Operation Snake Eating Our Own Tail

Posted by Admin & filed under .

In 2003 I was a naval aviator flying F/A-18 fighter jets out of Naval Air Station Fort Worth Joint Reserve Base, Texas, with The Hunters of Strike Fighter Squadron 201 (VFA-201). For the first time since the Korean War a naval reserve fighter squadron was mobilized for active duty combat operations. Our country needed us in support of Operation Enduring Freedom and Operation Noble Eagle (take note of those names please…).

In preparation for deployment onboard the USS Theodore Roosevelt we painted the old Don’t Tread On Me flag on the speed brake of our 12 Hornet aircraft.

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And that’s exactly how we felt.

America had been kicked in the gut. Now it was time to pick ourselves up, dust ourselves off, and get to work. Justice needed to be delivered to some serious assholes.

But that was years ago…and a different America.

Today the state of the world and our nation is bad. And it’s only going to get worse. A lot worse. War and economic devastation are on the flight schedule. It’s not a matter of if, but when. Are you ready for what’s about to happen?

The financial tsunami that swept through the United States in 2008 has altered our national fabric forever, like a revolution. And not in a good way like the revolution that started a once great nation. A revolution that has created an elite class of bankers and institutions that are ‘too big to fail’, i.e. you and I must pay to keep them airborne even if they shouldn’t be, and another class of people who after bailing out these institutions cannot borrow one red cent of the money we loaned them. Seems fair…in our New Amerika.

With the Feds decision yesterday  to further drive us into debt with additional ‘credit easing’ to the tune of $267B by the end of the year, the only people or institutions that stand to benefit are those with good credit and banks/large financial institutions. These are the last people in America who need the help and that’s exactly where it’s going to end up. People with poor credit – many through no fault of their own because they’re upside down on their home, they lost their job, have medical issues, or simply got swamped by the financial tsunami – are the ones that need the most help. They’ll never see it. Old economics said low interest rates equal higher household spending, more business investment and hiring, and a relief of current and previous debt burdens.

This isn’t our father’s stock market anymore. New Amerika.

Somewhat to their credit, banks have surfaced some harsh lessons learned from the credit crisis – for example it’s a bad idea to give a waiter a no doc loan for $500,000 – and have tightened their lending standards. Good on ya. You’re a little late. We can have a whole separate discussion about Jimmy Carter and the CRA (Community Reinvestment Act) and how the federal government held a gun to the heads of banks and forced them to loan money to people who shouldn’t own homes. Note to democrats that believed that everyone should own a home – no they shouldn’t. You know who should own a home? Someone that can afford it. Make sense.

Not that banks weren’t complicit in this game. They were more than happy to feed the demand and make more money. They’re just as guilty as the government. And let’s not forget Congresswoman and Congressional Idiot Maxine Waters, Congressional Jester Barney Frank, and Wall Street Senator Suck Up Schummer who did everything in their power to thwart republican investigations into those quasigovernmental entities Fannie and Freddie. Waters called it racist…shocker…because Franklin Raines, the head of Fannie, was black. Oh by the way the government brought civil charges against Mr. Raines for shenanigans while he was running Fannie and ended up paying some serious fines. Nice job Ms. Waters…nothing to see there.

Barney Franks then lover/spouse/significant other was an executive at Fannie. So he obviously had no interest in republicans looking into the coming crises. And Chuck Shumer…well enough said. Contributions from Fannie and Freddie kept his huge mouth shut.

But now these same polices are going to drive this country deeper into a recession and if the ‘Fiscal Cliff’ or ‘Taxmeggedon’ hits on 1 January (hint – it will), we might even see a depression. According to the independent CBO, if 1 January comes with no action on Bush tax Cuts, Obamacare, Unemployment Benefits and a whole host of huge financial issues, they said the country will enter a recession overnight. Read that again… Not in a month a couple months or maybe a year. Overnight.

There’s an old Wall Street saying that ‘A recession is when your neighbor loses their job. A depression is when you lose yours.’

The financial crisis has given way to unchecked federal spending to prop up a failing economy. Personal and governmental fiscal responsibility has disappeared. It’s called the Obama Happy Meal; order whatever the hell you want and the guy behind you will pay for it.

Americans learned the term ‘too big to fail’, in addition to the converse that they are ‘too little give a shit about’. Seems the reps at Citi (C) couldn’t see a way to help our family, after we helped them. Vikram Pandit thanked the American people for their generosity in bailing them out, told us he’d help us out and then promptly turned around and told us to suck it. Shocked. Shocked I tell you. You can see what Pandit and Obama had to say about this, and how they both lied here - http://www.thestreet.com/story/10927291/1/vikram-what-happened-to-our-deal.html

So here comes the Fed yesterday, our Barney Fife with no bullets left in his gun, sprinkling more of our money on a market that should be left alone to fail. Why? Only by failing will we truly be able to rise from the ashes as a Phoenix. Right now we’re flying around like the buzzard from Bugs Bunny. TARP, Quantitative Easing I and II, Operation Twist (compare these government operation names to the military ones mentioned above) and the current operation launched yesterday, which I’ve decided to call ‘Operation Snake Eating Own Tail’. This will end. Poorly.

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As you can see from the chart of the CBOEs Volatility Index (VIX), volatility spikes, the Fed dumps money on the market drunks, and it appeases them. My wife was a Tri-Delt…even she can see a pattern.

Inflation is a near certainty and investors and nations cannot grab the yellow metal that acts as a hedge fast enough. The only true hedge against inflation, and the only currency that will have real value when we’re buying loaves of bread in Amerika with a wheelbarrow full of dollars like Weimar Germany.

We’ve gone from being one of the world’s super powers under Reagan to a Banana Republic under Obama. Who needs Congress and the Supreme Court. I won. Now deal with it. Those were his words…not mine.

Our nation’s new flag says Tread on me…but you’ll have to take a number!

Syria, Russia and China told Obama to pack sand at the G-20 summit over the slaughter of Syrians wanting to get rid of Assad. But Putin, being the former KGB agent that he is, recognizes that we’re done. It’s over for the U.S. We have to bum a ride into space now from the Russians or the Chinese. A nation that once captivated the world based on John F. Kennedy’s charge to put a man on the moon has been replaced by space shuttles in museums and talk of yesterday. The end of American exceptionalism. Well done Mr. President.

In November this nation faces a choice between a community organizer who promised ‘hope’ and ‘change’ – not exactly sure what the measurements of success are around those 2 terms – and a man who successfully ran Bain Capital. The market will see an Obama election as a negative (‘give me more time, another term, and I can really destroy the economy and make everyone dependent on me’) and a Romney election as a positive.

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Today’s poor manufacturing and jobs reports have only added to my belief that no matter how long the Fed keeps the printing presses on high, those who truly need help will never see it.

Volatility is near record lows. With all the bad news on the horizon – from a certain attack on Iran by Israel to the collapse of the Eurozone to our own Greece and Spain (CA and IL) – now is the time to get long volatility. In a big way. You don’t buy hurricane insurance in FL when there’s a tropical depression over the Bahamas. It’s too late. The time to stock up on vol is now.

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This is a tailspin that we will not recover from unless drastic action is taken and taken immediately. Not the kind of action that the village idiot Paul Krugman suggests – the government must spend more right now to avoid an even worse fate – but serious action to reduce government spending and to encourage the public sector to once again lead our economy. The Supremes might give us a good start when they strike down the blatantly unconstitutional health care reform act…or whatever dumb name they came up with. Certainly not Operation Noble Eagle or Enduring Freedom. More like Operation Indentured Servitude.

President Obama’s non-Freudian Freudian slip 2 weeks ago that the ‘private sector is doing just fine’ and it’s the ‘public sector that is hurting’ shows you the mindset of this administration. He believes the only thing that will pull us out of this mess is the government and government spending. Forgive me Mr. President but I intend to leave my children with a nation better and stronger than I lived in with as little debt as possible and a brighter future for America. That of course currently has no chance of happening.

That’s the old United States where the private sector moved the economy, not the government. But today the president can take over a company, fire the CEO, and tell the bond holders to suck it (GM). We’re a country where the government awards hundreds of millions of dollars to ‘Green’ companies (can someone hook me up with an exact definition of what that means?) that are financial supporters of the president, who then go bankrupt.

I honestly weep for America.

15 years of service and burying 11 close friends seems like an absolute waste of my time and a waste of some good men and women to arrive at where we are – a country dependent on the government, generations of welfare recipients, people who want something for nothing, who engage in class warfare, and treat small businesses like they’re a nice to have.

I weep for America. A once great nation.

It’s sad to say, but I really don’t care anymore - I plan to profit like you read about however on the stupidity of others. That’s the New Amerikan Way.