The Facebook IPO Fiasco

The long-awaited and much-hyped Facebook IPO has turned into something of a fiasco.  Revelations have emerged about possible insider malfeasance from the share underwriter Morgan Stanley and their last-minute revisions to the financial outlook of Facebook which left some main street investors out of luck and holding some very expensive shares.  Lawsuits have been filed so the matter will be taken up by the courts although the market is rendering some early judgment as the stock price has fallen from its initial $38 to under $30. 

My original assessment of Facebook was based on the horoscope of the IPO and so far that has been wide of the mark.  One of the difficulties in analyzing first trade charts is that there is very little information to work with in the initial stages.  It's a bit like trying to make predictions for a new-born baby in the first days and weeks of life.  Transits may be a part of the overall equation, but the natal chart is still very strong and therefore its aspects and placements may be disproportionately resonating through the first phase of life. This may also be the case with the Facebook IPO horoscope.  It seems as if some of those difficult natal patterns -- especially the very close Venus-Saturn aspect --  are damaging the share price in these initial stages regardless of some favourable Jupiter transits that may be in play.

While useful, the IPO horoscope would not necessarily show the emerging controversy surrounding Facebook and insider trading.  For that, it may be useful to examine an older and more established horoscope for Facebook, namely the incorporation chart of 29 July 2004.  Although we don't know the exact time that Facebook was incorporated, this chart nonetheless reveals some interesting  perspectives on the public offering of 18 May.   Amazingly, we see Venus and Saturn front and center once again.  Natal Venus (28 Taurus ) was in a close aspect to transiting Saturn at the time of the IPO.  As I have noted previously, the Venus-Saturn combination is a perfect illustration of the desire to harness or adapt (Saturn) friendship (Venus) for instrumental or financial ends.  A Venus-Saturn combination is therefore a nice planetary picture for an IPO of a company that is "selling" its users' friendships to advertisers.

We can see that transiting Venus was also just a stone's throw away in the first degree of Gemini so it had the effect of highlighting the natal Venus placement.  Although the fifth house aspect is not a full strength one according to Vedic aspecting rules, the degreewise aspect is so tight, that even a partial strength trine aspect is going to have some negative effects.  The bad news is that Saturn is moving slowly here ahead of its direct station on 25 June.  It will station in an exact trine aspect to Venus.  Saturn's direct station at 28 Virgo will also be in tight minor aspect to Mars (28 Cancer) so this is another reason for Facebook's troubles at this time.  A little bit of Saturn can be a good thing, but this extended transit around its station produces too much Saturnian energy and is not favourable.   And if we take the Sagittarius Moon as the 1st house (Chandra Lagna), then we can see that Saturn will be stationing in the 10th house in Virgo.  The 10th house represents public acclaim and achievement, so the Saturn influence here is suggestive of public difficulty and damage to its status.

We can also see that Facebook would likely be in the news now due to the simultaneous transits to the Sun by Pluto and Uranus.  The Sun represents public projection and leadership and when it is activated by transits from such distant, slow moving planets, the chances of some kind of higher profile is likely.  Facebook has definitely been all over the news in the past month, both in the run-up to the IPO and then the scandal ridden aftermath. 

One key reason why the IPO ended in scandal and recrimination is due to the Neptune influence on this chart.  Neptune is in opposition aspect to Mercury, the planet of trading and communication.  Since Neptune symbolizes deceit and distortions when in hard aspect, this Neptune-Mercury aspect is a classic signature for an event that involves deception and confusion.  Underwriter Morgan Stanley took the unprecedented step of reducing its growth estimates to insider clients just hours before the IPO which left small investors holding the bag.   The Nasdaq also bungled the opening as it couldn't handle the trading volume but refused to admit its limitations.  The confusion was so pronounced that some traders did not know if their trades had been executed or not for almost a week after the 18 May launch.  The whole situation created an atmosphere of distrust and discord between Wall Street and the investing public.  The bad news here is that Neptune will remain opposite Mercury for the rest of 2012 and well into 2013.  This could mean that Facebook will have transparency issues around its financial dealings so the whiff of scandal may linger for some time to come.

Even with the unknown time, the incorporation chart is likely running the Venus dasha.  Using the noon default time, the Venus dasha was probably in effect at the time of incorporation and is still running now.  Venus is strong in this chart by virtue of its placement in its own sign of Taurus.  Venus is also further strengthened by the placement of Jupiter in its nakshatra of Purva Phalguni.  Clearly, Facebook has been a phenomenally successful company.  However, Pluto's close opposition to Pluto hints at the kind of scenario that erupted around the IPO.  Pluto is the planet of power and manipulation and is associated with large corporations.  Its opposition aspect can mean that the exercising of power and behind the scenes manipulation plays a stronger role in daily affairs, especially when planets are afflicted by transits.   Given Saturn extended aspect with Venus here, it is quite likely that this darker Plutonian side of the Facebook incorporation chart is playing out. 

I would therefore expect the intense financial scrutiny on Facebook to continue at least until Saturn turns direct on 25 June.  Once it begins to move away from its aspect with Venus, there may be more clarity brought to this situation.  It also suggests that Facebook's share price may stand a better chance of rebounding once Saturn moves away.  While there is only an indirect relationship between the incorporation chart and the share price, there should nonetheless be some correlation there.  It does suggest, however, that Facebook may have some tough times for the next month until Saturn goes direct.  But the  ongoing influence of Neptune into 2013 may mean that questions about transparency will act as a drag on share price for a while yet.

Europe debates as Greece hangs by a thread

One of capitalism's harsher dictums is that "losers have to lose."   The market decides which firms will be successful and which will go under based on the criteria of profitability alone.   Over time, this leads to a more efficient allocation of productive resources and increased wealth for the population as a whole.  Well, that is the theory at least.  Things get a lot more complex when nation states are involved, however.  This is the stark choice facing European leaders these days as they try to come to terms with an ongoing economic crisis that shows no signs of easing.  Greece has been a perennial "loser" in this respect but the EU has sought various ways to deny or postpone its exit from the Eurozone.  Germany's Angela Merkel has been a stalwart defender of fiscal responsibility and austerity as the best recipe for recovery.  She would appear to subscribe to the losers must lose approach as Greek bond holders must be forced to take losses and the Greek people must lose a portion of their national income before stability returns.  France's newly-elected Francois Hollande is more growth-oriented and seeks to add more sovereign debt in the form of stimulus measures as a way out of the crisis.  Not surprisingly, the more left-leaning Hollande is perhaps less enamoured with the necessity of losers in capitalism.

While the gravity of the crisis has made Merkel more open to the possibility of new emergency measures to prop up the banking sector, she is still resisting the introduction of Eurobonds which would damage Germany's credit rating, force up its interest rates and produce more inflation.  Such deliberately inflationary policies are a central feature in the Keynesian approach, which insist that falling economic growth requires injections of borrowed government money to kick start spending and restore flagging consumer confidence.  In measured amounts, it's quite a sensible policy.  An uncontrolled deflationary spiral where prices are falling is a worst case scenario that most economists agree should be avoided at all costs.  But how much inflation is acceptable before it starts to assume a more destructive role in the economy? And doesn't inflation maintain inefficient and wasteful producers at a time when the economy can least afford to carry them?  For now, the debate rages on between the adherents of free market austerity and debt reduction on one hand and Keynesian school of stimulus and controlled inflation on the other. 

In astrological terms, the current crisis reflects the approach of a rare 90 degree square aspect between Uranus and Pluto.  Uranus is said to represent independence, freedom and novelty, while Pluto symbolizes power, manipulation and large organizations.  As I have noted previously, the combination of these two planets suggests a disruptive period of fundamental change and re-organization is likely to occur over the next few years.  These two slow moving planets only make major aspects once every 30 years or so, and the tense square aspect last occurred in the 1930s when the world was undergoing major upheavals on a number of fronts.  The inability of elites to come to a consensus or to find a solution reflects the intractability of this aspect.  While we can expect some resolution and progress to come out of this aspect by, say, 2015, the process is likely to generate a large amount of dislocation.   Some kind of rupture with the past is also more likely under this aspect, although it usually occurs because the old approaches no longer work in the present circumstance.  This slow moving aspect is likely in focus at the moment because of Saturn's predominance in the sky.  The ringed planet of austerity and caution is approaching its direct station on June 25.  Saturn's energy is more likely to increase around that time, so it seems unlikely that any workable solution to the European economic crisis will arrive anytime soon.  In fact, things may well get worse before they get better.  That is perhaps one of Saturn's credos, since it reflects the fundamental notion of progress and learning through pain and loss.   No pain, no gain.  In that sense, Saturn's preoccupation with loss makes it just as important to understanding the workings of capitalism as Jupiter's penchant for risk, optimism and investment for the future.  Jupiter and Saturn are two sides to the same coin, just as notions of profit and loss comprise the larger whole that is necessary for a productive economy.

Stocks rebounded last week as European leaders discussed new measures that would help stabilize the fragile banking sector in the face of a possible Greek exit.  The Dow climbed 1% closing at 12,454 while the S&P 500 finished the week at 1317.  Indian stocks staged a modest recovery as the RBI intervention to support the rupee improved sentiment after hitting a record low midweek.  The Sensex edged higher by 1% closing at 16,217 while the Nifty ended the week at 4920.   The bullish outcome was largely in keeping with expectations as the early week conjunction of Mercury and Jupiter provided a lift for most asset classes. 

This week is more of a mixed bag.  There is an absence of unequivocal aspects here that make forecasting a little more random than it normally is.  Monday's Mercury-Saturn aspect looks fairly difficult so that could weigh on Asian and European markets.  Tuesday's Moon-Venus pattern offers some hope for a rebound but that seems tenuous at best.  Wednesday and Thursday may face some headwinds on the Mercury-Mars aspect.  Friday's Mercury-Venus conjunction should be bullish, although the pairing may only be close enough to influence trading in Europe and the US.

 Transits for Wednesday 30 May 2012 9.30 a.m. New York

Greece trumps Facebook; G8 meets to avert crisis

Greece is the problem that won't go away.  G-8 leaders are meeting in Camp David this weekend to attempt to find some kind lasting solution for the Eurozone and its most wastrel member.  It all seems more like theater than anything else as there remain sharp policy divisions over the right way forward.  Obama and the newly-minted French President Hollande favour more stimulus while Merkel and Cameron believe that more austerity is necessary.  No matter which side prevails, there will likely be some attempt to guarantee Greek sovereign debt perhaps through another intervention by the ECB. Recent austerity measures appear to be making the problem worse in the short run as Greece and Spain slip deeper into recession.  It is unclear if Germany can agree to more politically unpopular stimulus measures to prop up their bankrupt Greek neighbours.  More financial analysts are now openly assessing the implications of Greece leaving the Eurozone since managing a sovereign currency may be the only way that Greece can again become competitive on its own terms.

The ongoing political and economic uncertainty is a very appropriate reflection of the current predominance of Saturn.  As I have noted in past weeks, May was likely to be problematic due to the entry of Saturn into sidereal Virgo.  It has been moving very slowly in past days at a rate of just 3 arc minutes per day and finally entered Virgo on Friday.  It's worth noting that I am referring to the sidereal sign of Virgo rather than the more commonly used Western tropical sign of Virgo.  The star-based sidereal zodiac widely used in India is offset 24 degrees from the seasonally-determined tropical zodiac so this particular measurement only appears if one follows this different system.  As planets change signs, there is often stronger symbolic correlations in consciousness and behaviour on Earth according to the nature of the planet.  Saturn is the planet of caution, pessimism, and austerity so it is not surprising that we should be seeing a gloomier outlook at the present time with regards to Greece, the Eurozone and a slowdown in the world economy. 

But now that Saturn is more safely ensconced in Virgo, one would be tempted to think that calmer waters are ahead.  To be sure, the amount of negative Saturn energy is likely waning in the near term.  And yet there is more cause for concern down the road.  Saturn is slowing down here in the final stages of its retrograde cycle, which is due to conclude on 25 June when it returns to its normal forward motion.  Slow moving planets tend to increase their influence and Merkollande do not want Saturn to be too influential.  To make matters worse, Saturn will station at 28 Virgo, just two degrees from the cusp of Libra.  A placement near the cusp of a sign is more unstable and can create difficult situations.  It also means that when Saturn moves forward again, it will cross over this sign cusp and tend to depress markets all over again.  This final sign change will occur on 2 August.  The astrological elephant in the room is the upcoming Uranus-Pluto square aspect which is exact on 24 June.  This will be the first of three such exact square aspects of these two transformative planets over the next year or two.  There is an enormous amount of energy associated with this aspect, but it somewhat unclear just when its effects will manifest.  Given the near simultaneous Saturn direct station at that time, there is good reason to assume a cautious stance at this time.  While by no means probable, a black swan-type event in nonetheless more likely at that time than it otherwise would be. 

Despite all the hype around the Facebook IPO, stocks continued to struggle last week as fears of an disruptive "Grexit" from the Eurozone weighed on sentiment.  The Dow lost 4% closing at 12,369 while the S&P finished the week at 1295.  Indian markets fared somewhat better although the Sensex still tumbled 1% to 16,152 as the Nifty ended the week at 4891.  This bearish outcome was in keeping with expectations as I thought that the shadow of Saturn would darken the mood for much of the week.  Interestingly, the potential bright spots did appear to coincide with some limited gains.  The Venus retrograde station occurred on Tuesday, just as the Indian markets some modest gains.  Jupiter's entry into Taurus (the bull) on Thursday also coincided with more positive sentiment across the board as stocks in Mumbai rose and commodities such as gold and oil also put in a winning session.

This week looks somewhat more upbeat, mostly due to Tuesday's Mercury-Jupiter conjunction.  This is a fairly reliable bullish influence which would tend to suggest some early week gains, even if the conjunction comes so soon after Sunday's solar eclipse. The late week is perhaps unpredictable given Friday's Sun-Ketu conjunction. This is likely to be detrimental for gold in particular although its negative effects could spill into stocks also.  So there is some astrological justification for a bounce this week.

Saturn sells Venus: The Facebook IPO

The social media giant Facebook finally goes public tomorrow (May 18) as it launches its shares to the public for the first time.  With an opening price of $38 per share, the IPO is likely to make Facebook raise over $20 Billion and make founder Mark Zuckerberg a cool $1.15 Billion when he cashes out a portion of this shares in early trading.  Not bad for a company that started in a Harvard dorm room less than ten years ago.  With almost 1 billion "friends" worldwide, Facebook has revolutionized much of the way we interact with others and think about ourselves in a social context.  Whether or not it is merely a passing fad is harder to say, although I suspect even if it is eventually replaced by some other company (remember Friendster and Myspace?), social networking in our hyperlinked wired world has been forever changed.

From an astrological perspective, the launch of the IPO at this time is particularly telling. What planets would one expect to be prominent at a time when the world's largest social networking site goes up for sale and in splashed all over the headlines?  Well, Venus for starters.  Venus is the planet of social interaction and friendship so it should be noteworthy in some obvious way.  And not surprisingly, it is.  Venus just stationed and turned retrograde on Tuesday May 15.  Whenever a planet stations, it comes to a full stop in the sky from our perspective on Earth.  As a general rule, the slower the planet is moving, the more powerful it becomes in terms of its symbolic associations. Venus only turns retrograde once every two years or so, so this is quite a strong correlation with a prominent and powerful Venus.  

We can also see that Venus is in a very close 120 degree angle with Saturn, the planet of structure and organization.  The Venus-Saturn symbolism here is quite appropriate, and even poignant.  Facebook is an organization that profits from friendship, and this IPO launch is the corporate expression of that function.  That is quite a telling embodiment of these two planets.  Saturn contacts with Venus tend to 'button down', harness or even constrain the inherent happiness or pleasure that Venus usually manifests by itself.    Saturn channels and adapts the natural human desire for connection that is intrinsic to Venus.  Saturn's influence therefore lies in its tendency to search for practical applications that stem from friendship.  Saturn is, in effect, asking: how can be make (Venusian) friendship more constructive and useful?   In a sense, Saturn is "selling" Venus.  That most human of experiences, friendship, is commodified for personal and corporate enrichment.

Jupiter is also in the mix here as it is closely aligned with both planets.  Jupiter can symbolize optimism and expansion and is often prominent in situations that assume a large scale.  Facebook is certainly a massive social phenomenon and this IPO will likely be the biggest in history.  Uranus, the planet of independence, change and rebellion, is positioned at the top of the chart near the unequal 10th house cusp, or MC.  This is a nice reflection of Facebook's revolutionary impact on society in the wired age. Uranus is often prominent in the horoscopes of technology-related matters, especially those that are based on innovation and which depart from tradition.

In terms of its stock price, its first trade horoscope does not look promising.  The Nasdaq opens at 9.30 a.m. and given the huge number of available shares, the first trade of Facebook will occur almost immediately.  I am therefore basing this analysis on the assumption that the first trade takes place just seconds after 9.30.  Right off the bat, we can see the problem with this chart.  Saturn is sitting almost exactly on the equal 4th house cusp casting its full strength 10th house aspect to the ascendant at  29 degrees of sidereal Gemini.   Saturn is usually a malefic planet and it particularly does not do well in the 4th house representing emotional composure and popularity.  Its tight aspect to the ascendant is another restrictive element to this chart that will tend to depress enthusiasm and presumably stock price over the long run.  It may also suggest that this attempt at explicitly profiting from Facebook's popularity could reduce its appeal.  Relatively innocuous ads were one thing, but listing on a stock exchange may change the public perception of Facebook.  Already we are seeing reports in the media of how much each Facebook account is worth in terms of advertising revenue, although with the monetary value of each user's friends. As one observer has wryly noted, "If you're on Facebook, you're not the customer, you're the product."

There are some possible offsetting influences, however.  Venus is sitting exactly on the equal 12th house cusp in close aspect to the ascendant.  It is well placed in its own sign of Taurus so that may mitigate some of the more draining Saturn effect.  Even better, Jupiter is placed very close to the cusp of the 11th house of gains and income.  Since Jupiter is a benefic planet by nature, this influence should be more positive and perhaps reflects the fact that many people will regard this stock as an instrument for gaining income and profit.  The ruler of the first house is Mercury and it is also well placed in the 11th house.  This is another plus for this chart.  The Uranus placement in the 10th house may increase both the profile and the volatility of the stock.  This is likely to be widely traded and quoted, perhaps in a way that Google and Apple are.  But Uranus can also make stocks (and people) unpredictable and, at times, unstable.  I would therefore expect the price range of Facebook to be quite wide in any given year.

More immediately, I think Facebook is more likely perform poorly over the next couple of months. The problem with the chart is that Saturn is moving retrograde now and will continue to afflict the ascendant for the next while, at least until July.  This could make share price tend to fall.  Some gains are perhaps more likely leading up to Jupiter's conjunction with the Sun in early June but since Saturn isn't moving too far away from its current position, it seems fairly unlikely that Facebook will significantly rise in value in the near term.  Things may get somewhat rocky by mid-June when Mercury crosses the ascendant and thus comes under the bearish influence of Saturn.  What's worse this will occur just as Mars will also be in alignment with Saturn.  This could the time when any early enthusiasm wanes and Facebook comes back down to earth.  The late summer and early autumn may be another difficult time for Facebook stock when Saturn opposes the Moon and Ketu conjoins the Sun. 

Not surprisingly, the horoscope of Facebook's founder and CEO Mark Zuckerberg looks quite good this week.  Born May 14, 1984 (time unknown), the 28 year-old Zuckerberg has transiting Jupiter conjunct the Sun this week.  This is a nice confirmation of his increased status around this IPO and reflects his achievement after many years of effort. His natal chart suggests he is a focused and disciplined person as seen in the complex pattern of planets in cardinal signs of Libra and Aries, both of which are associated with taking initiative.  He was born on a full Moon (Moon opposite Sun) which is usually positive for social recognition but Saturn, Venus, Mars and Mercury are also in the mix there.  The high concentration of planets in these two greatly intensifies his assertiveness and creative drive.  That Saturn is front and center in this alignment is the probable source of Zuckerberg's intense ambition and personal discipline to realize his goals.  As noted above, when Saturn is associated with Venus, the person can sometimes think of social contacts in a practical or even instrumental way.  This may be somewhat more likely with the Venus-Saturn opposition as Zuckerberg has.  It is interesting that Zuckerberg's own Venus-Saturn contact is reflected in this IPO which also features a prominent Venus-Saturn aspect.  Friendship is not for it's own sake, but rather something to be harnessed for gain or profit.  In a sense, this is merely bringing to the surface what is actually a sometimes uncomfortable fact behind most human relationships.  We get together to find commonality, to make our lives more pleasant and liveable and to work together toward the goals we share.  But underneath it all, friendship does have an inarguable dimension of trade and mutual benefit as many anthropological studies remind us.  We help each other. And in so doing, we are benefiting and profiting from each other's friendship.  The difference with Facebook is that they are monetizing this notion of mutual benefit in a new and more transparent way.  Whether or not there will be a backlash against Facebook is harder to say.  Human beings are inherently social animals but the form that this sociality takes will evolve and change as society changes.  Whatever its faults, Facebook has created a brilliant business model that is rooted in something that will never run out:  the necessity of humans to share and form relationships.

Post-election uncertainty in Greece sinks stocks

Stocks got sideswiped by the Greek election last week as the absence of any clear winner again pushed the Eurozone to the brink.  The Dow lost almost 2% closing at 12,820 while the S&P 500 finished at 1353.  Indian stocks suffered deeper losses as falling industrial output in April pushed more investors to the exits.  The Sensex declined 3% closing at 16,292 while the Nifty ended the week at 4928.  This bearish outcome was not unexpected as I thought that Saturn's approaching entry into sidereal Virgo on 18 May would likely be a drag on sentiment.  The late week bounce never fully materialized although most markets did rise on Thursday's bullish Moon-Sun-Jupiter alignment. Those tepid gains disappeared in Friday's session, however.

Europe moved to back into the spotlight last week as election results in France and Greece underlined the unpopularity of austerity.  French President Sarkozy was defeated by the anti-austerity socialist Francois Hollande while the pro-austerity parties in Greece suffered a stinging defeat.  While Sarkozy's defeat was widely expected, the Greek situation was more unexpected as that country now lacks a working government.  Thus far, attempts to create a new coalition government have failed and there is now talk of fresh elections in mid-June.  A rejection of the EU austerity package could lead to a default, which would then have a knock-on effect on European and US banks.

The fact that all this turmoil is occurring now is not too surprising given the dominance of Saturn, the planet of pessimism and caution.  As I have mentioned previously, the month of May was likely to see some significant market moves because of a multi-planet alignment that centered around Saturn.  As we know, whenever Saturn is geometrically aligned with other planets, it greatly increases the probability of negative sentiment and market declines in most risk assets. At the moment, Saturn is especially strong because it is about to change signs, from sidereal Libra to Virgo.  It is worth noting that when Saturn changed signs and entered Libra back in mid-November 2011 the market also suffered a significant decline.  What is interesting here is that the sign change takes place at the same time that Saturn forms a very tight aspect with Venus, Jupiter and the Sun.  Venus stands out from this list because it is turning retrograde on Tuesday 15 May.  Although it is normally a bullish influence, its slow velocity and extended aspect with bearish Saturn appears to be intensifying pessimism.  Again, history is not without precedent.  The March 2009 low occurred right around a similar Venus-Saturn aspect and just three days after Venus turned retrograde.  Clearly, such reversals in planetary direction are important influences on the market, especially when they occur while forming a close aspect to another planet.

This week shapes up to be another potentially tumultuous one as the Venus-Saturn aspect will makes its closest approach.  Venus actually begins its retrograde cycle at 10.33 a.m. EDT on Tuesday so we could see some shift occur around that day.  The Sun joins the alignment as it enters Taurus on Monday, while Jupiter is due to enter Taurus on Thursday.  The combined effects of all these planets changing signs is unclear to me, although they would appear to amplify the available energy for the prevailing direction of the market.  As the solar system's most bullish planet, Jupiter's entry into sidereal Taurus (the bull!) is perhaps most noteworthy and suggests that there is at least some possibility for upside this week. But Saturn still looks like it should have the final say here as it does not change signs until the end of the week.  With a potentially destabilizing solar eclipse due Sunday the 20th, there is perhaps that much less reason to expect a swift or orderly rebound this week.

Transits for Tuesday 15 May 2012 10.33 a.m. EDT New York

Bad US jobs report: is the recovery running out of gas?

It was a bad week for the economy and a bad week for stocks.  The April jobs report showed that only 115,000 new jobs were created last month which was far below expectations as the recovery gave more signs of running out of gas. The unemployment rate actually fell to 8.1% but only because of all the discouraged workers who gave up looking for work were no longer included in the survey.   More questions are now being raised about the effectiveness of President Obama's policies and the Keynesian effort to stimulate the economy through deficit spending.  Free market critics insist that all that debt the US has incurred trying to kick start the economy hasn't worked as growth continues to limp along at an anemic rate of 2-3%.  They argue that the US would have been better off without any of the bailouts or QE and that the economy would have recovered by now.  Interestingly, there are no shortage of critics on other side who insist that the problem isn't too much spending but rather not enough.  Economist Paul Krugman asserts that the current recessionary phase could be ended quickly if only the government injected another several trillion dollars worth of stimulus.  Who is right?

It may well be an impossible question to answer with any certainty.  No matter how much economics attempts to mimic the practices of the physical sciences, any area of inquiry that concerns human behavior must accept the fact that much of it will simply be unknown.  It therefore demands we accept the notion of probability and relative risk and reward instead of certainty.  There are convenient facts for both sides in this debate.  The recovery has been weaker than previous recoveries so this suggests that something is wrong with the way this one has been handled.  Is it time to change the approach by cutting spending and perhaps cutting taxes?  Certainly, European-style austerity is not working either although there are specific Eurozone problems that may not be directly analogous to the US situation.  Plus, European governments are not cutting taxes so that is another divergence with the free market model.  The hard core Keynesians like Krugman and Stiglitz believe that more stimulus will boost growth.  It likely would create some growth in the short run but eventually it would also boost inflation, raise interest rates, and make foreign buyers of US treasuries like the Chinese increasingly reluctant to buy US debt. Is it a gamble worth taking?   Again, there are no easy answers here, especially since this is an election year in the US.  Fed Chair Bernanke may have to sit on the sidelines lest he be accused of political interference should be come forward with QE3.  He could still do it before November, but it would tend to be a last resort sort of move.  Obama will likely not be able to run on the promise of greater stimulus so he may have to finesse his current position.  The whole debate is a reminder of the extent to which the consequences of policy decisions are ultimately unknowable.  All claims to certainty should therefore be regarded with skepticism.

Stocks slumped last week on  disappointing US jobs report and political uncertainty in Europe in advance of key elections in France and Greece.   In New York, the Dow lost 2% closing at 13,038 while the S&P 500 finished at 1369.  Indian stocks were also weaker as the falling rupee made stocks less attractive for foreign investors.  The indices broke through some significant support levels as the Sensex declined 2% to 16,831 while the Nifty ended the week at 5086.  I thought we might have held onto the early week gains on the strength of the Venus aspect but it seems as though Saturn is moving to center stage now ahead of its entry into sidereal Virgo on 18 May. 

As I have noted, Jupiter and Saturn have been in an uneasy truce in the sky lately as stocks have traded within a fairly narrow range without clear direction since perhaps March. I suggested that bearish Saturn was likely to become stronger in May and June in part from its re-entry into Virgo in the coming days.  We may well be witnessing some early manifestation of this Saturn energy here.  However, the picture is complicated by the near-simultaneous Venus retrograde station on 15 May. Venus is normally a bullish planet but its geometric association with Saturn could nullify or even reverse its effects.  For this reason, we need to keep an open mind about the next week or two.  I would tend to think the Saturn will prevail here and the market will continue lower, but any outcome is possible. The added burden for the market is that the eclipse period begins on 20 May.  Eclipses often highlight areas of uncertainty and interrupt stable and predictable routines. 

The planets this week offer a mixed bag of influences. Monday's Moon-Rahu conjunction is likely to activate the negative Mars aspect so that may mean more selling, especially in Asian and European markets. Tuesday's Moon-Venus aspect may bring some relief but it does not seem to be overly positive.  As we move into the second half of the week, the Sun will approach its conjunction with bullish Jupiter.  This conjunction is exact next weekend, but some optimism looks likely to flow from it nonetheless.