In last week's market post, I offered a few ideas of why this latest round of QE was less likely to have the same big impact on markets as its predecessors did. I wanted to expand that idea this week by going right to the astrological source, as it were: the horoscope of QE3 itself. Ben Bernanke publicly launched QE3 in Washington at 12.30 pm on September 13. This is the chart of the "birth" of the Fed's policy to buy $40 Billion of mortgage-backed securities every month until unemployment improves. It may seem a bit of a stretch to capture the essence and future trajectory of this program simply by examining the planets at the time of its announcement. There are so many possible other astrological factors involved, as I alluded to last week. And yet if astrology works at all, the planets at the beginning or "birth" of any project should reveal of the nature of the thing. It may not say everything we need to know about QE3 but it should reflect something about its both its 1) essential character and 2) possible futures and eventual outcome.
QE3 Announcement: 13 September 2012 12.30 pm Washington, DC
A quick look at the chart shows why I bothered to risk my readers' scorn at yet another examination of this somewhat over-hyped and tired subject. At the time of its announcement, Rahu, (the North Lunar Node) was exactly rising in early Scorpio. The primary symbolism of Rahu includes 1) exaggeration and boundless acquisitiveness and 2) distortion and disruption. Well, that is about as good a description of QE3 as one can imagine. The stimulus measure aims to boost economic activity and pushing money out of otherwise safe assets like bonds and CDs into risky assets like stocks and commodities. QE3 aims to depress interest rates and thus penalizing savers with near zero percent interest rates. In other words, the road to recovery is through more borrowing, spending, and buying risky assets. (That's funny - I thought that's how we got into this mess in the first place) That is the perfect picture of Rahu's penchant for greed and unlimited ambition. Bernanke doesn't want Americans to put money in the bank or in savings bonds; he wants them to invest it in a more active way such as the stock market. What could be more Rahuvian than that?
Scorpio is ruled by Mars and Mars is placed in the 12th house of loss with Saturn. To put it politely, this is a challenging placement. Worse still, Saturn sits almost exactly on the equal 12th house cusp (4 Libra) thus intensifying the affliction to the 12th house of loss and isolation. On one hand, this placement may describe some of the fundamental nature of QE3 as a program which will by definition increase the debt load of the US government, a possible implication of the 12th house. QE3 also owes its very existence to the fact that the economy is in trouble, which is very much a 12th house matter. But these placements may also describe not just the nature of QE3, but the outcome of the thing also. In other words, the clear 12th house emphasis in this horoscope suggests that it is more likely to fail to achieve its stated intentions. The fact that there are two malefics in the 12th house suggests that efforts to stimulate growth may only end up increasing losses. But we also need to examine the rest of the chart.
To see the probable success or failure of any endeavour we also have to look at the 11th house of gains. If the 11th house and its ruler are strong, then there is a better chance that efforts will be successful. If the 11th is unremarkable, however, and there is weakness or affliction to the 1st house and the Sun and Moon, then success is less likely. Here we have Mercury in the first degree of Virgo -- a very good placement since Mercury is said to be exalted in Virgo. However, Mercury comes under the fairly close trine aspect of Ketu (South Lunar Node). Like its nodal brother Rahu, Ketu also is an unreliable planet that can introduce an element of change and disruption. In terms of ascertaining QE3's essential character, the influence of Ketu on the 11th house ruler Mercury suggests "gains through unusual means". This seems like an apt description of trying to stimulate growth by printing money. The Fed can no longer lower interest rates since they are at zero already. Quantitative easing is therefore a kind of desperate last resort to avoid a deflationary spiral and liquidity trap that ends in depression. But since Ketu is considered a malefic planet, its influence on Mercury may not be positive and therefore we can surmise that this affliction may impact the outcome of QE3 also. This is where quality can evolve into quantity and the essence contains the seed of the outcome. (hat tip to Hegel!) Given the difficult 12th house emphasis, this Ketu influence should be seen as unhelpful to the long term viability of QE3.
On the plus side, both the Sun and Moon are in the their signs and in favourable houses, the 10th and 9th respectively. At minimum, this says something about the high profile that QE3 may enjoy. The Fed's moves are increasingly dissected and discussed in mainstream media, so there is a growing familiarity with this previously arcane term from economics. While both the Sun and Moon are strong in this chart, I'm not sure that they provide enough strength to affect the future outcome.
The other way to assess possible future outcomes, of course, is to look at transit hits to this chart. At the outset, we should consider what transit hits may mean in real terms. At the most general level, one would expect transits involving benefic planets like Venus and Jupiter to bring success to QE3. Success could be measured in different ways, but one would think it includes boosting asset values (e.g. stocks) as well as boosting growth rates (GDP) and employment. Transit hits by malefic planets like Saturn may signal troubles with QE3. These would presumably involve failure to achieve its stated goals and could be associated with falling stock prices and falling or stagnant employment. At the same time, it may also mean that QE3 is coming under criticism for other reasons such as obstacles to implementation, theoretical justification or other facets that may not be directly related to economic results. In this sense, it is possible that afflictions to the QE3 horoscope may not directly correlate with more economic problems. Bottom line, I think there should be some correlation but I do acknowledge that it is conceivable that outcomes may need to be defined quite generously.
That said, the upcoming transits to this chart do not look good at all. Transiting Saturn will exactly square Venus in December. Venus represents social connections and possibly popularity in this case, so we should expect QE3 to come under greater attack under this Saturn transit. Since Venus is placed in the 9th house of higher knowledge, this Saturn affliction could correlate with a questioning of its theoretical basis and legitimacy. At the same time, transiting Ketu will exactly aspect Mercury, the lord of the all-important 11th house of gains. This definitely could mean some headwinds for QE3. A decline in economic activity or the stock market is definitely one possibility at this time. Saturn will then move past and then go retrograde in early 2013 and station very close to an exact square in July 2013. Interestingly, this will coincide with another double whammy as transiting Rahu conjoins Mars in the 12th house. This may correlate with a sudden or shocking loss (12th house). The extended Saturn transit to Venus in the 9th house may well symbolize more questions about the wisdom of the whole notion of quantitative easing and money printing.
Overall, the transits look difficult for the next year or so and would tend to argue against a quick or effective turnaround in the US economy. Bernanke has already stated that if QE3 does not produce results, he will take additional measures. In other words, QE4. Given the prolonged stress of the QE3 horoscope in mid-2013, it may be necessary for Bernanke to make another such move around that time. Perhaps he will finally get that helicopter.
Thus far, most global markets have not taken QE3 to heart. After an enthusiastic rally on QE3's inaugural day, US Stocks edged slightly lower last week as many investors are pondering the likelihood of a slowdown in China. The Dow closed at 13,579 while the S&P 500 finished the week at 1460. Indian stocks fared better, however, as the government's reform of the retail sector put investors in a buying mood on Friday. The Sensex rose 2% closing at 18,752 while the Nifty ended the week at 5691. I thought we would get more downside on the midweek Sun-Rahu-Saturn pattern, although Indian stocks did trend lower into Thursday. Friday's gain coincided closely with the Venus-Jupiter aspect.
This week looks fairly mixed. Mercury and Jupiter form a bullish looking aspect on Tuesday and Wednesday so that could push stocks higher in the early going. But the Venus-Mars aspect looks more troublesome and may produce some down movement, especially around Thursday when the aspect is closest.
Transits for Tuesday 25 September 2012 9.30 a.m. New York