Demigods and Demagogues

Pappy 4

______________________________

I sit here and sip my newly distributed Pappy Van Winkle 15-year (rocks, a couple), and reflect on the consequences of today’s market shaking Presidential press conference.  Despite the obsequiousness of the White House Press Corps, some important truths were uncovered, many of them centering around basic math and fundamental civics.

For one thing, the President is either being extremely forgetful, or dishonest about the makeup of our current deficits.  As some of you may recall, Mr. Obama is quite fond of blaming our current fiscal deficit situation on either the “two wars” of Afghanistan and Iraq that he “inherited,” or “the Bush tax cuts” of 2003.  Let’s leave aside the fact that federal revenues have risen considerably—as a result of tax cut driven growth– since the days prior to the Bush tax cuts.  Let us also confirm (by Mr. Obama’s own declaration) that the war in Iraq is “over,” at least for now.  That means that the “causes” Mr.Obama loves to blame for spiraling deficits are, save for a war in Afghanistan that he has escalated according to his own plan (see below), are not really material to the gargantuan deficits we are facing right now.   So what is, then?

Well, some of you may recall the “emergency stimulus” that was signed into law in 2009.  A great bill totaling $831 billion in hand-outs via allocated spending (most of which was distributed to states to keep their own governments running) and “targeted tax cuts” which usually took the form of some sort of credit for jumping through some gov’t preferred hoop.

Any “stimulus” spending is arguably a problem because it’s top-down gov’t allocated spending, considered mostly “one size fits all” for the citizenry, and by that standard alone grossly inefficient.   The even greater problem with regard to such programs is that they raise the baseline spending in these categories permanently, unless specific cuts are made in those areas where spending was increased that first time.   This is what is causing our budget deficits to balloon far past what we had seen in the allegedly horrible “Bush Years.”

 

 

 

 

 

 

 

 

 

 

 

 

As you can see, the problem clearly is not revenue, and it’s not even overseas spending (although Mr. Obama has seen fit to increase that spending too).   The problem is domestic levels of spending that show few signs of abatement any time soon.

Today, the President suggested that an additional $1.6 trillion dollars in tax increases – levied wholly on the heads of the investing and producing citizens of the economy  (otherwise known as “the evil rich”) – will help solve this crisis.   But even allowing the Bush tax cuts to lapse will only produce another $75 billion a year.  How is that going to help attack the deficit?  Answer, it won’t at all, and what ’s more will likely become counterproductive as capital hides in inefficient and economically non-beneficial havens.

Fly’s tax attorney and others like him will be grinning wolfishly if this benighted “plan” comes to fruition, but only those spinners’ children will eat better, while the rest of us will have to contend with cold salt pork and beans as we continue to endure The Obama Winter.

The only answer is restructuring my friends, and that will entail some significant spending reductions and – yes! – entitlement reform.  Barack Obama still has an opportunity here to salvage his legacy.  If he can play “Nixon Goes To China” and pull off the hard work of entitlement reform, he will be forever after revered as a Sainted President.   If he’d rather continue down the path to perdition and Obamacare folly, well….

At least Mr. Cain Thaler will be grinning.

____________________________________

Many Bollinger Band Crash Trades were triggered in the PM segments this afternoon, and I believe I may partake in some rebound shooters (perhaps in GDX and GDXJ) to reap the reflexive bounce back due those names.  I think SLW and SIL are also prime candidates and if I see a “wash and bounce” tomorrow, I may even grab some NUGT and or AGQ.   We should be very close to done with this pain, however, so hang on at least, even if you don’t feel like trading.

Best to you all

__________________________

Demigods and Demagogues

Pappy 4

______________________________

I sit here and sip my newly distributed Pappy Van Winkle 15-year (rocks, a couple), and reflect on the consequences of today’s market shaking Presidential press conference.  Despite the obsequiousness of the White House Press Corps, some important truths were uncovered, many of them centering around basic math and fundamental civics.

For one thing, the President is either being extremely forgetful, or dishonest about the makeup of our current deficits.  As some of you may recall, Mr. Obama is quite fond of blaming our current fiscal deficit situation on either the “two wars” of Afghanistan and Iraq that he “inherited,” or “the Bush tax cuts” of 2003.  Let’s leave aside the fact that federal revenues have risen considerably—as a result of tax cut driven growth– since the days prior to the Bush tax cuts.  Let us also confirm (by Mr. Obama’s own declaration) that the war in Iraq is “over,” at least for now.  That means that the “causes” Mr.Obama loves to blame for spiraling deficits are, save for a war in Afghanistan that he has escalated according to his own plan (see below), are not really material to the gargantuan deficits we are facing right now.   So what is, then?

Well, some of you may recall the “emergency stimulus” that was signed into law in 2009.  A great bill totaling $831 billion in hand-outs via allocated spending (most of which was distributed to states to keep their own governments running) and “targeted tax cuts” which usually took the form of some sort of credit for jumping through some gov’t preferred hoop.

Any “stimulus” spending is arguably a problem because it’s top-down gov’t allocated spending, considered mostly “one size fits all” for the citizenry, and by that standard alone grossly inefficient.   The even greater problem with regard to such programs is that they raise the baseline spending in these categories permanently, unless specific cuts are made in those areas where spending was increased that first time.   This is what is causing our budget deficits to balloon far past what we had seen in the allegedly horrible “Bush Years.”

 

 

 

 

 

 

 

 

 

 

 

 

As you can see, the problem clearly is not revenue, and it’s not even overseas spending (although Mr. Obama has seen fit to increase that spending too).   The problem is domestic levels of spending that show few signs of abatement any time soon.

Today, the President suggested that an additional $1.6 trillion dollars in tax increases – levied wholly on the heads of the investing and producing citizens of the economy  (otherwise known as “the evil rich”) – will help solve this crisis.   But even allowing the Bush tax cuts to lapse will only produce another $75 billion a year.  How is that going to help attack the deficit?  Answer, it won’t at all, and what ’s more will likely become counterproductive as capital hides in inefficient and economically non-beneficial havens.

Fly’s tax attorney and others like him will be grinning wolfishly if this benighted “plan” comes to fruition, but only those spinners’ children will eat better, while the rest of us will have to contend with cold salt pork and beans as we continue to endure The Obama Winter.

The only answer is restructuring my friends, and that will entail some significant spending reductions and – yes! – entitlement reform.  Barack Obama still has an opportunity here to salvage his legacy.  If he can play “Nixon Goes To China” and pull off the hard work of entitlement reform, he will be forever after revered as a Sainted President.   If he’d rather continue down the path to perdition and Obamacare folly, well….

At least Mr. Cain Thaler will be grinning.

____________________________________

Many Bollinger Band Crash Trades were triggered in the PM segments this afternoon, and I believe I may partake in some rebound shooters (perhaps in GDX and GDXJ) to reap the reflexive bounce back due those names.  I think SLW and SIL are also prime candidates and if I see a “wash and bounce” tomorrow, I may even grab some NUGT and or AGQ.   We should be very close to done with this pain, however, so hang on at least, even if you don’t feel like trading.

Best to you all

__________________________

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