It’s hard and man, is it bloated!  I’m talking about the new budget that’s 144 pages long.

The Senate passed the budget at 3 a.m., not only getting around a filibuster effort, but also escaping the scrutiny that comes in the light of day.  The deal is the latest example of so-called conservatives caving to President Obama, and the irresistible goodies that come with unbridled spending.  The deal removes spending caps set in place from a 2011 sequestration agreement, adding an extra $80 billion or $558 per page over the next two years.

The GOP placed their half on defensive spending.

The deal also buys time.

By kicking the can down the road a couple of years, most of the culprits will be long gone before the day of reckoning, including President Obama, who actually calls the deal “responsible” because it breaks the cycle of shutdowns and manufactured crises that have harmed our economy.  Rand Paul has a different observation, calling the deal an “unholy compromise between right and left.”

The debt ceiling is lifted until March 2017.

Well, so much for talk about fiscal responsibility or bragging about the sharp decline in the government deficit, and rhetoric about loving our children and grandchildren.

The budget passed with a count of 63 yeas to 35 nays with 2 not voting.  Not a single Democrat voted against it.  In order to pass the measure, the Senate needed 15 Republican votes – it got 18.  Nevertheless, this budget will mark the changing of the guard within the party, as it could be the last hoorah for the establishment/insiders.

However, six of the ten oldest Republican senate members voted for the budget, which includes stalwarts of the establishment such as McConnell, Hatch, and McCain.  The 18 “yes” voters have an average age of 65 or the mandatory retirement age at many businesses.  On the other hand, the top ten polling Republican candidates for the White House have an average age of 53, and something tells me that the two youngest ones at age 44 will begin to move higher in public opinion.

Let’s hope this changing of the guard brings about the kind of leadership that the current generation of leaders have given up in the name of “doing business.”

In the meantime, this budget assumes it will raise $11.0 billion with a greater auditing of complex partnerships (mostly hedge funds), and will dump millions of gallons of oil at a loss of $1.5 billion to $2.0 billion.  However, only in Washington is it considered smart to buy high & sell low.

Of course, Wall Street will like this deal, not only is it good news for defense contractors, but it will take D.C. battles off the front pages, and it will allow a greater notion of calm even as the debt mounts.

Plunge Protection

The October rally came so far from left field that many are saying it’s the handiwork of the so-called Plunge Protection Team (PPT).  The PPT isn’t an urban myth- it was cobbled together by President Reagan in the aftermath of the October 19, 1987 stock market crash, also known as the “Working Group.” The goal was to avoid a repeat of the years that ensued after the market crash of 1929.  With the Dow off 24% on the infamous Black Monday, 33 top economists gathered in Washington, D.C. and decided a Great Depression was unavoidable.

Somehow, it was not only avoided, but the stock market also began a historic rally that took it from 2,246 in 1987 to 11,722 on January 14, 2000.

Some think the current PPT has sprung into action, which isn’t far-fetched; however, I think they did the best they could do in order to stave off disaster rather than buy enough stock for sustained rallies.

The one thing I learned at that point having been a broker for only a year and after a couple months on the research side was the following:

• Panic was a mistake

• Selling great stocks was a mistake

• Not buying was a mistake

These days, we are going through mini-versions of these crises each year.  And each time, the mistakes mount to the point where people end up so far behind, creating their own personal crash.  It’s hard to hold losers, but it’s even harder to mark amazing companies “losers” after a bad quarter or two.

#InvestingNotEasy