Defense
Will Egypt End the "Obama Arms Bazaar?"
While many investors are focused on the roles that Google Inc. (Nasdaq: GOOG) and Twitter played during Egypt's recent turmoil, I immediately zeroed in on all the American-made military hardware that exists in that region – and began to analyze the risk that investors face if the U.S. defense industry quite literally bet on the wrong horse.
Between 2006 and 2009, we sold more than $50 billion worth of weapons systems and related hardware to Middle East nations, according to the Congressional Research Service. The value of annual military contracts in the region has quadrupled since 2000, according to CNN.com.
And it doesn't look like things are slowing down – at least, not yet.
Defense Suppliers Compete for a Piece of India’s Multibillion-Dollar Military Revamp
The Boeing Co. (NYSE: BA) is in talks with India for a $5.8 billion military aircraft deal as the country triples its defense budget, leading defense suppliers to compete for a piece of the multibillion-dollar action.
India is negotiating with Boeing over the purchase of 10 C-17 Globemaster III aircraft, which would be the largest defense order from India for Boeing, the second-largest U.S. defense contractor. India's Finance Minister Pranab Mukherjee said in February the government would spend $33 billion on defense in the fiscal year starting April 1.
The Asian country's "defense procurement budget is quite huge," Laxman Kumar Behera, a research fellow at the Institute for Defense Studies and Analyses in New Delhi, told Bloomberg. "The U.S. arms industry has become quite interested in the Indian defense market."
Boeing expects to bid for as much as $31 billion of military contracts in the next 10 years as India looks to replace aging Russian-made equipment.
Obama's Budget Adds $1 Trillion in Taxes, Balloons Federal Deficit
President Barack Obama yesterday (Monday) unveiled a $3.8 trillion budget proposal that includes big tax increases on individuals and businesses, and expands the federal deficit by more than $5.5 trillion by the end of the decade, including a record $1.6 trillion next year.
The budget blueprint for the fiscal year that begins Oct. 1 reflects the administration's struggle to find a balance between containing the spiraling federal deficit with the need to boost the economy and create jobs – both of which figure to be political bombshells in the upcoming 2010 elections.
"We're trying to accomplish a soft landing in terms of our fiscal trajectory," Peter Orszag, director of the White House Office of Management and Budget, said at a press briefing.
But the budget is certain to add fuel to the debate over the size and scope of government. As expected, Republicans railed against the administration's big spending programs and tax increases.
Boeing Refurbishes 500th Super Hornet Fighter Jet, Makes Plans for Looming Dubai Air Show
By William Patalon III Managing Editor Money Morning The Boeing Co. (BA) announced that it's delivered its 500th modified F/A-18 Super Hornet jet fighter-bomber to the U.S. Navy from the company's Aerospace Support Center at Cecil Commerce Center, located near Jacksonville, Fla. Boeing also detailed its plans for the upcoming Dubai Air Show, which opens [...]
U.N. Awards Defense Firm Lockheed Martin $250 Million Contract in Darfur
From Staff Reports The United Nations awarded defense contractor Lockheed Martin Corp. (LMT) a $250 million contract to build five new camps in Sudan's civil-war-ravaged Darfur region, and in the neighboring Kordofan regions for 4,100 U.N. and African Union personnel, The Associated Press reported yesterday (Tuesday). Specifically, the six-month contract was awarded to California-based Pacific [...]
Aluminum Giant Alcoa Awarded Major Parts Contract for New Stealth Jet
By William Patalon III Managing Editor Money Morning/The Money Map Report Defense contractor Lockheed Martin Corp., (LMT) has awarded aluminum giant Alcoa Inc.(AA) a $360 million contract to supply special castings for the special new stealth fighter jet known as the ‘Joint Strike Fighter.' The U.S. military will use the Lockheed Martin F-35 Lightning II [...]
U.S. Officials Question Whether 3Com Deal Gives Defense Secrets To China
From Staff Reports China's No. 1 network-equipment maker – a firm alleged to have ties to Beijing's military, as well as past links to Saddam Hussein and the Taliban in Afghanistan – could gain access to U.S. defense-network technology in the proposed buyout of 3Com Corp. (COMS), the Washington Times newspaper reported yesterday (Wednesday). 3Com [...]
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