Weekly Column: Is there any hope from our understanding of the cosmos?

Review and preview 

Markets expected the Fed to raise its interest rate target by .75%, but not that officials would also project rates would reach 4.6% in a year’s time, up sharply from the peak 3.8% rate projected in June. Mr. Powell didn’t sugar coat things. Inflation has to come down, he said, and that requires a softer labor market. “I wish there was a painless way to do that. There isn’t,” he told reporters. Greg Ip, “Markets Now Brace for a Hard Landing,” Wall Street Journal, September 23, 2022.

Stocks tumbled Friday to cap a brutal week for financial markets, as surging interest rates and foreign currency turmoil heightened fears of a global recession. “The market has been transitioning clearly and quickly from worries over inflation to concerns over the aggressive Federal Reserve campaign,” said Quincy Krosby of LPL Financial. “You see bond yields rising to levels we haven’t seen in years — it’s changing the mindset to how does the Fed get to price stability without something breaking. This is a global macro mess that the market is trying to sort out,” – Samantha Subin, “Dow Drops Nearly 500 Points to Close at New Low for 2022 on Rising Recession Fears,”www.cnbc.com, September 23, 2022.

And with that surprising and unexpected Fed commentary quoted above, the panic of a powerfully aspected Uranus during Mercury retrograde is well underway. It just so happens to be right in the middle of the time band when Jupiter (exaggeration, hysteria) is making its double semi-square from the midpoint of the fourth and final waning square between Saturn and Uranus as outlined over the past several weeks in this column. The cosmic tsunami/hurricane forecasted for financial markets during this period has lived up to its hype as several global stock indices broke below their June lows.

In Asia and the Pacific Rim, the Hang Seng fell to its lowest level in over 10 years. None of the other markets made new yearly lows, which is encouraging, but they did make new multi-week lows.

In Europe, the German DAX and Zurich SMI indices broke to their lowest levels since November 2020. However, the Netherlands AEX held above its June 23 low and the FTSE above its lows of March.

In the Americas, it was a strange week. Brazil’s Bovespa rallied to its highest level since April 20, and the DJIA fell to its lowest level since November 2020. But both the S&P and NASDAQ remain slightly above their lows of June. Thus, we wait until next week to see if those divergences hold, which would fit the character of Mercury retrograde, the Trickster, who likes to break support or resistance and then quickly reverse in a fake out. Or will they all fall lower and off the cliff, which would fit the breakout theme of Uranus when highlighted in such a powerful aspect formation as exists today?

Dramatic market activity was also present in other financial markets. The Ten-Year U.S. Treasuries broke to a new 13-year low. The Euro fell to its lowest level in 20 years as the U.S. Dollar soared to its highest mark since May 2002. Gold fell to 1636 (October contract), its lowest mark since April 2020. And Crude Oil broke below $80, its lowest level since January 10. These are not minor market moves. These are Uranus-like major disruptions, compounded by the presence of the overdone nature of Jupiter.

Short-term geocosmics and longer-term thoughts 

There are indignities not even the much battered Japanese Yen can bear and falling below 145 to the dollar turns out to be one of them. Tokyo intervened in the foreign exchange market Thursday for the first time in 24 years to try to manage the fallout from Western central banks’ go-it-alone tightening strategies. – “The Fed, the Dollar, the Yen, and You,” Opinion Page, Wall Street Journal, September 23, 2022.

While the pace of rate increases has been fast in recent months, the story of last year is how long it took the Fed to act. The median Fed projection for its target rate for 2022 has climbed from 0.9% last December to 1.,9% in March, 3.4% in June and now 4.4%. That march upwards reflects the Fed’s historic misjudgment in how high inflation would increase and how persistent it would turn out to be. One cost of delay will be slower economic growth. – “The Fed’s March Upward,” Opinion Page, Wall Street Journal, September 22, 2022.

The average burden per U.S. taxpayer for the new federal student debt cancellation will be $2,503.22, according to new estimates from the National Taxpayers Union, a fiscally conservative advocacy group. – Lorie Konish “Student Loan Forgiveness Could Result in a $2500 Burden per Taxpayer,” www.cnbc.com, Sep 2, 2022.

The idea of a soft landing appears to have ended with a loud and deafening thud. With Uranus, major support zones broke. With Jupiter, the amplitude of the sell-off exceeded ordinary corrections and now we have to deal with global hysteria and panic, the downside of Jupiter, who normally relishes hope and optimism. With Saturn, fear now dominates greed. With all three planets combined, we have panic, hysteria, and the collective sense that a crash is unfolding right before our eyes.

There is going to be plenty of blame thrown around. It is this author’s opinion that it started with the supply chain disruptions initiated by former President Trump’s tariff wars in 2019-2020. As stated in this column at the time, the last major tariff war was the Smoot-Hawley Tariff Act of June 1930, which contributed to Great Depression as it signaled U.S. isolationism. It is happening again. True, there was no inflation at the time Trump started these tariff wars until he reluctantly left office, but that is when the supply chains began to break down, which became a major contributor to the inflation problems of today. It’s a lagging indicator.

But currently there is President Biden’s spending spree and the shutting down of energy pipelines (supplies) which started soon after he took office and continues today. His economic policies for increasing (consumer) demand by enacting some of the largest spending programs in U.S. history was exactly the opposite economic policy needed to bring prices down. This is not an act of inflation reduction. This was a time that called for increasing supplies to bring prices down, not increasing debt and spending and shutting down sources of supplies that could contain inflation (energy prices).

And then there is the Fed’s own curious and historic misjudgment of inflation that was soon to spiral out of control as its ZIRP (zero interest rate) and QE (quantitative easing) policies were kept in effect far too long, as indicated by the WSJ quote above. The overly stimulative fiscal and monetary policies of 2021 contributed mightily to the end of the bull market and economic growth that we struggle with today. This could cause another major economic depression, and I am quite certain this is not the legacy Chairman Powell wants to leave for his term. I am still curious to see whether he will pivot soon, despite his hawkish proclamations. He is, after all, a lawyer, not an economist. His economic projections have not been correct. But his arguments have seemed convincing – until now.

Is there any hope from our understanding of the cosmos? Actually, there is. This is the middle of the cosmic storm. Saturn will slowly begin to leave its 45-year waning square to Uranus next week. Jupiter will continue making another passage of its semi-squares to Saturn and Uranus until December 24, 2022, and March 21, 2023, respectively, after which time Jupiter will move towards its sextile to Saturn on June 19, 2023. It is during this period that the cosmos suggests (to me) that inflation will start to come down and the “blame game,” along with extremist activities and beliefs, will start to give way to moderate efforts to rebuild and work together to repair the broken social and economic structures. It could also indicate another rising stock market as we will head towards years 5-7 of the Jupiter/Saturn waxing cycle that started with their conjunction December 20, 2020. Typically, stock markets peak then. But that is followed by another collapse, which we will cover in this year’s Forecast 2023 Book.

For the next week, we find the powerful geocosmic aspects still unfolding. The Sun is in between its oppositions to both Neptune and Jupiter (September 16-26). Venus is also in opposition to both Neptune (September 24) and Jupiter (October 1). And Jupiter completes its second semi-square to Uranus on September 28. With so much activity involving Jupiter and Neptune, we may see a reversal in Crude Oil. We may also see an escalation in the collective sense of hysteria and panic, for any time Jupiter and Neptune are highlighted, there is usually irrational exuberance or a sense of panic as things seem to fall out of control. But as the new Moon also begins this week (September 25) and these hard aspects begin to separate, the height of this hysteria may also wane from its peak.

As stated in our recent Twitter feeds, “If you can’t stand the wind, go inside and close the door until the storm passes.” It will soon be time to return to the world of financial markets as they calm down and start behaving in more normal patterns. Of course, the more “normal” pattern may be that of a bear rather than a bull, but one can do well then, too if the bear is understood, respected, and not agitated by the Trickster and Uranus stepping uninvited into its lair.