases of foreclosed homes by speculators. And homeowners who qualify to refinance tend to be more inclined to put the money saved towards paying down debt and increasing their savings.

Jupiter and Neptune in Aquarius is about individuals (Aquarius) having faith (Neptune) in their own truth (Jupiter) and not the dogma dictated by the Fed’s economic models. This is why consumers feeling more optimistic and hopeful about the future does not translate into a revival of a consumer-based economy reminiscent of the 71% of GDP during the housing bubble. The fact that Wall Street and Aquarius energy is always forward-looking is only grasping one facet of this dynamic. The other component is that Aquarius energy is progressive rather than wasting energy trying to recreate the past. Aquarius is about moving forward into the realm of the unknown which by its nature is not reliably predictable.

This is the time to expand horizons (Jupiter) and step beyond the barriers and boundaries (Neptune) to do something new and different (Aquarius). Consumers have been deeply wounded and need to heal. The old philosophy of believing you could buy everything on credit** as the economy continued on a never ending upward trajectory has turned dreams into nightmares. For millions of consumers the debt has become a mountain too high to easily descend from (Pluto in Capricorn).

The government and Wall Street must be getting high on a pretty powerful mind altering substance (Neptune again!) to believe that consumers carrying a high debt burden can once again rescue the economy. Consumers have little fire power with miniscule or no savings and shrunken retirement accounts, in an environment of rising unemployment. And the consumers who are responsible enough to be in reasonably good financial condition are not likely to play ball with the Fed, even though those are the consumers most likely to take advantage of the Fed’s mortgage refinancing efforts.

The Federal Reserve is not concerned about inflation, but Jupiter/Neptune is a sure signal that inflation has arrived, even if cloaked in a slightly more unconventional (Aquarius) form. Jupiter expands and exaggerates, and Neptune inflates to form bubbles. And the Fed alludes that the inflation is just imaginary.

The USA is a debtor nation with natal Pluto (debt) in the area of the USA chart representing the economy. Buyers begin to pull back from purchasing treasuries out of the inflationary concern the government is issuing too much debt. With the nation’s central bank printing money, the only way to unload all the debt issuance is through rising yields. As treasury yields rise it will become increasingly more difficult for the Fed to keep a lid on interest rates.

Oil is a perfect example since it is ruled by Neptune. Economic fundamentals do not support the rapid rise in the price of oil since it is in abundant supply (Jupiter). But since oil is traded in USD, concerns over the USA’s massive debt binge has created dollar weakness which translates into higher oil prices.

As the influence of Jupiter and Neptune begins to wane, investors will see it was nothing more than a short term pleasant interlude known as a bear market rally. The next phase of the economic crisis could begin in late summer and is likely see the stock market break through its early March lows as the nation must grapple with the enormous structural changes it has spent years attempting to postpone.

*Jupiter and Neptune conjoin about every 12.5 to 13 years. Their last alignment was January 9, 1997 in Capricorn.

**Neptune rules credit (from the Latin “to believe”).

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

WallStreetWeather.net Forecast For Week Of May 18, 2009

2009-05-17T18:24:00.002-04:00

Summary Of Last Week’s Influences:
As last Tuesday’s Wall Street Journal observed: “Stocks fell as investors reassessed some of their upbeat bets of the past few weeks amid concern the market may have rallied too far, too fast.”

Reassess, reform, review. Putting the re prefix in front of everything you do is the key to working with Mercury’s energies during the time (May 7-30) the planetary energy of communication and movement appears to be retrograde from Earth’s vantage point.

When Mercury is retrograde, financial markets tend to get choppy with no clear sense of direction. When Mercury turned retrograde on May 7, the stock market reversed its bullish bias. But bullish sentiment returned the following day. Then stocks reversed on the following trading day (Monday, May 11). The Journal attributed Monday’s action to “Bulls and bears clash on repercussions* of the moves by Capital One (COF), Key Corp. (KEY), and US Bancorp (USB) to raise capital, and GM’s (GM) Fritz Henderson saying bankruptcy is ‘probable.’”

Mercury is often referred to as the trickster, and tends to exhibit this trait in full form when retrograde. (This is Mercury reminding us to maintain our sense of humor.) Beyond financial markets being up or down one or two days and then reversing, Mercury is changeable and fond of variety. Even if market sentiment dominated in one direction, the indices are more prone to being choppy and/or mixed intraday. Everything got thrown into the mix on Friday when the indices opened slightly down, reversed five minutes later, were choppy/mixed and positive biased in the morning before heading down in the afternoon.

Volume was light last week, perhaps attributed to investors relaxing on the sidelines until Mercury moves forward again.
:-) Not that Mercury retrograde really matters if limit orders have been placed to buy and sell.

Each day of the week resonates to a certain planetary energy and Wednesday is Mercury’s day. Last Wednesday Mercury re-entered Taurus, the sign of banking/finance and values. (Mercury will be in Taurus until June 13.) Banks stocks fell as more financial companies raised capital to pay back the TARP. Treasury Secretary Geithner announced the Administration is working on a plan to reform and revise the OTC derivatives market. Customized contracts would be subject to recordkeeping and reporting requirements. Federal regulators are rethinking the Commodity Futures Modernization Act of 2000 (see 4.).

Mercury is not the only planetary energy moving in a different direction. Saturn’s energies became more pronounced on Wednesday as it prepared to turn direct May 16. (Saturn turned retrograde December 31.) Mercury rules Gemini and Virgo, and Saturn in Virgo combined with Mercury retrograde reflected the market’s disappointment that April retail sales came in lower than expected. “Consumer Caution Erodes Retail Sales” (WSJ) perfectly describes Saturn’s cautious and pessimistic energy combined with frugal Virgo. Virgo rules jobs and the essentials for daily living. As long as employment (Virgo) is contracting (Saturn), people will place a greater priority on saving and debt reduction (Pluto in Capricorn).

Saturn rules government, and Virgo rules health matters. As more people lose, cannot obtain, or cannot afford health insurance, it has become necessary for the government to insure that all Americans have access to health insurance that is affordable.

Saturn rules time, and after several decades of Congressional debates over the issue that resulted in coverage for senior citizens (Medicare) and the poor (Medicaid), leading Congressional Democrats began working on the issue shortly after Election Day. President Obama’s remark Wednesday that “the stars are aligned” for healthcare reform this year was a reminder this long neglected issue has reached a crisis point that severely limits the nation’s economic recovery. Alan Abelson’s latest column in Barron’s cites an ISI Group policy report that the reform plan underway in Congress could mean “a tremendous loss of market share” for managed care companies.

Summary Of This Week’s Influences:
The Sun conjoining Mercury in Taurus on Monday indicates that Mercury has reached the midpoint of its retrograde cycle. Mercury retrograde is a good time to review finances and apparently The New York Times agrees, as today’s magazine is called "the money issue." Mercury is getting ready to challenge Jupiter and Neptune on Wednesday, and Monday and Tuesday the Moon (sentiment) will be in Pisces, a sign that was ruled by Jupiter before Neptune was discovered. Creative juices can flow by taking time out for quiet reflection.

The Moon will be in fast acting Aries Wednesday and Thursday as Mercury challenges Jupiter and Neptune. (Mercury last hooked up with Jupiter on April 22 and Neptune April 25, and will again June 9-10.) News outlets will be in overdrive as Jupiter expands and exaggerates, and Neptune can create deceit and rumors, contagious euphoria or panic. The Sun entering Mercury-ruled Gemini early this evening until June 21 only adds to the mental overstimulation. Too much multitasking can lead to communication snafus and errors.

Volatility is likely to increase this week. The most volatile market moves could occur on Monday and Wednesday. Mix Mercury’s vacillation with cautious and fearful Saturn, which can be exaggerated or ignored by Jupiter in favor of overzealous optimism. Foggy Neptune creates more confusion, making it difficult for the market to find its footing.

Monday, May 18, 2009
Negative trend bias.

Tuesday, May 19, 2009
Negative trend bias; improving conditions in early afternoon.

Wednesday, May 20, 2009
Conflicting information and rumors is likely to create sharp and swift moves that can be in either or both directions, but more biased to the downside.

Thursday, May 21, 2009
Choppy/mixed to positive trend bias.

Friday, May 22, 2009
Positive trend bias.

*I italicized the words in the two WSJ quotes for emphasis.

No disclosures.

Big Pharma’s Illusion of ‘Innovation’

2009-05-14T20:48:00.003-04:00

Published by WallStreetWeather.net

Eli Lilly (LLY) Chairman and CEO John Lechleiter’s op-ed piece on “Health-Care Reform and the ‘Innovation Test’” in today’s Wall Street Journal is yet another anti-consumer big pharma industry rant. Mr. Lechleiter does not want Americans to have the ability to choose between a public or private option for health insurance. And he’s against the government conducting cost benefit comparisons of medications and medical treatments so consumers can save money by using the most effective treatment at the lowest price.

Lechleiter reiterates big pharma’s party line, threatening that any tampering by government to bring down the costs of pharmaceutical drugs in America means “innovation may be written out of the script.” “U.S.-based private industry is the heart and soul of this innovation drama, investing $58 billion in research and development for new medicines in 2007 alone.”

Yet turning to the front page of today’s Journal (“A Celebrity Backing Turns Sour for Drug Firm”) describes a different “innovation drama” taking place at big pharma. And the only thing being pushed out of this “innovation script” is the $60 billion per year drug companies spend marketing their products. This is twice the amount big pharma spends on research and development, according to a study published by the Public Library of Science.

Bristol-Myers Squibb’s (BMY) innovation script for its “disease awareness” efforts marketing campaign is straight out of a Hollywood casting call. People who recovered from illness audition for a part in the campaign. If they pass the audition, they receive a callback where they’re given a script based on their talk during the audition. If selected, they’re paid to appear in TV commercials and give speeches at internal marketing events.

In early 2004, Bristol-Myers was seeking FDA approval to expand the use of its schizophrenia drug Abilify to treat bipolar disorder. According to the National Institutes of Health, bipolar disorder affects 5.7 million Americans. It is characterized by “mood episodes” that go from a depressive episode to a euphoric high called a "mania." Sometimes a person can exhibit a combination of both (a “mixed state”). Over half of all cases of bipolar disorder start before age 25.

A Bristol-Myers employee contacted Andy Behrman about promoting Abilify for bipolar after reading Behrman’s book, “Electroboy: A Memoir of Mania” chronicling his mood episodes and describing his drug use and electroshock therapy, his time as a stripper, and running an art forgery ring (which landed him in jail for five months).

Between February 2004 and December 2005, Bristol-Myers paid Behrman a total of $400,000 to appear in a promotional video and give speeches to Bristol-Myers sales reps at marketing events about his experiences using Abilify. In the video Behrman says: “Since I switched to Abilify, almost all the side effects have gone away. In fact, all of them have gone away.”

Behrman had been taking Abilify just four days before the video was shot, and within weeks of taking the drug he told the Journal he “developed stiffness and agitation in his legs” and that Abilify “clouded his thinking.”

Behrman was not contractually obligated to take Abilify, and stopped taking the drug in early 2005. He claims he privately complained to Bristol-Myers about its side effects. Bristol-Myers acknowledged to the Journal that “the appearance and onset of side effects depends on a number of variables,” but claims it has no record of Behrman’s complaint.

Behrman continued to speak at Bristol-Myers internal marketing events, where he praised Abilify as the only medication he took that didn’t have side effects. To prepare for these events, Behrman was regularly coached by a communications consultant and a PR firm employed by Bristol-Myers. Behrman said he was instructed to:

Reiterate the drug has no side effects.
Say that Abilify had “saved” him
Avoid mentioning (but if pressed respond truthfully) that he was being paid by Bristol-Myers

Bristol-Myers even hired Andy Behrman’s psychiatrist, Mark Frye as a consultant, funding physician education videos featuring the two men.

The collaboration between Behrman and Bristol-Myers ended when Bristol-Myers offered to renew his contract for $150,000 a year for three years, but Behrman rejected the offer. (Behrman disputes Bristol-Myers’ assertion he asked for $7.5 million.)

Perhaps Behrman should have taken a cue from the Hollywood playbook he attempted to emulate and have asked for a low salary and a share of Abilify’s profits. (Abilify’s sales were $2.8 billion in 2008, making it Bristol-Myers’ second biggest selling drug.) Since his confidentiality agreement expired at the end of 2008, Behrman has been unsuccessful in acquiring a new speaking gig with another drug company.

From Abilify to stunt doubles to ghostwriters. These are just a few examples of lies and deceit hiding behind big pharma’s illusion of innovation.

No disclosures.

President Obama Declares “The Stars Are Aligned” For Healthcare Reform This Year

2009-05-13T22:24:00.008-04:00

Published by WallStreetWeather.net

President Obama said today it is imperative that Congress pass healthcare reform. The President remarked: “We've got to get it done this year -- both in the House and in the Senate. And we don't have any excuses; the stars are aligned.”

The stars are indeed aligned this year for Congress and President Obama to ensure that health insurance is available and affordable for all Americans.

The President made his remarks in front of the White House at 10:20 AM this morning. The Moon represents the public and security issues, and is not only the ruler of the chart for Obama’s speech this morning, but falls in the area of the chart representing healthcare. The Moon and Pluto in Capricorn relate to government. They describe the government’s objective to implement major structural transformation of the nation’s healthcare system. Jupiter conjoining Neptune in progressive Aquarius in the chart area representing insurance describes expanding (Jupiter) healthcare coverage for all (Aquarius). Neptune dissolves the boundaries of our current healthcare system of exclusion by medical underwriting to one of inclusion, as well as dissolving the barrier of unaffordable coverage. In addition, Jupiter and Neptune are conjoining the USA’s natal Moon in Aquarius, increasing the likelihood that healthcare reform will happen this year.

The Moon challenging Mars in its “home” sign Aries in the area of the chart representing the President reflects Obama’s urgency for the House to pass a bill by July 31. The Sun (representing the President) and Mercury retrograde resides in the area representing Congress. Mercury retrograde describes that members of Congress will in essence be returning to finish the work left uncompleted by their predecessors who passed legislation guaranteeing healthcare coverage for people over 65.

President Obama’s July 31 date has meaning beyond pushing Congress to get a bill passed before summer recess. On July 30, 1965 at 3:09 PM in Independence Missouri, President Johnson signed the Medicare Act at the Truman Library in honor of the former President who strived to achieve healthcare for every American. Harry Truman became the first person to receive a Medicare card.

On November 19, 1945, President Truman proposed “a comprehensive health program” for all Americans as part of his Economic Bill of Rights. Truman told Congress:

“Our new Economic Bill of Rights should mean health security for all, regardless of residence, station, or race--everywhere in the United States.We should resolve now that the health of this Nation is a national concern; that financial barriers in the way of attaining health shall be removed; that the health of all its citizens deserves the help of all the Nation.”

But Republicans and the American Medical Association had a different view, alluding that “socialized medicine” was essentially a cover for communism. (This was during the McCarthy era).

There are a few key parallels between Harry Truman and Barack Obama. Although in different signs, both Truman and Obama were born with an alignment between the Sun (self-identity) and idealistic and barrier dissolving Neptune. Obama’s Sun in its “home” sign Leo challenges his Neptune in Scorpio. His Sun and Mercury (communication) is located in the area of his chart that represents healthcare. Obama’s Neptune is in transformative Scorpio (the sign ruling insurance) and Scorpio is the sign ruling his area of public reputation and recognition. Transforming the nation’s healthcare system could be the biggest achievement of his presidency.

Truman’s Sun conjoined Neptune in Scorpio’s opposite sign Taurus. Taurus is ruled by Venus, and Truman’s Venus was in Cancer, and so is President Obama’s. More importantly, both men have Venus conjoining the USA’s Venus in Cancer. Venus represents the nation’s wealth and its values, and Moon-ruled Cancer represents the public. Healthcare spending currently represents 16% of the USA’s GDP. Both men have made the case that healthcare for all is an economic issue.

Obama has said that the budget deficit cannot be solved without healthcare reform. Today the President said “businesses are using money to pay their rising health care costs that could be going to innovation and growth and new hiring.” Venus conjoining Jupiter in the USA’s chart describes our nation’s bounty. In his 1945 speech, Truman remarked: “We are a rich nation and can afford many things. But ill-health which can be prevented or cured is one thing we cannot afford.” Pluto in Capricorn opposing the USA Venus this year and Jupiter in 2010 reflects that transforming healthcare is the key to rebuilding a solid economic foundation.

President Truman saw his dream (Sun/Neptune) of healthcare coverage only partially come true. As Democrats and Republicans annually debated in Congress over the issue, it was becoming more difficult for senior citizens to obtain affordable hospitalization coverage. While there was too much resistance in Congress for universal coverage, senior citizens are a formidable voting bloc. A compromise was reached, and Medicare was born in 1965.

Beginning on Election Day 2008 through mid-2010, Saturn in Virgo is opposing Uranus in Pisces. Virgo rules healthcare in general and Pisces rules hospitalization and drugs. The current healthcare delivery system (Saturn) is no longer efficient (Virgo), requiring Uranus to break through the barriers of status quo Saturn’s boundaries to manifest progressive change (Uranus) that benefits society as a whole (Pisces). The last time Saturn opposed Uranus was during 1965-1967 when the signs were reversed (Saturn in Pisces opposed Uranus in Virgo).

A planet’s energy is more pronounced when from Earth’s vantage point it appears to be stationary in the sky. Saturn in Virgo is stationary now as it shifts from being retrograde* to direct. Right now Saturn in Virgo is conjoining the Medicare Act’s Pluto, creating the government’s willingness (Saturn) to work to transform (Pluto) healthcare (Virgo).

Senate Finance Committee Chairman Max Baucus is in charge of steering healthcare reform legislation through the Senate. The legislation will likely address many of the proposals in the Senator’s White Paper. Senator Baucus’ progressed** Sun in Aquarius will conjoin President Obama’s progressed Moon at the end of July, indicating that President Obama will likely be in sync with the legislation. More importantly, Baucus and Obama’s progressed Sun and Moon exactly conjoin the USA’s natal Moon, indicating the majority of Americans will likely agree with them.

*Planets do not really move backwards, but appear to from Earth’s vantage point. Saturn turns direct May 16.

** A mathematical calculation that moves the planets forward in time as a method of prediction.

Barack Obama: August 4, 1961 7:24 PM AHST Honolulu, Hawaii
Harry S. Truman: May 8, 1884 4:00 PM CST Lamar, Missouri
Max Baucus: December 11, 1941 time unknown Helena, Montana
USA: July 4, 1776 5:10 PM Philadelphia, Pennsylvania

WallStreetWeather.net Forecast For Week Of May 11, 2009

2009-05-10T20:33:00.002-04:00

Summary Of Last Week’s Influences:
A planet appearing from Earth’s vantage point to change direction can indicate at least a temporary shift in sentiment and trend reversal. Last Thursday Mercury, the planetary energy of communication turned retrograde in its “home” sign Gemini. True to Gemini’s dualistic nature, two reversals occurred.

A big part of Thursday’s market drop resulted from low demand in the Treasury’s $14 billion auction of 30 year bonds that pushed yields higher. The 30 year bond closed Friday at 4.275% and the 10 year note closed at 3.293%. With an estimated $2 trillion of debt to be issued by the Treasury between now and September 30, the Federal Reserve is going to have a difficult time keeping the 10 year below 3% in order to keep mortgage rates low.

Thursday saw an accelerated reversal out of the technology and retail sectors and into financials and commodities. Beyond tech’s seasonality, patterns that begin when Mercury is retrograde might not last beyond May 30 when Mercury turns direct. Financial markets tend to be choppy and unsure whether to head higher or lower, so they tend to revert to one pattern for a day or two before doing something different. Or they do it all in one trading session.

Summary Of This Week’s Influences:
Most of the time I’m more preoccupied with preparing or cleaning up from dinner than paying close attention to what Jim Cramer’s talking about on Mad Money. But Cramer got my attention when he said on Friday’s show that “the market’s got another week to run and then it’s about value.” I doubt that Cramer is following planetary cycles since he’s always made it clear he’s not a chartist of any kind, be it technical or planetary. But Cramer’s remark exactly correlates to the fact that conservative, cautious, and “value” oriented Saturn in Virgo will turn direct on Saturday ("Saturn’s Day") May 16. (Saturn has been retrograde since December 31.)

Saturn is about fundamentals and boundaries and Virgo accountability. Saturn is loss and limitation and Virgo the workforce. The market shrugged off Friday’s April nonfarm payrolls that reported a loss of 539,000 jobs and 8.9% unemployment. The number would have been 611,000 if not for the government hiring census takers, a once every decade event. If you go by the U-6 which includes part time workers seeking full time employment, about 24.7 million or 15.8% of the U.S. population are currently unemployed. And I suppose it’s just pure coincidence that a top story in the business section of The New York Times is about the “the shift back to thrift” as Saturn prepares to move direct. ;-)

Combining Saturn direct with retro Mercury’s tendency to spin its wheels could make it difficult for the market to break through the next level of resistance. However, optimistic Jupiter is about to align with Neptune, the planetary energy that dissolves barriers and boundaries on May 27, which could help the bulls keep charging onward and upward.

This week Mercury will backtrack into Taurus where it last transited April 9 to 30. Mercury retrograde in Taurus and Saturn moving direct is a good time to conduct a thorough review of all financial matters. Mercury will remain in Taurus until June 13.

Jupiter aligned with Neptune creates inflation; conjoining the USA’s natal Moon it means rising food and energy costs for consumers. The producer price index on Thursday and CPI on Friday could come in higher than expected, despite the statistical engineering.

Monday, May 11, 2009
Choppy/mixed to negative as bulls encounter resistance.

Tuesday, May 12, 2009
Choppy/mixed to negative in morning, then reverses in afternoon only to decline late in session.

Wednesday, May 13, 2009
Choppy/mixed; swings from moderately lower to moderately higher. Likely turns negative going into the close.

Thursday, May 14, 2009
Market strongest around midday to early afternoon before heading lower.

Friday, May 15, 2009
(Options expiration) Positive trend bias.

Bernanke and the Fed’s Bogus Transparency

2009-05-06T21:41:00.007-04:00

Published by WallStreetWeather.net

“The Federal Reserve remains committed to transparency and openness and, in particular, to keeping the Congress and the public informed about its lending programs and balance sheet.” –Ben Bernanke’s testimony before the Joint Economic Committee

Unless subdued by more dominant planetary energies in their chart, individuals born with the Sun and other planets in Sagittarius have a tendency to be frank and transparent with their thoughts and actions. Sagittarius is ruled by Jupiter, the planetary energy ruling ethics, philosophy, and religious beliefs. Even if the individual is not too forthcoming, they’ll usually claim to be and at a minimum demand openness and ethical behavior from others.

With his Sun, Mercury, and Venus in Sagittarius, Ben Bernanke talks (Mercury) a lot about transparency at the Federal Reserve, yet Bloomberg News had to file a lawsuit against Bernanke’s Fed for details about its lending programs. Bernanke fought long and hard against revealing American International Group’s (AIG) counterparties and how much they received after the government took a 79.9% slice of the insurance giant last September.

Most recently Bernanke and the Fed cited “bank examination privilege” to avoid questioning under oath by New York AG Cuomo about statements made under deposition by Bank of America (BAC) CEO Ken Lewis who said he was told by Bernanke and then Treasury Secretary Paulson to go through with the acquisition of Merrill Lynch and not publicly disclose Merrill’s larger than expected quarterly loss before the merger took place.

Questioned about the matter at the Joint Economic Committee hearing yesterday, Bernanke responded: “I absolutely did not in any way ask Mr. Lewis to obscure any disclosures or to fail to report information that he should be reporting.” This statement is so vague it is meaningless, similar to President Clinton’s “I did not have sex with that woman, Ms. Lewinsky.” Just as it depends on what one’s definition of having sex is, Bernanke’s statement could be technically true but misleading.

No matter. It seemed at least for the moment to placate Committee members probably more focused on the stock market’s newfound euphoria as Jupiter (exaggeration, optimism) is about to conjoin Neptune (deception, illusion) May 27. Bernanke obviously anticipated he would be questioned, and it’s fairly easy to deflect scrutiny when you’re being questioned by a Congressional committee and not by a trial lawyer under oath.

With his Mercury/Venus conjunction in Sagittarius, Bernanke’s communicative style outwardly comes across in a calm and pleasant yet almost timid manner. This coupled with Bernanke’s Sun in Jupiter-ruled Sagittarius opposite natal Jupiter in Gemini describes his incessant optimism and sole focus on economic expansion and growth at the expense of price stability and savings. Bernanke’s Sun/Jupiter opposition also reflects that he can impose too great a demand upon others.

One thing Ken Lewis said in his deposition that was not made public when I wrote “Bernanke Behind Threat To Oust Lewis…” to me sounds like pure Bernanke, ever eager to do what he thinks will move the market. Lewis said that once Bernanke saw BofA was likely to go ahead with the acquisition, Bernanke told him:

“’We view you as strong and having acted appropriately in difficult circumstances, that we’ll make sure you continue that way.’ He even went so far as to say ‘We want to do something that when the public hears about it your stock goes up.’ That didn’t happen, but-“

“Once the public hears about it”? Market manipulation? Sounds like the Fed Chairman did not want BofA to fulfill their legal duty under SEC rules to publicly disclose a major adverse effect in Merrill’s earnings that would materially impact BofA’s earnings.

As last week’s Wall Street Journal editorial (“Busting Bank of America”) observes: “Disclosure is not a luxury to be enjoyed only when markets are rising.” And I might add that with Jupiter (ethics) conjoining Neptune (scandal) in progressive and tech savvy Aquarius, any person in authority is arrogant to believe that their actions won’t eventually catch up with them.

As the Journal editorial points out, Bernanke chairs the Financial Stability Oversight Board. Board members are federal regulators who oversee the TARP. Neither Bernanke nor Paulson felt it was necessary to inform the Board at the December 19, 2008 meeting that Ken Lewis wanted to call off the merger over Merrill’s large losses.

Transparency was a topic at the January 8, 2009 Oversight Board meeting. Bernanke and Paulson must have thought it didn’t apply to them and therefore it was not necessary to inform the Board they had committed an additional $20 billion of TARP to BofA for consummating the Merrill deal. It wasn’t until 4:35 PM on January 15, 2009 after media outlets reported the government was going to take a bigger stake in BofA that Bernanke and Paulson informed the Oversight Board.

Transiting Jupiter to an individual’s natal or progressed* Sun can be a time of good fortune and provide a big boost of self-confidence. When transiting Jupiter conjoined Bernanke’s progressed* Sun in Aquarius in March, the Fed Chairman was honored by the town of Dillon South Carolina with an Exit off I-95 named after him. At the same time, transiting Neptune was opposing Bernanke’s Pluto in Leo. Bernanke drew favorable publicity for himself when he was interviewed on “60 Minutes”, giving the public a glimpse inside the secretive central bank. This was the moment when Bernanke said “green shoots” are starting to appear in the economy.

July and August could be a challenging time for the Fed Chairman as Mars in Gemini (action through legislation) and Saturn (governmental authorities) in Virgo transit Bernanke’s Sun (which conjoins the Fed’s Venus/money) and his natal Jupiter.

Virgo is the sign of the bookkeeper, seeking a full audit of the Fed’s books, along with an accounting of Bernanke and the Fed’s actions taken during the financial crisis. Today the Senate approved an amendment partially reversing a 30 year ban barring the GAO from auditing the Fed. The Senate’s amendment would allow the GAO to only audit the actions the Fed took using its emergency powers relating to a specific company or partnership, such as Bear Stearns and AIG.

In the House, Rep. Ron Paul recently introduced HR1207 The Federal Reserve Transparency Act, that would allow the GAO to conduct a full audit of the Fed. As of this writing the bill has 124 co-sponsors. In the bill, Rep. Paul accurately describes the Fed’s natal Sun/Pluto opposition when he states: “Since its inception, the Federal Reserve has always operated in the shadows, without sufficient scrutiny or oversight of its operations.”

Retrograde Jupiter and Neptune will oppose Bernanke’s natal Pluto which could involve the Chairman in legal issues (Jupiter) that expose information Bernanke might have deceitfully (Neptune) kept under wraps (Pluto).

Neptune represents scandals, and the July 21 Solar Eclipse will conjoin the Federal Reserve’s Neptune in Cancer. Around the same time Pluto retrograde in Capricorn will conjoin the Fed’s natal Sun and oppose natal Pluto, indicating that Bernanke is at the center of the scrutiny.

Beyond this short term timeframe, the Federal Reserve faces even bigger challenges ahead in late July/August 2010 when Mars, Jupiter, Saturn, Uranus, and Pluto impact the Fed’s Sun, Pluto and Midheaven,** radically transforming the structure and identity of the nation’s central bank.

*A mathematical calculation that moves the planets forward in time as a method of prediction.

**In a chart the Midheaven describes a person/entity’s public reputation.

Ben Shalom Bernanke: December 13, 1953 time unknown Augusta, GA
Federal Reserve Act Signed By President Wilson: December 23, 1913 6:02 PM EST Washington, DC

No disclosures.

WallStreetWeather.net Forecast For Week Of May 4, 2009

2009-05-04T08:32:00.005-04:00

Summary Of This Week’s Influences:*
Mercury, the planetary energy of communication turns retrograde Thursday until May 30. Information is not as clear and complete as it should be during the three weeks when Mercury is retrograde. Financial markets tend to get choppy and lack direction. Mercury retrograde means it’s time to put the re prefix in front of everything you do (reconfirm, review, repair, reinvent, reconnect, etc). Be sure to backup files and print a copy of your most important documents as computer systems and other electronic devices can be more prone to breakdowns at this time.

The USA was born when Mercury was retrograde which could explain the government’s propensity for making major economic policy decisions during Mercury retrograde periods. The TARP bill passed Congress during Mercury retrograde, and now the results of the stress tests performed on the nation’s 19 largest banks is scheduled to be released after the close on Thursday. Strong interactions during this retrograde period between Mercury and Neptune increase the probability that the results of the stress tests will create more confusion and difficulty discerning the true health of these banks. New policies and actions begun now will likely be revised after May 30 when Mercury begins moving forward again.

Analysts on average expect Friday’s employment report to show a loss of 630,000 jobs in April, less than the 663,000 jobs lost in March. Despite these projections, the unemployment rate is projected to rise from 8.5% to 8.9%. With Mercury retrograde and the Moon (sentiment) in secretive Scorpio Friday you have to wonder if the government’s statistics provide an accurate picture of the situation. Mercury retrograde could bring larger than expected revisions to previous reports.

Fed Chairman Bernanke is scheduled to testify before the Joint Economic Committee Tuesday on the economic outlook. Markets reacted favorably to last Wednesday’s FOMC announcement stating that the pace of economic contraction appears to be slowing. It will be interesting to see if committee members question Bernanke about his role in pushing Bank of America (BAC) to go through with its acquisition of Merrill Lynch.

I wrote in last week’s forecast that I thought the Fed would announce an expansion of its lending programs. Although the statement did not reflect this, two days later the Fed announced starting in June its TALF program will accept CMBS and securities backed by insurance premium finance loans as eligible collateral. The Fed will also extend TALF loans from a three year maturity to five years.

Monday, May 4, 2009
Up but starts to weaken as morning progresses, turning to choppy/mixed to negative in the afternoon.

Tuesday, May 5, 2009
Negative trend bias; improving conditions in afternoon.

Wednesday, May 6, 2009
Choppy/mixed to positive in morning; weakens and turns negative in afternoon.

Thursday, May 7, 2009
Negative followed by a midday turnaround that weakens going into the close.

Friday, May 8, 2009
Negative trend bias, but shows signs of improvement around midday.

*Last week’s summary was cut this week due to time constraints. Look for the Weekly Forecast to be posted earlier than it has been over the last several weeks along with regular blog posts again.

No disclosures.

WallStreetWeather.net Forecast For Week Of April 27, 2009

2009-04-26T17:27:00.002-04:00

Summary Of Last Week’s Influences:
Planets appearing to change direction from Earth’s vantage point (retrograde) tend to correlate to changes in market sentiment, however briefly. In last week’s forecast I wrote that Venus moving forward again increased the potential that the gains in the indices and bank stocks in particular since Venus went retrograde March 6 could reverse.

Venus represents banking and finance, and last Monday’s sharp decline occurred on the first full day of trading that Venus was direct. I didn’t think the negativity would be that severe, but I should have known better that when you’re in a banking crisis, Venus changing direction is going to have an even more potent effect. With Mercury in Taurus, news related to banks drove the indices down as bank stocks tumbled on downgrades, and the market dissected Bank of America’s (BAC) quarterly earnings report with its $13.3 billion provision for credit losses. The Administration’s new proposal to convert the government’s preferred shares in TARPed financial institutions to common equity didn’t help matters. Warren Buffett called this (TCE) manipulation illusionary, citing that there’s no difference in a bank’s capital between common stock equity and preferred stock equity. Both forms of capital are a first line against losses. Even three merger announcements couldn’t keep the market from sinking.

The markets turned positive the following day after Treasury Secretary Geithner said at a hearing that the “vast majority” of the nation’s banks are well capitalized. Geithner said all the government’s different rescue efforts are showing “mixed signs” of success. Beyond the financial sector, corporate earnings have not been good, but the market has continued to climb as earnings have not been as bleak as expected. Microsoft (MSFT) reported the first year over year revenue decline in its history as a public company, yet the stock gained almost $2.00 Friday. Jupiter about to conjoin Neptune in futuristic Aquarius on May 27 explains the market’s optimistic hope for an economic recovery to occur later this year led by technology related shares.

The DJIA and the S&P500 ended the week slightly lower, but the Nasdaq concluded its seventh straight week of gains. Jupiter and Neptune in Aquarius this year is pumping up the Nasdaq, and “rekindling” the shares of some of the late 1990s internet/tech bubble darlings such as Amazon.com (AMZN) which recently had a Jupiter return.*

Venus rules copper which had risen just before and during Venus retrograde (March 6 – April 17). Last week copper fell on profit taking after its rapid run. However, Venus moving forward again reversed the decline in crude oil and boosted gold prices last week. Crude oil is ruled by Neptune. Its rise last week in particular reflects the Jupiter/Neptune theme that these commodities are not rising on demand fundamentals, but rather as a hedge against inflation and any signs of weakness in the US$ from our mountain of debt (Pluto in Capricorn opposing the USA’s natal Venus).

Summary Of This Week’s Influences:
Wednesdays are ruled by Mercury, the planetary energy of communication. Many events this week will take place on Wednesday. President Obama will hold a news conference at 8:00 PM EDT. Bank of America’s annual shareholder meeting takes place Wednesday, and several pension funds have said they intend to vote against reappointing Ken Lewis as Chairman.

The FOMC will issue its announcement at 2:15PM EDT Wednesday following its two day meeting. Venus, Mars, and Pluto challenging the Federal Reserve’s Capricorn Sun and Pluto in Cancer now increases the scrutiny of the Fed and its leadership. The FOMC announcement will likely show an expansion of its lending programs with a loosening of collateral requirements, as participation in its lending programs has not been as high as the Fed would have liked.

Mercury enters its “home” sign Gemini Thursday until May 13. Complete important communications and documents before Mercury goes retrograde May 7. Mercury retrograde May 7 to 30 tends to create choppy trading conditions that take the market on a ride that can end up where it initially started.

Venus in Aries makes its final challenge to Pluto in Capricorn on May 2. While the previous alignments (February 5 and April 3) were positive for the market, the final alignment has the most influence. These energies increase the probability of more bankruptcies and more government involvement in financial institutions in particular. Regardless of what’s being talked about now for Chrysler and General Motors (GM), the Summer Solstice chart (June 21 at 1:46 AM EDT) for the US looks like there are two major bankruptcy filings and Michigan is a hot spot. Unemployment appears to continue to rise over the summer.

Monday, April 27, 2009
Expect a large move with a potential for reversal.

Tuesday, April 28, 2009
Negative early but starts to show improvement by early afternoon.

Wednesday, April 29, 2009
Choppy to negative trend bias.

Thursday, April 30, 2009
Choppy/mixed to positive trend prevails most of the day, but begins to weaken approaching the final hour.

Friday, May 1, 2009
Negative trend bias.

*Jupiter returned to its natal position when AMZN went public (May 15, 1997). This occurs about every 12 years. Jupiter is usually considered a beneficial influence, but the energy of expansion and optimism can just as easily turn into exaggerated panic and hysteria.

No disclosures.

Bernanke Behind Threat To Oust Lewis & BofA Board If Merrill Deal Didn’t Happen

2009-04-23T23:49:00.003-04:00

Who forced Bank of America (BAC) to complete the merger with Merrill Lynch when Merrill’s fourth quarter earnings looked like a disaster? All fingers point to Federal Reserve Chairman Ben Bernanke.

New York Attorney General Cuomo deposed chief executive Ken Lewis and former Treasury Secretary Hank Paulson as part of an investigation into bonuses paid by Merrill shortly before its merger with BofA. Lewis admitted that Paulson and Bernanke threatened to oust him and Bank of America’s senior management along with its Board of Directors if BofA invoked a MAC (material adverse change) to back out of its deal to acquire Merrill. “Secretary Paulson has informed us that he made the threat at the request of Chairman Bernanke,” Cuomo wrote in a letter to Sen. Dodd, Rep. Frank, SEC Chairman Schapiro, and TARP Oversight Chair Warren that summarized his investigation into the secrets kept from shareholders and taxpayers about the deal.

Federal Reserve Chairman Ben Bernanke likes to tout his efforts to bring greater transparency to the Federal Reserve. But actions speak louder than words. From the collapse of Bear Stearns and Lehman Brothers to using AIG as a conduit, Bernanke’s Fed has been anything but forthcoming in their actions. Cuomo writes: “We do not yet have a complete picture of the Federal Reserve's role in these matters because the Federal Reserve has invoked the bank examination privilege.” Essentially the Fed is claiming that information related to this matter is “sensitive” and was provided to the Fed confidentially. This is how Bernanke defines “transparency.”

In “Government Forced Bank of America To Marry Merrill Lynch,” I described how Bernanke and Paulson pressured Lewis not to back out of the deal, offering BofA a Citi-style rescue after the deal was completed. However, in questioning by the AG’s office, Lewis recounts that it wasn’t until a December 21 phone conversation that Paulson threatened the removal of Lewis, the management and the bank’s Board if they called off the deal. After Lewis told Paulson he would talk to the Board about it, Paulson said “Good; I’ll call Ben and tell him that.”

Now the focus turned to additional government assistance to help BofA absorb Merrill’s losses. BofA’s Board wanted the government’s commitment to the merger in writing, so Lewis called Bernanke and asked him if he would comply. To which Bernanke replied, “Let me think about it.” Bernanke never called back. Instead Paulson called to say that “this would be a disclosable event and we do not want a disclosable event.” Lewis reiterates that “I was instructed that we do not want public disclosure,” but didn’t recall if the “we” referred to Bernanke or Paulson.

Lewis said that no one considered that part of the oral agreement was a commitment for financing which would therefore require disclosure to the SEC. He said it was either Bernanke or Paulson who told him the deal needed to close on time under its original terms. Bernanke and Paulson’s intensity about consummating the merger shows they knew they had made a colossal mistake by allowing Lehman to collapse and did not want a repeat.

The minutes of the December 30 BoA Board meeting describe that Bernanke instructed BoA management to communicate with Kevin Warsh. However, Lewis tells the Board that Bernanke “had assured him the Corporation would not be penalized by accepting the commitment of the federal regulators and that acceptance of the commitment would be beneficial to the Corporation and its shareholders.” Two days before the January 1 merger, Lewis told the Board that the details of the government’s commitment had not been finalized.

Were BofA shareholders sacrificed for the good of the financial system as a whole? Was it proper and legal for BofA to fail to disclose to the shareholders and not invoke the MAC clause when BofA clearly knew it was not in their best interest to consummate the deal? Is Bernanke guilty of conspiring to force Ken Lewis in breaking securities regulations related to disclosures?

Bernanke can attempt to stimulate the economy through negative interest rates and all kinds of liquidity enhancement programs, but none of this will replace the confidence lost by Bernanke's Fed sacrificing the trust of shareholders.

No disclosure.