(45 year cycle)
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This Saturn/Uranus cycle’s correlation with Finance has had a clear focus – the introduction of Deregulation and the consequences that have flowed from that culminating in the collapse of key banks and many financial institutions and the rescue of others by government and central banks. If this cycle opposition really does correlate with the Credit crunch then it is probable that the issue of how the Finance sector is effectively regulated will not be resolved till after the cycle Three Quarter stage between 2020 and 2023.
The present Saturn/Uranus cycle started recently in February 1988, reaching its outgoing square (+90 degrees) in 1999. The Opposition occurs from 2008 to 2011 and the incoming square (+270 degrees) will be reached in February 2021. (The next cycle will commence in June 2032,) What relationship between intellectual change and the status Quo does this cycle signify ?
What might the cycle mean ?
HOW A NEW MINDSET SWEEPS AWAY ESTABLISHED INSTITUTIONAL STRUCTURES
We have given the generic meaning of this cycle as the ‘Relationship between intellectual change and the Status Quo’. The term ‘Status Quo’ is a short way of saying ‘the established order of things’. ‘Intellectual’ should be taken to refer to reasoning and understanding – to ideas and not to something academic. Whereas the Uranus/Pluto cycle signifies how the structure and methods of intellectual, scientific, technological and aesthetic thought alter in themselves and the Uranus/Neptune cycle signifies how innovative ideas get taken up as ideals by society, the Saturn/Uranus cycle deals with how a new intellectual mindset actually alters or sweeps away established political, economic and institutional and other structures. It is all about ‘ideas in action’ or ’revolutionary ideas’ . We are talking of the emergence of a major new set of societal attitudes or new ideas leading to the break-up of political or socioeconomic structures.
Here we shall be looking at the conjunction for clear indications that new ideas are being born which show signs of changing or sweeping away established political, economic and other institutional structures. Throughout history this conjunction coincides with the overthrow of the establishment, typically governments or ruling parties but as we shall see sometimes even empires.
THE START OF A NEW CYCLE
CONJUNCTION Nov 1986 to Jan 1990, (exact in Feb, June and Oct 1988)
The 1988 Conjunction, allowing for a 10 degree orb, extends from November 30 1986 to January 3rd 1990. It coincides with one massive change to the established political and economic structure of the world – the collapse of the Soviet Union and the end of the Cold War. It also coincides with other regional events and developments which while not immediately related could be said to have been influenced ultimately by the same new mindset or wave of ideas.
These include the Tiananmen Square massacre in Beijing, China where troops kill 2,000 demonstrators, violent unrest in South Africa leading to a new President F.W. de Klerk lifting a ban on the African National Congress (ANC) and releasing its leader Nelson Mandela, and the exit of Russia from Afghanistan after 8 difficult years. There are also the overthrow of longstanding governments in the Philippines, Haiti, Fiji and Panama. In all these cases the attempt to overthrow the Status Quo was arguably influenced by the same set of ideas – those pushing a new wave of human rights, democracy and national self determination campaigns. In a sense the unusual number of peace agreements reached in 1988 between Ethiopia and Somalia, between Chad and Libya, between Egypt and Algeria and between Iran and Iraq could be said to reflect the same drive to allow new ideas to alter the status-quo.
FINANCIAL DEREGULATION – BIG BANG
BIG BANG
The second major correlation is with major shifts or changes to the Status-quo in the structure of institutions at the heart of the world economy. In particular, the 1988 Conjunction comes close to the end October 1986 deregulation of the London Stock Exchange – the so called ‘Big Bang’, which sees the whole established structure of city financial institutions change, and which results in a pay-out of such huge sums of money to partners and traders that the UK property market undergoes a period of wild inflation. A similar deregulatory move culminated in the United States in the same year. Amendments were made to Federal Reserve Regulation Q such that by April 1986 all interest rate ceilings had been eliminated except for the ban on demand deposit interest. The philosophy behind ‘Big Bang’ has much to do with the new economic strategy of ‘globalisation’ that is set to sweep the West. Again here is an idea that alters structures.
ASIAN ‘TIGER’ ECONOMIES
The period also sees the ascendancy of the Asian ‘tiger’ economies – Korea, Malaysia, Thailand, Taiwan and Indonesia, changing the geographical line-up of the established markets. Financial astrologers (such as Langham, Brahy and Jensen cited in Bates & Bowles’s ‘Money and the markets’) have consistently pointed to a correlation between the Saturn/Uranus cycle and economic activity – especially with investment in production. The correlation with the rise and fall of stockmarket prices however has been considered far less marked. Despite this in October 1987, during the period of the Saturn/Uranus conjunction, ‘Black Monday’ occurs – a day on which a massive stock market crash ends a period of marked economic growth and speculation. The effects of this ripple into the following year when the US dollar registers an all time low and when the New York Stock Exchange registers its third largest one day fall ever. Financial collapse on a far greater scale is due to take place precisely at a later stage in this Saturn/Uranus cycle !
DEREGULATION & GLOBALISATION
However it is not part of this book’s plan to examine any complex inter-relation between planetary cycles and stockmarkets or microeconomic conditions. The relationship, if it exists, is far more technical and statistical than this book aims to be or is qualified to cover. All that can be said is that structural changes in financial institutions as well as changes to the structure of international business play a key part in stockmarket volatility as evident in crashes such as Black Monday. Deregulation of the central money market in London and elsewhere is closely linked to globalisation. As we shall see later deregulation will be inextricably linked to the 2008 global ‘credit crunch’.
OTHER GEOPOLITICAL CORRELATIONS
There are three other key geopolitical developments between the end of 1986 and the end of 1989 which can be explained as structural changes resulting from a new collective mindset ? The developments are the Tiananmen Square massacre in Beijing, China where troops kill 2,000 demonstrators, violent unrest in South Africa leading to a new President F.W. de Klerk lifting a ban on the African National Congress (ANC) and releasing its leader Nelson Mandela and the exit of Russia from Afghanistan after 8 difficult years.
CONCLUSION
The key events correlating with this Saturn/Uranus conjunction are therefore the break-up of the Soviet Union and the fall of the Berlin Wall along with the deregulatory changes made to the structure of financial markets that accompany the emergence of globalisation. The suggestion is simple: there is going to be no structural change in society’s major institutions before the year 2032 (when the new cycle starts) that has not in some way got the imprint of these events on it.
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OUTGOING SQUARE July 1998 to June 2001 (exact in July & Nov 1999 and May 2000)
Can we find in the relevant events and developments of 1999 and early 2000 a clear challenge or extension to the wave of ideas driving the overthrow of governments, institutions and practices inhibiting freedom which were seeded at the 1988 Conjunction ? The exact dates of the outgoing square are July and November 1999 and May 2000, but if we allow an orb of 10 degrees the period stretches from July 1998 to June 2001
DOTCOM CRASH
If the second most important development at the 1988 Conjunction was the Deregulation of financial institutions and the expansion of the number of investors, many of whom directly invested online in shares especially of the new technology companies, then the year 2000 certainly sees a major challenge to these developments – the ‘dotcom’ crash of April 2000. Though deregulation cannot be said to have led directly to the ‘dotcom’ crash, the ethos it inspired and the practices it encouraged certainly did. It is doubtful whether financial institutions would have piled into the ‘dotcom’ sector to the degree they did without the intensely competitive forces engendered by deregulation. It should be remembered that the 1988 conjunction also coincided with the ‘Black Monday’ stock market crash of October 1987. But the difference between the ‘Black Monday’ crash and the ‘Dotcom’ crash is important. The former was the result of a mixture of market forces, the latter was primarily the result of a combination of structural changes – in regulation, in the communications industry and in the investment community itself. And it is ‘Structural changes’ we are concerned with in this cycle.
ECONOMIC COLLAPSE THROUGHOUT ASIA
At the 1988 cycle conjunction we saw the rise of the Asian ‘tiger economies’ now in the years 1999 and 2000 we see an economic collapse throughout Asia as currency, share and property values plummet. The year had started with Japan reporting the most severe financial downturn in its post-war history. Then in April 1999, at the beginning of the Out square, China’s first major financial bankruptcy occurs as GITIC (Guangdong International Trust & Investment Corp) collapses with debts of US$4.5 billion – over the year China’s economy continues to deteriorate. In August the Ministry of Finance concedes that China is in recession with serious urban unemployment. In July 1999 Daewoo, South Korea’s second largest conglomerate, teeters on the brink of bankruptcy as management announces the corporation cannot meet the interest payments on its debt of a staggering $57 billion. Although in July 2000, as the Out square begins to move out of orb, it is generally concluded that the Asian economies had recovered from the crisis of 1998, the year 2000 sees economic stagnation continue in Japan. However the correlation is with emergent Asian economies and not the leading Far East economy.
CONCLUSION
The key developments at the Out square are twofold: first the appalling brutality in Chechnya and genocide in Kosovo is a severe challenge to the democratic and human rights optimism that accompanied the collapse of the Soviet Union and the end of the Cold War; second the challenge of the ‘dotcom’ crash to the forces unleashed by deregulation. Will the cycle opposition stage see some kind of maximisation of these developments ?
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OPPOSITION Oct 2007 to Aug 2011 (exact in Nov 2008, Feb & Sept 2009, April & July 2010)
What developments might we expect to see at the Opposition in 2008, 2009 and 2010 when the contemporary movement for democracy and human rights together with the more deregulated investment scene should both reach a point of maximum fruition but where inherent contradictions may surface ?
The Opposition first comes into orb in mid October 2007 and stays in orb, with several short exit periods, through 2008, 2009 and 2010 up till August 2011.
FINANCE – THE CREDIT CRUNCH
TOXIC ‘SUB-PRIME’ LOANS
Only 5 days after the Saturn/Uranus Cycle Opposition first comes into orb on Oct 19 2007 Merrill Lynch reports its first quarterly loss in six years of $8.4 billion – on structured investment mortgage loans. In the days that follow Switzerland’s largest bank UBS, Japanese megabank Mitsubishi UFJ and Citigroup report similarly drastic losses on US ‘subprime’ loans. This kind of lending means making loans to people who may have difficulty maintaining the repayment schedule. These loans are characterized by higher interest rates, poor quality collateral and less favourable terms – in order to compensate for the higher credit risk. The losses are the first sign that many of such loans on major banks books are toxic – incapable of repayment.
That the message has not reached regulators is reflected by the Europe MiFID deregulatory directive issued on Nov 1 dropping some key rules on trading equities. On Nov 7 and Nov 20 Morgan Stanley and Freddie Mac, America’s largest buyer of home loans both report billion dollar losses from the same cause. On Dec 10 UBS says it will write off a further $10 billion of subprime losses. On Dec 20 Bear Stearns reports its first loss in its 84 year history. As the year ends the US Federal Reserve and the European Central Bank battle to shore up the money markets. In January 2008 Credit Suisse and Countrywide, the US’s largest mortgage lender, are hit by subprime losses while Citigroup and Merrill Lynch report historically unprecedented quarterly losses of $9.8 billion and $16 billion. On Feb 3 the cycle opposition goes temporarily out of orb.
In the seven months the cycle opposition stays out of orb what takes place in the banking markets is simply a consequence of what has already happened – a couple of further loss announcements, the injection by central banks of huge sums, the rescue by JP Morgan of US investment giant Bear Stearns and in Britain the nationalisation of mortgage lender Northern Rock.
BANKING TITAN LEHMAN BROTHERS GOES BANKRUPT
On August 29 the day the cycle opposition comes back into orb Integrity Bancshares becomes the tenth US bank to fail in 2008. But the full force of the returning cycle opposition explodes very shortly after on September 15 when the 158 year old banking titan Lehman Brothers, burdened by $60 billion in soured real-estate holdings, files for bankruptcy. It is the largest corporate failure in the history of the United States ! The markets go into terminal panic while the central banks desperately pump in billions of euros, pounds and in the case of the US Federal Reserve 70 billion dollars and a similar size loan to insurance giant AIG. By September 18 central banks around the world have poured in $180 billion to reassure the markets. The Russian government and the Bank of England together inject similar massive sums.While part of Lehman Bros is sold off, the other major US investment banks Morgan Stanley and Goldman Sachs defensively change their banking status.
CENTRAL BANKS INJECT $620 BILLION
On Sept 29 the US Federal Reserve with the help of the European Central Bank (ECB), the Bank of England and the Bank of Japan agree to lend banks a further $620 billion ! On October 1 2008 the US Congress signs off a $700 billion bailout of the financial industry. On Oct 8 six central banks cut interest rates together in an attempt to shore up confidence in the world’s crisis-stricken financial system with the US Federal Reserve reducing its key rate to 1.5%. On that day the International Monetary Fund (IMF) says the world economy is entering a major downturn. At the same time Iceland is obliged to take over the third largest of its banks while it negotiates a E4.5 billion loan from Russia. On Oct 10 as stocks crash to five year lows the Dow Jones index (DJIA) has its most volatile day ever and the London stock market plunges 10%. On Oct 13 as the central banks pump in further massive sums Wall Street rebounds in the biggest stock market rally since the Great Depression ! The EU/ECB alone puts $2.3 trillion on the line to protect its banks.
However on October 22 the DJIA tumbles 514.45 points – its 7th biggest point drop in history, as investors fear these moves will not prevent the global economy going into deep recession. The next day former Federal Reserve Chairman Alan Greenspan calls the current financial crisis a “once-in-a-century credit tsunami”. However on Oct 28 the DJIA rises 889 points, the 2nd biggest gain in its history. In December as the crisis spreads beyond banking the US administration is obliged to approve an emergency bailout of the US auto industry, offering $17.4 billion in rescue loans. The following month the UK Government will announce a similar measure. On January 1 2009 the Bank of America purchases investment giant Merrill Lynch to save it from bankruptcy. In February the US Treasury pushes out the boat further announcing a stimulus package that could amount to as much as $2.5 trillion.
UK’S ROYAL BANK OF SCOTLAND REPORTS £24.1 BILLION LOSS
In Europe a week later the Bank of England cuts interest rates to 1.5% – the lowest level since its founding in 1694 – it will fall a couple of months later to 0.5% and stay there. On Jan 14 2009 shares in Germany’s biggest bank Deutsche Bank slump as it posts massive losses. On Feb 13 the British Lloyds Banking group, already 43% state owned, announces a £10 billion loss at HBOS, a bank it had taken over four months earlier. But on Feb 13 the Royal Bank of Scotland reports a massive £24.1 billion loss – the largest in British corporate history – partly because of its mis-timed takeover of Dutch bank ABN Amro. In early March Eastern Europe’s struggling banks get a $31 billion loan. In April 2009 as the IMF forecasts losses from the credit crunch could reach $4 trillion, the Saturn/Uranus opposition goes briefly out of orb – till July 1st. During this gap there are no significant money market events.
BY 2009 GLOBAL CREDIT CRUNCH HAS COST $10 TRILLION
On 31 July 2009 the IMF states that the global credit crunch has cost governments more than $10 trillion. However in August France, Germany and Japan emerge from recession and in September some 27 central banks back new measures to strengthen supervision of the global banking industry – confirmed by the G20 summit on the 26th. On 15 October 2009 the DJIA index breaks through the 10,000 mark – the first time in a year. On Nov 13 the Eurozone economy emerges from recession. On Nov 19 the Organisation for Economic Co-operation and Development (OECD) says growth and recovery are expected in 2010 in just about all world regions. On Nov 27, as the Saturn/Uranus opposition goes out of orb again, US shares fall on worries about Dubai’s debt problems – accentuated by the refusal of the Dubai government to guarantee the debt. For bank debt is now no longer the key issue – the key issue is government debt – not least in the Eurozone area.
Read the book to see how the Eurozone crisis correlates closely with the remaining part of the Saturn/Uranus cycle Out square
This Saturn/Uranus cycle’s correlation with Finance has had a clear focus – the introduction of Deregulation and the consequences that have flowed from that culminating in the collapse of key banks and many financial institutions and the rescue of others by government and central banks. If this cycle opposition really does correlate with the Credit crunch then the health of the banking sector is unlikely to improve till the end of 2016 when the cycle reaches the unchallenging 240 degree stage. However it is probable that the issue of how the Finance sector is effectively regulated will not be resolved till the cycle In Square between 2020 and 2023.
The Saturn/Uranus incoming square came into orb on Jan 11 2020 and will last until 21 November 2023. The exact hits are in February, June and December 2021. Among the issues that have been correlated with this cycle since 1988 that of Financial Regulation and associated Finance market crises now appears top of the list. Between July and November 2020 any imminent eruption of a market crisis or regulatory move remains hidden but in November when the end of the global COVID-19 pandemic is in sight the result of the huge cessation of business and employment for so long is likely to ally with the increasing issue of government debt to lead to an upheaval in this area. Major Upheavals in Russia and China and possibly South Africa and Afghanistan may also be anticipated
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Source
http://cyclesofhistory.com/
