Financial astrologers gaze at stock markets in the stars

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, 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.


Myths are obscuring the truth about the Indian economy

Published in The Huffington Post

India’s reverence for her cows, considered holy by Hindus, is well-known. But one sacred cow has long had even the Western world genuflecting before it: the belief that since the ‘dismantling of the licence Raj’ in 1991, India has exploited its economic freedom to become what Foreign Affairs once declared on its cover “A Roaring Capitalist Success Story”. A narrative of the Indian economy’s elephantine forward stomp, regularly achieving annual growth rates between 7.5% and 9%, is pushed by observers, from the likes of former Procter & Gable CEO Gurcharan Das’s bestselling India Unbound to even the CIA’s futurologists, who expect India to overtake the US by 2050.


Yet India now sits on the brink of a currency crisis. In a rupee avalanche of Himalayan proportions, India’s currency has depreciated 14% since the beginning of the year, hitting an all-time low in August of 68 to the dollar. Despite the rejuvenatory efforts of India’s new “rockstar” central banker Raghuram Rajan, the rupee’s value remains below 60 to the dollar, a widely-held “psychological benchmark”. An exodus of equity investors looms. Although Unilever recently did kindly buy out minority stakes in its Indian division, foreign bondholders have withdrawn $6.5bn since mid-May.


Indian officials blame the prospect of US tapering (the rolling back of quantitative easing), dismissing the crisis – as Prime Minister Manmohan Singh did in his last speech on the economy – as “a short-term shock”, while the likes of India’s richest man Mukesh Ambani continue to claim “India is still rising”. But although the rupee, like most emerging market currencies, will prove a casualty of the US Federal Reserve’s monetary policy, the rupee crisis in fact points to a fatal seam in India’s entire progressive narrative.


For starters, US Federal Reserve Chairman Ben Bernanke can hardly be blamed for India’s enormous trade deficit (Ajit Ranade of AV Birla approximates to be $300bn by 2013/14), which, coupled with lower capital inflows owing to uncertainty over economic reforms, have summoned the spectre of a 1991-style current account crisis, a spectre Manmohan Singh supposedly banished to its grave during that era’s subsequent reforms.


Spellbound by India’s noughties growth rates, policymakers were unbothered by the fact that, unlike China, India was (and still is) importing more than exporting, neglecting manufacturing to become instead the world’s IT outsourcing capital. This despite the truism that no country in history has undergone an economic transformation without a labour-intensive manufacturing boom; India has yet to experience industrial revolution. The likes of Gurcharan Das hubristically believed that India could become the first economic superpower without a substantial manufacturing base: “The notable thing about India’s rise is not that it is new, but that its path has been unique.”


This illusory notion of Indian exceptionalism has been one myth among many that inspired the intoxicating vision of India’s tiger-like economic leap. Others include India’s much-vaunted ‘demographic dividend’, which, as Amartya Sen’s forthcoming book An Uncertain Glory points out, has been squandered on child mortality that is 25% higher than in neighbouring, infamously poor, Bangladesh. What human resource capital remains is a more likely booster of crime than GDP. India’s skilled, English-speaking workforce is similarly mythical, with a quarter of Indians effectively illiterate. Sen explains how literacy has always been at the forefront of any economic transformation, from present-day China to Meiji Japan, the latter’s 1868 literacy levels higher than India’s today.


And there India’s economic problems come full circle. To stave off a current account crisis, India needs to scale back government spending. That, inevitably, will result in the rolling-back of literacy and healthcare programmes essential for the healthy, educated workforce investors expect.


There are no easy answers to India’s economic bind. The only certainty is that the illusions haven’t helped. The Indian novelist Aravind Adiga’s insight that “the greatest danger to the nation’s future is no longer poverty or Pakistan, but overconfidence,” is an astute one. In a country famed for its mythology, such are the pitfalls when a tradition for myth-making pervades even the economy.



Introducing… Hemanta Mukherjee

Published in The Cambridge Student, November 2010

Chances are you won’t have heard of the late Dr Hemanta Mukherjee, but I’m in good company in insisting on rescuing this singer-songwriter-composer from obscurity; Salman Rushdie, Sanjeev Bhaskar and Amartya Sen have all mourned the disappearance of Hemant from popular consciousness, even in the Indian subcontinent, where once he reigned like an all-singing, all-dancing musical hydra combining the gifts of what can only be compared to Frank Sinatra, Daniel Barenboim, Irving Berlin and Ennio Morricone all rolled in one. He was: a singer whose wholesomely orotund voice no subcontinental could mistake, India’s foremost interpreter of the musical canon, a legendary lyricist whose songs inimitably captured the newly-freed country’s imagination, and a composer of the most acclaimed Indian film scores in cinematic history, from Saptapadi’s tragic Bengali ballads to the Hindi hit Nagin, whose chart-toppers won him a Filmfare (an Asian Oscar) in 1956. OverIndia the distinction between “high-brow” poetry and “low-brow” popular song has traditionally had no hold, and Hemant’s verses reached millions through the popular platform of theCalcutta andBombay film industries, beaming his voice – as often imbued with heart-rending pathos as with heart-warming whimsy – to the masses. Palpably a product of revolutionary Calcuttan cosmopolitanism, his idiom was multicultural and sophisticated but its meaning never beyond comprehension (a talent honed as a founder-member of the 1940s Indian People’s Theatre Association). You need no linguistic acquaintance to appreciate the sonorous savour of his voice and the old-world charm of his music, whose acoustic crackle now carries you away to a long-gone age of the transistor radio and an orient of magic carpets and petticoated princesses. Hearing Hemant is a lesson in history, music and literature. Unlike most lessons, it’s fun.

Greatest Cantabrigians: Jawaharlal Nehru

Published in Varsity, November 2009

Not only did Jawaharlal Nehru achieve one of the highest ever firsts in Cambridge’s NatSci tripos, but he also defeated the British Empire. Gandhi’s protégé and de facto leader of the Indian independence movement, he spent over a decade in British jails fighting for freedom for his 300 million countrymen. Elected the first and longest-serving Prime Minister of the world’s largest democracy, he set the impoverished nation he inherited onto its path to prosperity and became a key figure in post-war international politics. A hero to millions, this Cantabrigian is undoubtedly one of the towering figures of world history.