Ukraine crisis: Foreign military contractors are rubbing their hands

8:05, 06 марта 2022

МОСКВА, 06 марта 2022, Институт РУССТРАТ.

Any military conflict can be turned into profit. In what way? The standard one. Prices are creeping and someone is immediately profiting.

As an example: «Israeli arms maker Elbit Systems sees share prices soar after Russian invasion of Ukraine.» Elbit Systems is the largest Israeli private arms company. It specialises in the development and modernisation of various types of weapons. It is considered the world’s leading company for the production of unmanned aerial vehicles (UAVs). Its Hermes UAVs have already «distinguished themselves» during the military operation to coerce Georgia to peace in 2008. It also develops laser and rocket technologies. 

What can be said about this topic? Without exception, all foreign companies that produce weapons and provide military services simply dream of having as many armed conflicts as possible. They will make money from it. They don’t give a damn that people will die as a result, houses will collapse and chaos will grow. The main thing is that this happens away from their habitats, bank cells and production facilities. Money will warm their soul and will not have a smell of blood. No unpleasant impressions. Business only.

This concerns especially the Ukrainian crisis. In mid-February, the RUSSTRAT Institute drew attention to the strange metamorphoses occurring with the articles of respectable publications. The article published in Politico, «This got bungled: Biden’s two tragic Afghanistan missteps» describing the perniciousness of leaving Afghanistan, which became the finale of the longest war in US history, had the mark of the advertising material «Presented by Lockheed Martin”. The oil company ExxonMobile was also noted among the sponsors of the «military» agenda.

Everything was done in order to enlist the support of the Pentagon for big business in conditions of low defence budgets. The higher the level of militaristic hysteria, the more in demand are the products of American arms concerns. However, not only American, large arms corporations have long become transnational. In connection with Ukraine, there were «warnings»: if you do not give it as many weapons as possible, then «Biden’s presidency will certainly be limited to one term.»

Let’s look at the five largest American arms manufacturers whose shares are traded on the New York Stock Exchange (NYSE): Lockheed Martin Corporation (stock ticker LMT); Boeing Company (BA); General Electric Company (GE); Raytheon Technologies Corporation (RTX) and Northrop Grumman Corporation (NOC). The total capitalisation of the companies is estimated to be about $500 billion. This is not prohibitively much, but also a lot. Such money cannot fail to work.

How to make this capital make a profit? There are several ways. One can increase the output and sell more, make some improvements and sell the final product at exorbitant prices. It is possible to «inflate» the interest of market participants, thereby raising the stock price. How to organise all this? It is enough to stir up the hidden springs of fear in a large group of people. With the appropriate «right» approach, they will stop thinking rationally and plunge into the abyss of irrationality.

It’s ready, it’s possible to sell! Then one can organise a real massacre somewhere. This will help even better. One can sell again. In the course of conflicts, weapons are consumed, and their stocks need to be replenished? We are selling again! The weapon has a service life. Is it not used? So it’s aged, after all. Didn’t you notice that? Come on, and urgently restore supplies. As always, we sell. Don’t you have spare parts and maintenance specialists for complex military equipment? We will provide you with everything! Just pay.

The system works smoothly, like a Swiss watch. Are there no conflicts anywhere? No worries, now corporate advisers and consultants from among the former military and various kinds of politicians will lobby for this little question through «our» congressmen. They will outline ideas to the president, and everything will go in a straight line. We will not be stingy with money, it will be enough for everyone. And so on ad infinitum.

Let’s take Lockheed Martin as an example. If in January 2003 the corporation’s share was worth about $87, now it is worth $447. A 5.3-fold increase or 530%. Since the growth was almost linear, it comes out at about 44% per year. A very good result for business. In early December 2021, Lockheed Martin was selected by Finland to purchase 64 F-35 Lightning II fighters. On the day the agreement was reached, the share price of the corporation increased by 1%. We can say that this is not very much. But for the entire second half of 2021, the shares from June to November 2021 (continuously) fell from 380 to 330 dollars apiece.

In December 2021, they have already grown to 355, in January 2022 — to 389, and in February 2022 — to 433. In March, the growth continued (447). But there are already signs of a «slowdown». As market participants say, the candlestick has a long shadow on its top. This means that the current price goes below the maximum reached in previous trading sessions. That is, buyers do not want to take shares at the price offered earlier, and consider it overpriced. But the fact remains that the historical maximum of the corporation’s stock price has been reached. Such a high price has never been observed before.

What’s next? Then we have to wait for the next adventure. So, sit and guess: who is now the next candidate in line to be dragged by the ears to NATO, or where the next «pet project» like AUKUS will be created, or, which is already quite disgusting, where the next armed conflict will be unleashed.