Buy and Sell Signals, and Other Market Perspectives Message Board

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Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives

SPY 683.00

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Nov 11 4:00 PM EST

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To: NOW who wrote (40828)	11/27/2012 1:08:50 PM
From: penthouse mike	1 Recommendation Read Replies (1) of 218679

It is very tricky to cut defense spending to save money because most defense contracts are long term with significant early termination penalties which are being ramped up now. Big defense projects in danger of being cut are loading up big penalty clauses to deter their program from being cut. If the programs get cut then the government employees could be cut, so the government employees are saving their own jobs by putting these big penalty clauses into their contracts. Given this gaming of the system, automatic defense cuts may cost more money in penalty fees than the money being cut.

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