We do not yet know any details about the recently announced accounting malfeasance at Freddie Mac. What we do know is that Freddie Mac has long been considered the more conservative of the two government-sponsored mortgage guarantee entities, with Fannie Mae usually assumed to take far more liberties in their hedging and accounting than Freddie.

We also know that this news broke just after Saturn entered Cancer on June 4th, 2003, and Saturn will remain in Cancer until July 16, 2005. Saturn in Cancer periods have in the past typically come at the end of difficult periods -- the last days of WW1 (from May 11, 1915 to June 24, 1917 - with the exception of a short 6-week interlude in the 4th quarter of 1916), the end of WW2 (June 20, 1944 to August 2, 1946), and the end of the Vietnam War and Watergate (August 1, 1973 to Sept 17, 1975).

Basically, the sign of Cancer is associated with the home and with endings, and Saturn with difficulties and limitations. The U.S. is also a Cancer country, being founded on the 4th of July 1776. Thus, Saturn in Cancer periods often bring fear or difficulty with the home (property markets) and to the U.S. With President George Bush also holding a July birthday, Saturn in his sign may prove further constricting and frustrating to him personally.

Overall therefore, from a technical, fundamental, and astro perspective: We would not expect the recently announced problems at Freddie Mac to come and go in a trivial manner. Instead, and at a minimum, we would expect Freddie to reach the $28-$33 range depicted above by the PEI cycle date in late December 2004.

Moreover, if accounting concerns ever start to stretch to Fannie as well, those buying the overall market today will certainly regret that decision. These companies reside at the very heart of the U.S. economy to a far larger extent than most neophyte investors currently appreciate.

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