Congress sure doesn't seem worried as they aren't even coming back to work until 11 am this morning with only 16 hours left until 2012 ends and all those horrible, nasty things kick in. Of course, those horrible, nasty things, in summary, amount to paying more taxes and spending less money – isn't that what we need to do if we are ever going to get serious about paying down our debts?
Fear of the Fiscal Cliff gave us a horrible day on Friday, more so in the Futures, after the markets closed, than during trading hours, where the S&P technically closed at 1,402, down 1.1% for the day. After the bell, the fireworks really began as clearly Congress was not able to make a deal and that sent the thinly-traded futures flying down another 1%, with the S&P hitting 1,382.25 at the low and, even now (7:30), they are still trading at 1,387.
We also discussed going back to the well on our disaster hedges and, in that same comment, I listed 8 more nice put plays our Members could use for protection should we actually go over the cliff with all the bad reactions the pundits are expecting.
I hear on CNBC that the the Defense Industry will lay off 800,000 people on Jan 2nd which would, if true, save an immediate $40Bn a year if those are all $50,000 jobs. Seems to me, it would have been easier just to not build 400 F-35 jets at $107M each as LMT only employs 123,000 total people so, even if they shut down the company due to the loss of the F-35, it would cost 677,000 less jobs that way.
That's the essence of the entire fiscal cliff – we are simply going back to tax rates that used to exist at a time when this company was much more prosperous (cough, Clinton, cough, cough) as well as back to pre-pointless war levels of Military spending. The truth of the matter is that Defense jobs are not efficient jobs. In order to put a $30,000 salaried soldier in the field, our military spends $850,000 but it's $1.2M in Afghanistan due to the harsh conditions. Those are just 2011 figures, in 2012, the number is estimated to move up to $1.4M – none of which includes an improvement in the soldier's salary or benefits.
Are we a bunch of idiots or what? Republicans are fighting to cut off unemployment benefits and keep the military spending even though extending unemployment benefits for 10M families will cost $30Bn – about the same as it costs to keep 30,000 soldiers in harm's way. Idiots, definitely idiots…
Why do they do this? Because nobody in the top 1% makes any money helping 10M families avoid poverty – they take that $300 a week and just waste it on things like food and heat and clothes for their kids while $26,000 per week, per soldier, goes to fatten the wallets of all sorts of GOP contributors. What could be more American than that?
IN PROGRESS
