This article was originally published in The Financial Times
In a darkened room under a domed ceiling, glimmers an animated starscape that is also a live representation of global stock markets. Shares float through the night sky according to the market’s currents. Conglomerates form constellations, industries are galaxies – and Lehman Brothers is a black hole.
The Black Shoals Stock Market Planetarium is an art installation devised by Lise Autogena and Joshua Portway that has toured galleries in recent years.
Their inspiration was “the hidden world of financial astrology,” says Ms Autogena, referring to the practice of divining market events by studying the movements of the stars.
Despite the air of pseudoscience, financial astrology has been growing in popularity and complexity. Once limited to the almanack and the horoscopic basics of looking at a company’s date of birth and then examining starcharts, the discipline now apes the mathematical methods of rival financial theories.
Market Analyst, a financial software product, has an inbuilt astro-finance modelling tool. It charts celestial movements through the ages and correlates them with economic data – light years away from the ancient stargazers who advised farmers on crop yields.
“It’s all about number crunching,” explains Christeen Skinner, a financial astrologer in the UK.
The Black Shoals Planetarium is a wry nod to the Black-Scholes formula, one of many mathematical models that reinforce the perception of the market as supremely rational.
Yet the rather less rational realm of financial astrology remains compelling for some investors.
Currency speculators have been consulting astrologers en masse about India’s rupee avalanche, which GaneshaSpeaks.com, India’s leading astro-finance consultancy, says it foretold.
“The launch date of the new Rupee symbol was not a favourable one,” says Dharmesh Joshi on the organisation’s website, which operates a 24-hour helpline. Economists are more inclined to pin the fall on uncertainty over whether the US will taper its asset purchases.
However, a receptiveness to financial astrology is not limited to countries rich in superstition such as India. The discipline also has a following in Britain and the US.
Ray Merriman, for example, says he has 7,000 subscribers to his MMA Cycles astro-finance consultancy in Michigan.
The New York Astrology Center run by Henry Weingarten, a commodity trader, sometimes charges $1,000 per consultation, owing to a reputation for successfully predicting stock market plunges, such as Tokyo’s in 1990.
Grace Morris, another well-known US astrologer, has featured in Forbes magazinefor her record of consistently outperforming the market.
However, Ms Skinner rejects the idea that her discipline can alchemically turn out riches. She insists instead that her methods should be employed only to complement other tools. “You would be a fool to rely solely on financial astrology,” she says.
The mathematisation of financial astrology may have helped improve its credibility in the minds of some investors just as conventional techniques bear the taint of the global financial crisis.
For example, in his book The Black Swan, Nassim Nicholas Taleb attributes to conventional techniques “no better predictive value for assessing the total risks than astrology”.
This would not have surprised the economist John Kenneth Galbraith, of course, who once joked that “the only function of economic forecasting was to make astrology look respectable”.
That is one economist’s forecast which turned out to be correct.