(RightWing.org) – George Orwell presented the concept that “war is peace” in his dystopian novel “Nineteen Eighty-Four.” The story takes place at a time when the world suffers from a state of near-perpetual war, but thanks to his stated paradox — Wall Street profits from conflict. Recent reports confirm that’s exactly what is happening right now — thanks to Hamas.
Defense companies have long been the big winners when war breaks out; these days, it doesn’t matter where. For instance, news agencies recently reported that major US companies producing weapons of war, like Northrop Grumman, General Dynamics, Lockheed Martin, Raytheon, and Boeing, experienced a 7% surge in the stock market by mid-October.
On October 30, The Guardian published an in-depth report discussing the defense industry’s approach to the introduction of yet another war. According to the British agency, Toronto-Dominion (TD) and Morgan Stanley analysts recently discussed the financial benefits of the expanding war between Israel and Hamas during their respective earnings calls with investors.
TD Bank’s senior research analyst and managing director for the aerospace industry, Cai von Rumohr, reportedly discussed the financial upside for General Dynamics due to the outbreak of that conflict. TD’s asset management division has about $16 million invested in the defense contractor. According to The Guardian, the death of thousands of Israelis and Palestinians “wasn’t top of mind” for von Rumohr.
Von Rumohr supposedly discussed Biden’s recent request for billions of dollars in funding for Israel and Ukraine. He questioned General Dynamics executives to discuss what kind of “incremental acceleration in demand” it expected due to the flood of American taxpayer dollars flowing into those overseas war efforts.
General Dynamics’ chief financial officer and executive technology vice president, Jason Aiken, responded by stating that the situation in Israel was “obviously… terrible.” But he quickly followed up by advising that the most significant potential increase in demand was “probably on the artillery side.” The following day, von Rumohr upgraded his General Dynamics stock recommendation for TD to “buy” status.
The Guardian reported that Morgan Stanley’s earning call had a similar tone. Kristine Liwag, the company’s head of defense and aerospace equity research, told investors the Biden administration’s supplemental funding request appeared to “fit quite nicely with Raytheon [Defense’s] portfolio.” Morgan Stanley has a roughly 2.1% stake in the defense company.
While it remains unclear how much money Congress will ultimately approve for foreign aid for Israel and Ukraine, one thing appears clear — Wall Street will see a significant share of it.
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