Chemicals as well as credit, are ruled by the planetary energy Neptune and the sign Pisces. On December 28, 2008 as transiting Uranus in Pisces (shocks and surprises) exactly challenged Dow Chemical’s founding chart Neptune in Gemini, the government of Kuwait suddenly announced it was canceling its joint venture with Dow, a deal valued at $9 billion.

Gemini is ruled by Mercury, the planetary energy of contractual agreements. Dow was founded when Mercury was retrograde* in Gemini. Dow’s retrograde Mercury challenges natal Jupiter and opposes natal Saturn and Uranus, raising the potential that Dow enters into ventures or makes acquisitions that it overpays for (Jupiter) in relationship to the return (Saturn). Uranus raises the potential that Dow could enter into deals too quickly without thinking through all the ramifications and including the appropriate contractual contingencies. The surprise nature of Uranus would also describe deals that suddenly come undone.

Dow depended on the $9 billion from the $17.4 billion “K-Dow” joint venture to finance its $15.3 billion takeover of Rohm & Haas (ROH) that Dow announced back in July. Yesterday Moody’s and Standard & Poor’s downgraded Dow’s debt to three and two notches above junk status respectively. Dow’s (DOW) stock closed down 19% to $15.32, its lowest level since 1991. Rohm & Haas closed down 16% to $53.34, a far cry from Dow’s $78 a share takeover price.

The Dow/Kuwait/Rohm & Haas saga is a story of how over optimism obscures logic, from overpaying to failing to have appropriate contractual contingencies in place. Dow did not have a contingency with R&H that the deal was contingent on its venture with Kuwait. Dow could take legal action against the Kuwaiti government for a maximum $2.5 billion breakup fee, but Dow would have to prove Kuwait’s cancellation has damaged the company. Litigation would only serve to spoil current and future potential business arrangements with Kuwait.

Dow could pay Rohm & Haas a $750 million breakup fee to nix the acquisition; otherwise the deal must be consummated by January 10, 2009. If Dow goes ahead but fails to complete the deal by that date, Dow will be forced to pay R&H shareholders an amount above $78 a share for each day the deal gets delayed. In addition to the money from the Kuwaiti venture, Dow arranged a 12 month bridge loan for $4-6 billion from a consortium of 19 banks led by Citigroup (C), along with Merrill Lynch (MER) and Morgan Stanley (MS).