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Week Beginning August 10, 2009

Review and Preview

Raymond Merriman Please note that there will be no column August 21, due to duties at the ISAR conference in Chicago.

We finally have good news. It looks like the U.S. economy is turning around. The stock markets of the world raced to new highs for the year and the downward spiral in new jobs in the USA showed its smallest decline in a year on Friday. Only 247,000 jobs were lost last month (July) and strangely, the unemployment fell from 9.5% in June to 9.4% in July. I am not sure how that happens when the economy losses 247,000 jobs. But hey… it is good news and the future looks brighter as we have now passed the middle degrees of Saturn in Virgo (high unemployment, as Virgo rules work, Saturn rules loss).

However, even though all indices made new yearly highs last week, some made it earlier in the week as the full moon conjunct Jupiter occurred, and others, made it on Friday. Even in the USA, the NASDAQ Composite did not make a new high on Friday, whereas the DJIA and S&P did. Will this become a case of intermarket bearish divergence, leading to a big sell-off?

Short-Term Geocosmics

Prepare yourself. We are about to enter one of the most potentially explosive geocosmic time bands of the year. Starting this Monday, August 10, and lasting through August 26, there will be nine important geocosmic signatures occurring, with no more than 4 calendar days separating any two consecutive ones. This is known as a “geocosmic cluster.” But this one is not just any geocosmic cluster. This one contains three powerful Level One geocosmic signatures. As reported in “The Ultimate Book on Stock Market Timing, Vol. 3: Geocosmic Correlations to Trading Cycles,” Level One signatures have the highest historical correlation to primary cycles from which the longest and most severe reversals tend to follow. But it goes even beyond that, because these Level One signatures involve the explosive planets Mars, Jupiter and Uranus.

You may remember from previous columns that any time there is a cluster of signatures involving these three planets in any combination, the possibility of very large price swings is great. On Friday, August 17, the very important Sun-Jupiter opposition takes place. Historically this aspect has a 75% correlation to primary or greater cycles within ten trading days. And 50% of the time, it is a 50-week or greater cycle. We are in that time band now, and the market is making a new high for the 50-week cycle. On Monday, August 17, the Sun will then be in opposition to Neptune, another Level One signature with a 74% correlation to primary or greater cycles within 13 trading days. The passage of the Sun in opposition to both Jupiter and Neptune is known as a “translation” to the Jupiter-Neptune conjunction. Then, on Tuesday, August 18, the Sun will form a waxing square to Uranus. This powerful signature has a 76% correlation to primary or greater cycles within 9 trading days. It will also mark the end of the Sun’s “translation” to the Saturn-Uranus opposition, which began Monday, August 10. But note that Mars, Jupiter, and Uranus are present during this cluster, especially August 14-18. This could get interesting.

The significance of these signatures is apt to show up in mundane matters too. Although we never know what types of events to expect from Uranus (it rules surprises), we do know that earthquakes, tornadoes, hurricanes, high winds and storms, as well as terrorist strikes, airplane disasters, and electrical outages have happened before under similar configurations. This is not a time to take risks by placing oneself in dangerous situations. This is a very explosive time, when one is advised to error on the side of caution. On the positive side, it is also a time of great innovative ideas designed to benefit the masses. However, the attempts to launch these ideas tend to be pre-mature. It may be the right idea, but the wrong time.

Longer-Term Thoughts

Last week started out with this quote from Washington: “President Barack Obama’s treasury secretary said Sunday he cannot rule out higher taxes to help tame an exploding budget deficit, and his chief economic adviser would not dismiss raising them on middle-class Americans as part of a health care overhaul.” The White House almost immediately dismissed the idea, as it would surely be a déjà vu of first President Bush’s broken campaign promise, in which he infamously proclaimed “Read my lips. No new taxes.” And then two years later, he raised taxes. Two years after that, he was defeated in his bid for re-election. As the article continues, “During his presidential campaign, Obama repeatedly vowed ‘you will not see any of your taxes increase one single dime.’ But the simple reality remains that his ambitious overhaul of how Americans receive health care — promised without increasing the federal deficit — must be paid for.”

So, within our understanding of Financial Astrology, how can this two-headed monster of debt and overspending get resolved, so that America can have a universal health insurance policy without going bankrupt? The White House economic advisers believe it can only be done by raising taxes, especially on small businesses, large employers, and wealthy people. But according to economist Arthur Laffer in Wednesday’s Wall Street Journal, “That won’t work because the health care recipients will lose their jobs as businesses can no longer afford their employees and the wealthy flee… implementing Mr. Obama’s reforms would literally do worse than nothing.” Now I know many of my liberal readers will dismiss Laffer’s comments simply because he served under President Reagan. But he has a point that fits principles of Financial Astrology.

First of all, Obama and the Democrats are probably right when they state that we need to do health care reform (or it insurance?) sooner than later. Once this opportunity passes, it will probably take a very long time to ever bring it back. And in the meantime, 47 million of Americans remain uninsured – a number that will no doubt grow every month. The idea that this is a unique time in history to do this is emphasized by the very rare mutual reception of Jupiter and Neptune in Aquarius, with Uranus in Pisces. This type of compassionate action is consistent with the principles of Neptune and Pisces, and the idea of doing something that benefits such a larger segment of humanity is consistent with the principles of Uranus and Aquarius. In astrology, Jupiter and Neptune rule Pisces, and Uranus rules Aquarius. Because they now are in each other’s signs, they are in “mutual reception,” which is very strong (like a conjunction between all three planets). The mutual reception of these three planets has only happened twice in the past 3000 years (the last time was 1843). They are in effect now, January 2009 through January 2010. This is the “best” time to do something along these lines. Yet, how can this ideal be implemented without raising taxes, and in turn creating a long-term drag on the economy?

The answer, I think, is relatively simple (well, to a fiscal conservative, social liberal, that is). Get the 3 million people who have lost their jobs back on the payrolls. Instead of taking money from the government’s coffers, they would instead add to the tax revenues that the government collects – and needs — to afford these programs. How do you do that and stay consistent with the lessons of Financial Astrology? We know from historical research that economic recessions are more numerous and longer lasting in the 16-20 year waning phase of the Saturn-Pluto cycle. This is in effect now 2001-2020, and it is most apt to peak at the waning square, which takes place November 2009-August 2010. Concurrent (and possibly the major cause) with these recessions are governmental policies of increased federal spending, increased federal deficits, followed by higher taxes and higher interest rates. So the solution is to not follow those policies that contributed to these economic declines in the past. Do the opposite, and get opposite results.

Let me make a simple suggestion that takes into account the lessons learned from this same Saturn-Pluto history. Instead of floating the idea that taxes will increase by at least 8% for small businesses to cover health care reform and a host of other programs, have the White House make a convincing and believable statement that no new taxes will be introduced on this segment of the population. Why? Because as long as small businesses fear their taxes will be increased, they will not hire. In fact, they are apt to continue laying more and more people off work, and even going out of business themselves. Small businesses employ approximately 80% of the non-government work force. If the uncertainty of tax increases is removed from their business planning, especially as an economic recovery is now about to begin, you would have a chance of re-employing those 3 million that just lost their jobs in the last 7 months over the next 1-2 years. And let us say that those 3 million people would earn, on average, $60,000/year. That is $180 billion/year of new income that would be taxed and added to the government’s coffers, instead of billions that are being taken out now just to cover unemployment disbursements. It is probably a $300 billion swing per year. And of course the government receipts would be even more than that in time, because as more people worked, they would have more money and hence demand for goods And services would increase.

It might take 1-2 years to get all those jobs back, once you removed the threat of higher taxes that is paralyzing small businesses from attempting any pro-growth measures, such as hiring new employees. As long as there is the specter of increased taxes on small business, which would raise monies in the short-term, why should these businesses collectively hire new employees? The recovery that is just starting now will be short-lasting, followed by another recession, probably deeper, unless this uncertainty and fear of higher taxes on small businesses isn’t convincingly removed from the debate. Unfortunately, these policies are consistent with the painful historical results of the Saturn-Pluto waning phase. If we don’t learn from our past mistakes, we are doomed to repeat them. This is both the value of astrology to society, and the frustration of astrologers who know of these cycles, but live in societies where their ideas are too readily dismissed or ignored.

© Raymond A. Merriman


Disclaimer and statement of purpose: The purpose of this column is not to predict the future movement of various financial markets. However, that is the purpose of the MMA (Merriman Market Analyst) subscription services. This column is not a subscription service. It is a free service, except in those cases where a fee may be assessed to cover the cost of translating this column from English into a non-English language. This weekly report is written with the intent to educate the reader on the relationship between astrological factors and collective human activities as they are happening. In this regard, this report will oftentimes report what happened in various stock and financial markets throughout the world in the past week, and discuss that movement in light of the geocosmic signatures that were in effect. It will then identify the geocosmic factors that will be in effect in the next week, or even month, or even years, and the author’s understanding of how these signatures will likely affect human activity in the times to come. The author (Merriman) will do this from a perspective of a cycle’s analyst looking at the military, political, economic, and even financial markets of the world. It is possible that some forecasts will be made based on these factors. However, the primary goal is to both educate and alert the reader as to the psychological climate we are in, from an astrological perspective. The hope is that it will help the reader understand these psychological dynamics that underlie (or coincide with) the news events and hence financial markets of the day.

No guarantee as to the accuracy of this report is being made here. Any decisions in financial markets are solely the responsibility of the reader, and neither the author nor the publishers assume any responsibility at all for those individual decisions. Reader should understand that futures and options trading are considered high risk.