Sunday, February 7, 2010

Eurozone debt fears drag down markets

Stocks retreated for the third week in a row last week as fears over European sovereign debt pushed investors out of riskier asset classes and into the safety of treasuries and the US Dollar. After Friday's afternoon rebound, the Dow was down less than 1% at 10,012 while the S&P finished at 1066. The losses were steeper in Mumbai as emerging markets bore the full brunt of the rising risk aversion. The Nifty closed down 4% to 4712 while the Sensex ended the week at 15,790. The aftermath of Wednesday's Mercury-Rahu conjunction appears to have increased volatility towards the end of the week as Jupiter's aspect to Saturn and Pluto coincided with the sell-off.

Since mid-January's Solar Eclipse, financial markets have been in correction mode as the the voices of caution have grown louder about rising debt levels from government stimulus spending. Greece and now Portugal are now under scrutiny as governments attempt to conform to the EU standard of 3% debt to GDP. The threat of default is causing a run of the Euro which has lost 10% of its value in the past two months. Stocks and commodities have also suffered as the carry trade in cheap US Dollars has perhaps begun to unwind.

From an astrological perspective, debt -- and losses in general -- is said to be ruled by Saturn. When Saturn is prominent in the sky, we are confronted with the notion of loss in some way. Certainly, Saturn has been prominent for the past year or two. In 2008, Saturn (loss) formed an opposition aspect to Uranus (shock) . That was one of the critical planetary correspondences of the economic meltdown that led to the Great Recession. Now Saturn is in a square aspect with Pluto, the planet of change and power. Since the optimism of Jupiter and Neptune has largely dissipated, the negative fallout of Saturn and Pluto may now be more dominant. Notions of Saturnian debt is now undergoing some painful Plutonic transformation through the application of power. The European Central Bank is forcing financial compliance on its lesser lights like Greece, despite growing public opposition to the austerity measures and rising taxes. Since this Saturn-Pluto square will last throughout most of 2010, this issue of government debt and loss will be a recurring theme. Will there be any actual government defaults from this crisis? Well, nothing says "Plutonic transformation" quite like erasing or re-structuring of debt so it's very possible that we could see some major defaults in the weeks and months to come. And with the prospect of a Grand Cross looming this summer, there is every reason to expect the financial crisis to deepen.

This week will see a number of close planetary angles involving Mars, Jupiter, Saturn, and Pluto. The week may begin pleasantly enough on a Venus-Neptune conjunction which might correspond with the articulation of a vision or plan for creating wealth. Actually, this aspect is exact before the open on Monday so some of the positive energy may already be done. By contrast, the end of the week may see the effects of a difficult Mercury-Mars opposition which looks quite nasty, especially since it may tap into the larger reservoir of Saturnian pessimism. A gain is possible this week, but the overall tone of the markets still looks shaky. And even if February produces some temporary gains (e.g. the Venus-Jupiter conjunction Feb 16 or the Sun-Jupiter conjunction Feb 26), the month of March offers no relief as Mars completes its retrograde cycle on March 10 while is close aspect with Saturn.

So it looks like there won't be any quick fix for global financial markets here. We may have to wait until the spring equinox before the markets are once again on solid footing.