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A Bubble in Time

We live in a time of bubbles. Over the past few years we've witnessed Internet and technology stock bubbles, and now the end-phase of what many observers believe will prove to be a real estate bubble. We've seen the emergence of what might be best described as a religious bubble, with fanatical adherents of many persuasions taking their beliefs to deadly extremes.

This age of rapidly expanding bubbles began in January 1995, when the planet Pluto, as referenced against the coordinates of the tropical zodiacal, left the sign of Scorpio and moved into Sagittarius. Astrologers describe Pluto as the planet of dramatic transformations, of evolutional changes in cultures, ideologies, human activities and consciousness itself. The sign of Sagittarius, thought to be ruled by the planet Jupiter, is intimately concerned with the nature and power of beliefs, in our coming to grips with issues around faith (both religious and psychological), and in evaluating the validity of these beliefs within the framework of the physical world. In a very real sense, when Pluto entered tropical Sagittarius, for a period of 13 years, the dynamics underpinning human belief found itself under a high-powered cosmic microscope.

Identifying a Bubble
Let me first address the question of what a bubble is, and how one would go about recognizing one. In simple terms, a bubble is present when optimism about an area of human activity becomes so strong, so powerful, that caution and common sense are temporarily suspended, and a collective belief in the rosy scenario overtakes everything else. The phrases often operative when a bubble is expanding are: the rules or paradigm have changed; or, this time is different than all the others. In fact, the world does change, and fundamental shifts in activity and behavior do sometimes take place overnight – but these changes can often only be identified in hindsight.

In the midst of a bubble, so-called experts (like stock analysts, economists, or ideologically-driven politicians) are sure the dynamics present in the current surge are permanent, and that they can know such a thing in real time. So, for example, in the late 1990s, Henry Blodget, Mary Meeker, and other analysts covering the sector, fearlessly preached the gospel of Internet investment, on the premise that the emerging interactive revolution would fundamentally change the nature of how business was conducted – prompting investors to bid up Amazon.com, Yahoo.com, and Pets.com (to name only a few examples) to ridiculous levels.

These analysts were right, of course – right in their assessment that the Internet would change the way we live. But, in the instance of Amazon, an Internet retail business is just a retail business. At the end of the day, regardless of who the first companies to appear on the Internet were, any surviving companies would inevitably have to be valued in comparison to older competitors in the brick 'n mortar universe – who themselves would also eventually get on the web. In hindsight, this insight seems as obvious as saying that the sun will rise tomorrow in the east. Back in the heady days of the Pluto in Sagittarius induced Internet bubble, however, such a sober, dare I say saturnine, perspective would have left an investor, research analyst or fund manager sitting out the wild, heady ride to the top, and, hence, behind. But, like in the fable of the race between the hare and the tortoise, the sober, steady course eventually proved the winner.

Bubbles, Bubbles Everywhere
Since Pluto in Sagittarius has been about beliefs, an examination of the relationship between the belief in a Y2K bug, and its role in inflating the technology bubble is instructive.

Remember Y2K? It seems so long ago, seen in the aftermath of the 2000 election fiasco, 9/11, the bear market, the recession and two American wars. To refresh your memory, the Y2K phenomenon involved a belief that computer hardware and software written in the early years of the computer era did not properly anticipate dates in 21st century. With the next millennium only a few years away, society was faced with the prospect that some software, PCs and mainframe systems, controlling everything from electric power generation to the issuance of social security checks, would be unable to function properly when the clock struck 12:00 am on January 1, 2000. This set off a mad rush to upgrade software and hardware across the world, including government agencies, small businesses, large corporations, and home users.

This rush to upgrade ultimately unleashed a wave of business capital expenditures (or CAPEX), on products and services in the software and hardware/technology sectors, expenditures that dramatically changed the short-term dynamics of these industries. This crest in demand occurred outside of traditional cyclical patterns. This is important because it would be interpreted as marking the beginning of a “new economy”. Remember that phrase – “the new economy”? You should, since it was bandied about quite a bit during the late 90s, as the justification for the supposed arrival of a new era business model – a model, it turns out, that was to prove unreliable shortly after the arrival of the year 2000, when businesses, having survived the feared Y2K scare, closed the spigot on CAPEX.

This led to the profits recession of the year 2000, the beginning of worker layoffs, the cascading collapse of the technology rich NASDAQ, an inverse “wealth-effect” (in which portfolio holders looked at their stock statements and felt a whole lot poorer than they did 12 months earlier), and the mess the world economy is in today. The key point to take note of here is that many evangelists for the “new economy” clearly did not take the strictly short-term stimulus effect of Y2K into account when making their long-term valuation and earnings forecasts, or investment recommendations. As in our example above, they were sure that a new paradigm had emerged – and, characteristic of the Pluto in Sagittarius signature, they were smart enough to tell you about it.

Even in the aftermath of the NASDAQ's collapse, and the 35% decline from the top in the DOW, there was still quite a lot of money sitting around that had been made during the boom years. With the stock market now looking like less of a sure thing than during the “buy-the-dips” late 90s, that wealth had to go somewhere. That safe harbor was thought to be real estate. Obviously, in comparison to the risk involved in buying Pets.com, real estate is a significantly more stable, safe investment. Real estate had been rising slowly through the boom years of the 90s, reflecting the impact of the overall greater sense of prosperity Americans felt, as well as the appeal of the lower interest rates of the decade (particularly in comparison to those of the 80s). But the fireworks really began when Jupiter moved into the zodiacal sign of Cancer (which is thought to rule home and hearth), in the middle of 2001, when we saw real estate prices begin an ascent that once again struck more prudent observers as a bubble.

The engine driving this amazing appreciation in values was three-fold: 1) with the FED dropping interests rates in hope of goosing the slowing economy, mortgages offered tremendous buying power in comparison to earlier periods; 2) real estate was naturally perceived as a safer investment in light of the ongoing bear market; 3) there was a housing supply & demand imbalance due to population growth. Hence, investing in real estate seemed like a much surer thing, especially when compared to the rubble left in the aftermath of the Internet and technology bubbles. In truth, compared to the prices set at the previous peak in 1987, real estate prices do appear somewhat more representative of fair value than did technology stock prices in March of 2000. But a value is only a value if one is able to continue paying their mortgage. Here in New York City, in 2002 and early 2003, real estate prices continued to skyrocket, even though the unemployment rate hovered above 8% – an astonishing juxtaposition of economic conditions.

Clearly, home ownership, and the greater value offered by low interest rates are a good thing, but they do present risks. The downside risks of this scenario, or more critically phrased, the ownership of too expensive a home, are: 1) the inability to pay a mortgage and/or property taxes under adverse economic conditions, as when one or both bread-winners lose a job; 2) the loss of financial flexibility if a situation arises that makes it desirable to sell that home.

For instance, many purchasers who bought at the peak of the last bull cycle in real estate, in 1986 and the 1st half of 1987, were unable to sell, or forced to absorb tremendous losses, when they attempted to move on in the early-to-mid 1990s. The home equity phenomenon also fits in here. As in the mid-80s, many current homeowners have taken out substantial home equity loans against the current value of their property. With corporate spending still at depressed levels, most observers credit vibrant consumer spending – often financed through these home equity infusions and further accumulation of credit card debt – as the dynamic keeping the American economy afloat. Rather than husbanding resources, these consumers retain their faith in the triumph of the rosy scenario – an economy that recovers in the immediate future, provides robust future growth, and continued impetus for a further appreciation of real estate values, thus covering the bets they have placed against their homes. The home equity/real estate phenomenon is an extension of another Pluto in Sagittarius paradigm – the wealth effect.

The wealth effect is a phenomenon, originally spoken about during the stock market boom, where people would look at the tremendous appreciation in the value of their stock portfolio, feel more economically abundant, and subsequently be that much more willing to purchase additional goods and services. Once the stock market began its purge in March of 2000, this urge to base one's sense of their financial security on paper values was shifted from equities to real estate. But, in both instances, unless people sold stocks or homes, the entire effect is grounded more in Sagittarian hopes and dreams, than any real, tangible, net worth.

A Bubble in Faith
Sagittarius is a hopeful, outward-seeking, expansive, adventurous energy. In the late 80s, I remember thinking about the possibilities of Pluto in Sagittarius with tremendous anticipation. I had a sense that in some way, metaphorically speaking, the world could become a little bit that very Sagittarian moment in the opening credits of Star Trek, The Next Generation, when the Enterprise goes from impulse power to warp drive, leaving behind only a brilliant flash of light in its wake. In a sense, the great bull market in technology and Internet stocks did appear to rise as if powered by a kind of warp engine. And, once the engine was ignited, so has the real estate market. So, perhaps my space travel metaphor did indeed come into manifestation. But, Sagittarius is also strongly connected to the concept of religion, or expressed more concretely – the establishment of specific belief systems about the nature of humanity's relationship to the cosmos, for the purpose of making us feel more comfortable during our tenure here on earth. The intersection of both these elements were to make their presence felt early in Pluto's passage through Sagittarius, via the strange journey of the Heaven's Gate cult.

The Heaven's Gate cult, based in San Diego at the time of the climactic events that bring it to our attention, was led by a man named Marshall Applewaite – who originally taught followers that they would be able to ascend to heaven when UFOs came to pick them up. After many years, the death of the group's co-founder, and numerous twists and turns, the cult apparently became tired of waiting for their ride. Unwilling to let go of their fanatical beliefs, they decided that the arriving Hale-Bopp comet was accompanied by a spaceship; and, somehow, they would be able to ascend to the ship by leaving their physical bodies behind, through suicide. This fantasy of spiritual realization attained through death would not be limited to sunny California, however, but would soon make itself known via the new face of Islamic terrorism – suicide bombers, first in Israel, then elsewhere in the Middle East, and ultimately, in the attack on the World Trade Center and the Pentagon, on 9/11.

If we want to understand the dark side of faith, of an unhealthy response to our need to feel safe and secure in an often-frightening world, we only need look at the rise of religious fundamentalism in Islam and Christianity. One of the characteristic elements of these extreme forms of both world religions is a need to divide the world between the blessed and those who are somehow servants of Satan. Both groups frequently speak of the righteousness of their political causes. Another trait in common is an embrace of moral clarity (to borrow a phrase that Dick Cheney has used in an eerily similar context) – often achieved by a return to a strict, literalist interpretation of scriptural texts, in contrast to a metaphoric re-interpretation of those texts in light of modern scholarship and our much greater understanding of human psychology, comparative mythology and religion.

Both groups routinely perceive their own successes, or adversity experienced by non-believers, as a reflection of God's personal favor or displeasure manifesting in the world. For instance, in the video in which Bin Laden is seen taking credit for planning 9/11, he gives profuse thanks to Allah throughout his narration of the various stages of the collapse of the WTC. One can only speculate about whether he offered Allah equal praise and thanksgiving when American bombs fell on Tora Bora, or as Northern Alliance forces were routing his colleagues in the misogynous Taliban. Clearly, Allah works in mysterious ways.

Similarly, also in the aftermath of 9/11, Jerry Falwell and Pat Robertson had the following to say during a broadcast of the 700 Club:

Falwell: "God continues to lift the curtain and allow the enemies of America to give us probably what we deserve."

Robertson: "Jerry, that's my feeling. "I think we've just seen the antechamber to terror. We haven't even begun to see what they can do to the major population."

Falwell: "The abortionists have got to bear some burden for this because God will not be mocked. And when we destroy 40 million little innocent babies, we make God mad. I really believe that the pagans, and the abortionists, and the feminists, and the gays and the lesbians who are actively trying to make that an alternative lifestyle, the ACLU, People for the American Way – all of them who have tried to secularize America – I point the finger in their face and say, 'You helped this happen."

Falwell and Robertson are exhibiting a very tangible form of collective religious paranoia, imagining that somehow God is heaping trials and tribulations on the nation because of its failure to live up to their personal spiritual ideals. While it is easy to mock these pronouncements, the truly scary thing to consider is that these Christian fundamentalists form a core support group for the current administration, and retain access to officials at the highest levels of government. In their own way, they seek the very same ideological control over American life that Islamic fundamentalists throughout the Middle East seek to exercise in their spheres.

The attack on the World Trade Center is emblematic of this dark side of Pluto in Sagittarius. The previous generation of Muslim/Arab nationalist terrorists might well be willing to die for their cause, but they rarely, if ever, specifically designed their attacks to culminate with their own suicide. The modern variety of al Queda terrorists, however, act with complete moral clarity, confident in their faith that he who dies defending Islam will earn an eternity in Paradise – surrounded, of course, by the stipulated 72 virgins. Like the Heaven's Gate cult members, these suicidal terrorists clearly have never mastered the ability to live within their own skin, or find any comfort in the realm of a living, breathing earth; they are ready to trade everything for a belief in a better deal in the next life – a deal one strongly suspects they are taking completely on the basis of faith, rather than on the basis of any authentic spiritual experience.

A Nationalistic Bubble
The passage of Pluto through Sagittarius has been, in the end, a story of confident, brash, “true believers” – of Internet and technology stock evangelists; of well-meaning Americans buying into a fantasy of paper stock profits and paper property values; of religious fanatics more emotionally and psychologically fit to die than to live; and, last but not least, of the brash confidence and martial fervor of the neo-conservatives in and around the Bush Administration. The now famous/infamous (depending on your perspective) National Security Policy document that Paul Wolfowitz wrote in 1992, near the end of Pluto in Scorpio, was born amidst a much more skeptical, conservative era, and hence was ordered extensively toned-down by the then President, George H.W. Bush.

Looking back, Pluto in Scorpio represented a much more “conservative” period in comparison to our current time. It was an era of healthy fear. It was an old fashioned age when terrorists actually looked to conserve their lives after making their political statements. It was a time when cold-war psychological realities were given greater weight than untested theories, when the generation holding power still remembered war first hand, and did everything they could to avoid escalating tensions to the point where they might lead to another disastrous conflagration. It was a period of reluctant realization that an epidemic that began in one group could spread and endanger others, regardless of the supposed moral rectitude of the people originally infected with the disease. It was an era of grudging psychological realization in the socialist bloc that the economic premises behind their system were simply unsustainable, and had to be relinquished.

In comparison, Pluto is Sagittarius has so far proven to be about exploring the limitations of abstract, untested theories, with the possible cosmic intention, if I may be so bold as to offer my own theory, of allowing humanity the opportunity to develop greater skill at finding a healthy balance between having the courage to pursue yet unlived dreams and ideals - yet, at the same time, learn the difference between a realistic expectation of growth and an unconscious, drunken state of emotional and psycho-spiritual inebriation, the kind that has typically, for instance, led to the glorification of activities like war.

Having written extensively for the Human Potential Left website on my unhappiness with the thought process that led to the current war in Iraq, I'm going to simply sketch here a few details that demonstrate how representative of the Pluto in Sagittarius effect Bush Administration policy is – rather than repeat those arguments here.

With the Soviet Union defeated, and the United States standing triumphant as the one remaining superpower, the temptation must be great to ascribe various moralistic assertions to America's current status. However, history demonstrates that great powers can both rise and fall – and their declines often happen when they least expect it. The former Soviet Union's failed invasion/occupation of Afghanistan played a significant part in sapping that empire's economic and psycho-spiritual might. When we consider how amazingly ambitious the current U.S. plan for regime change and nation building in Iraq is, and the numerous things that need to go right if this enterprise is to even succeed – especially without the strong support of the United Nations – one does begin to see parallels to the hubris and overconfidence that, for a time, allowed the bulls to run so powerfully in the late 90s (and led to one economist's prediction of a DOW 36,000).

The Times Will Soon Be Changing: Pluto's Entry Into Capricorn
Pluto will leave Sagittarius in 2008, when it will begin a 16 year passage through the more dour, fastidious, and emotionally realistic sign of Capricorn. If Pluto in Sagittarius has been marked by irrepressible optimism, and a willingness to see the glass as half full (and even three-quarters full), Pluto in Capricorn is likely to evoke the other side of the equation – pessimism, a painful awakening to the hangover brought on by excess, and the catastrophic damage that results from basing one's future largely on hopes and dreams. Pluto's passage through Capricorn is likely to have profound implications for authoritarian governments, or countries or institutions (like organized religions) that have attempted to dominate regions or areas of human life. For instance, during Pluto's last passage through Capricorn during the 18th century, we witnessed an event that forever altered the authoritarian model on which the world was based – the American Revolution.

Raymond Merriman's excellent study of the Foundation Long-Term Stock Index, featured in his Ultimate Book on Stock Market Timing, Volume 2 (Geocosmic Correlations to Investment Cycles), strongly suggests that the absolute bottoms of bear markets are achieved when both transiting Pluto and Saturn temporarily reside in “cardinal” signs” (Aries, Cancer, Libra and Capricorn). The next such coupling of these two planets is slated for 2010, a period in which the first of the baby boomers will have begun to retire, and hence are likely to be taking wealth out of the system, rather than contributing to it.

This time period also marks the probable detonation of the Social Security and Medicare time bombs. Considering the record levels of personal and real-estate debt that Americans currently hold, and strong likelihood of a true bottom in the DOW coinciding with a serious economic recession, one suspects that personal bankruptcies and home foreclosures will grow to epidemic levels, and that only the most prudently run banks will be able to withstand these pressures. The rest will either need to taken over or bailed out by the Federal Government – which itself may be running massive yearly deficits if the rosy scenario envisioned in the Bush tax plan does not come to pass.

Add to this scenario the economic impact of perhaps several devastating terrorists attacks on United States soil, the financial burden of occupying and rebuilding Iraq, and if the neo-cons get their way, perhaps Syria and Iran, and one begins to seriously question whether the current economic system will be able to withstand the stress. Within this context, one really needs to doubt the wisdom of the current plan which intends to once again subjugate decades old, if not centuries old, resentments between Shiites, Sunnis and Kurds in Iraq, in a new government, with very a narrow coalition of nations taking the role of institutional nanny. Will the Iraqis, and the larger Arab world, comes to see the United States as the huge institutional power standing in the way of potentially organic restructurings along lines of their own choosing? Now that the die has been cast, I guess that we will have to stay tuned to find out.

A Word From Our Sponsor
But what does an astrologer know, right? Potentially, quite a bit. For instance, in December 2000, I wrote the following in an article for a technical astrology audience (published in February 2001 on the website of the International Society for Astrological Research website www.isarastrology.com, and still available in its original, unedited form) in regard to the potential challenges facing the Bush Administration:

"A third option, which could manifest regardless of whether either scenario outlined above comes to pass, is that Mars in Scorpio suggests the dramatic projection of military power somewhere outside of the continental United States – perhaps in response to a series of terrorist attacks, or even an attack upon the presidency itself. An old enemy of the Bush dynasty, Saddam Hussein, has been making noises as of late – and is said to be extremely interested in testing the resolve of the new administration. Bush's natal Pluto and Venus MC lines run through Iraq, with their midpoint falling right through Baghdad, suggesting obsession with his father's old enemy – especially if Hussein continues in his attempts to evade the remaining U.N. sanctions. However, as seen from the perspective of Astro*Carto*Graphy, Bush's natal Mars is not angular in Iraq – so direct military action may not be likely (but covert CIA-inspired activity might). On the other hand, Bush's Mars Midheaven line runs directly through Afghanistan (where suspected terrorist leader Osama Bin Laden is said to be hiding). Natal Pluto MC runs not only through Iraq and much of the Middle East, but directly through Mecca, the spiritual center of the Islamic world (while the inaugural chart Pluto MC runs directly through Tehran) – with inaugural Saturn conjunct the MC for Jerusalem. Natal Pluto MC also falls very near to Moscow (where it joins Mercury MC), implying that suspicion, increased espionage and a return to a cold-war style rivalry might be conceivable in regard to United States-Russia relations – especially with a former KGB official, Vladimir Putin, heading the Russian government. Other potential international hotspots include North Korea (with the explosive inaugural chart Mars-Saturn-Admetos-Uranus T-Square angular in P'anmunjom) and Serbia (same aspect, with Mars-MC falling directly atop the coordinates of Belgrade). In short, all the military hotspots of the "old" and "new world orders" are back in focus during the Bush administration. Whether any of these hotspots erupt, and come to exclusively embody the threatening symbolism of this Mars, remains to be seen. My guess is that President Bush may find himself fighting a battle on both the domestic and international fronts."

I obviously didn't get everything right, as it should be. The future is always ours as individuals, and collectively, as a species, to determine. And I wasn't the only astrologer to describe the probable shape of events – as similar forecasts were arrived at by a number of other colleagues, also well in advance of the events. But, if something so dishonored by scientists, the intelligentsia, and religious authorities can provide so prescient a forecast, then what does it tell us about the limitations of our collective belief systems? Do we really know as much about the underlying principles of our universe as we think we know?

The Tao That Can Be Told...
Which brings me to a final observation about the passage of Pluto through Sagittarius. As we witness the probable expansion of an ongoing family feud between Judaism, Christianity, and Islam, it is fair to note that these religions do not represent the only legitimate ways to understand man's place in the cosmos. The carnage this feud entails also impacts adherents to Buddhism, Zen, Hinduism, Taoism, various Native American and indigenous tribal religions, not to mention Atheists and Agnostics, as well as people who prefer a spiritual approach that acknowledges the best elements of all these noble traditions – but also incorporates modern insights gained through the work of psychologists like Carl Jung, or the writings of Joseph Campbell, or astrology, or the process suggested by the 12-Step Groups.

With this broader context as a backdrop, let me suggest that if the cosmos is trying to communicate anything, it might be to lighten up, and not take ourselves so seriously. None of us are wise enough to consistently know what the truth is, but together, if we can learn to truly listen to each other, we have a much better chance of arriving at a portrait of ultimate reality that might actually look a little like the land that God comes from. In the end, Sagittarius isn't about inflation, ego or bubbles at all, but about synthesis, about bringing together multiple strands into a coherent whole. None of us have minds expansive enough to engage this process alone. Consequently, a willingness to cultivate humility might prove key to resisting any temptation to become as inflated as the bubbles we have seen expand before our eyes, and hence avoid the calamitous crash that inevitably follows.

The Tao that can be told is not the eternal Tao.
- Lao-Tzu, Tao Te Ching (as translated by Stephen Mitchell)

Matthew Carnicelli, © 2003. All rights reserved.

Originally published April 3, 2003; revised May 1, 2003.

For more on Pluto's passage through Sagittarius and Capricorn, see:

Size Matters: Understanding the Size-Related Dynamics of Our Emerging American Crisis?
America at a Crossroads
The Beginning of the End or the End of the Beginning?
A Brief Look Forward
Winning the War for Hearts and Minds