Trump's 140 characters on F-35 wipes $2bn off Lockheed Martin The power of the president elect to shake things up was amply demonstrated on Monday morning – when a single tweet knocked more than $2bn off the valuation of Lockheed Martin, the maker of the F‑35 fighter jet. "The F‑35 program and cost is out of control. Billions of dollars can and will be saved on military (and other) …
No, US politicians have perfected the art of making shit cost 3x what it should by divvying up the work into such small pieces so there is some of it in every single one of America's 435 congressional districts, thereby insuring that it becomes 'must pass' legislation, lest a congressman's opponent be able to run against him by saying "he voted against this bill and that's why 2000 people at this defense contractor's facility the next town over got laid off last year!"
The avionics for the F35's boondoggle helmet as well as some of the systems in the plane itself were designed less than an hour from where I live...which is nowhere near California or Washington DC, I can assure you!
This post has been deleted by its author
<quote>Someone needs to sit the Aberdeenshire business owner down and explain to him that the F-35 (and that stupid destroyer) are not for fighting, they're for providing jobs in the right people's electorates squandering $Billions of tax revenue that could be used to improve infrastructure needs; but end up in the hands of defense contractors due to Congressional interference.</quote>
There!!!
FTFY!!!
Remember your history boys and girls; back during those dark days of World War 2, the necessity to Arm America to defend the free world against fascism was seen as a Gravy Train by companies that undertook that task. When the war ended, it would appear that a peace dividend would curtail such massive spending. Right???
But, NOOOOOOO! We had The Cold War, our escapades in Korea and VietNam, and elsewhere. We had endless sessions of poke and counterpoke with the Soviets. And $Billions were spent. Now, with the past 25 years under our 'belt', it is apparent that continual warfare in the Middle East is going to consume more of any peace dividend. The R's can't ever been seen as weak, so they are so Goddammed willing to throw more and more $$$$ at defense contractors, lest it cost them elections.
Who the fuck cares, it just TAX PAYER MONEY, anyway!!!!
"....VietNam....Korea....the Rs...." So you're another Leftie that coveniently forgot that even your fellow Lefties admit the Vietnam ramp up began under your beloved Democrat POTUS, JFK? Or that another Democrat POTUS, Truman not only approved the US involvement in the UN's defence of South Korea, but also was the principle creator of NATO. Maybe you need to do some more historical reading to straighten out some of the myths you've swallowed?
Not sure why the downvotes on this. I would add that under Johnson, the war ramped up and up and he personally micromanaged it while all the while reviewing his polling numbers on daily basis. He had a couple of opportunities to end the war and ignored them. If we go back FDR wasn't much better. Going forward, Nixon was an self-centered egotist and an alcoholic who held onto the war to get re-elected.
Dang, I upvoted Matt. Does not compute.
Yeah, and let's not forget JFK almost got WW3 going with the Cuban missile crisis. Even as the US was playing pretty much the same games with their missiles in Turkey. JFK, who was on a Senate Defense committee, campaigned in '60 on a supposed missile gap (to the detriment of the US) while the opposite was true. Which, given his committee he was perfectly aware of.
Too bad he got shot, his death gives his crappy policies a shine they don't deserve.
The only peace dividend happened under Clinton after the Cold War ended. Republicans whined that he was weakening US defense and they continued to play that tired old line under Obama - despite the fact that the US spends more on defense than the next 7 or 10 (whatever the number is today) countries combined. Trump campaigned on a promise to rebuild our military that he claimed Obama had "gutted" so that means more pork for his fat cat campaign contributors he's been appointing to his administration.
You don't fight ISIS with F-35s and destroyers, but that doesn't matter - to military contractors the answer to every problem from the next Hitler to terrorists wielding IEDs to kids egging your house on Halloween is major weapons programs with costs measured in billions, or ideally, trillions.
I read the story on this site, about Uber. They operate at a loss, despite being worth $60??
Twitter, we often hear, is not in profit and has been struggling for a while.
Facebook bought Whatsapp for $17 billion (or something like that).
Now, one tweet can drop a company's price by $2 billion?? And not a company that is likely to disappear or become unprofitable anytime soon.
Nevermind the causation vs correlation... my main take away here is that its all completely bonkers monopoly money that only exists on paper.
All the money for the planes is likely getting spent on something tangible (even if that is bonuses for employees), the other figures are just banking numbers on a piece of paper swayed by markets and opinion.
More and more i think economics has little connection with mathematics.
There are plenty of reasons to lose 3% of your value if...
- the product at hand is about as useful as a rasher of bacon at a bar mitzvah*, but happily contributes 20% of your revenue. Before it reaches volume sales. Nice.
- the tweeter has a large influence on purchasing decisions for said product at your biggest customer.
- other customers have privately had doubts, but have been told to toe the party line by the lead customer.
I don't think scuttling the F35 will make up for all the mess The Donald is likely to make. But doing so would be a small start.
My actual expectation that it will either be cancelled or seriously rationalized? Very limited.
* I wonder if the Israelis are paying full price for those F35s. Or if they got them, wanted or not, as part of the yearly US military aid packages. Israel is usually rather clever about their weapon procurement - they can't afford BS near as much as everyone else on their military budget. For example, workable (cheap) UAV combat drones were an Israeli innovation.
I wonder if the Israelis are paying full price for those F35s. Or if they got them, wanted or not, as part of the yearly US military aid packages. Israel is usually rather clever about their weapon procurement - they can't afford BS near as much as everyone else on their military budget. For example, workable (cheap) UAV combat drones were an Israeli innovation.
The Israelis certainly got a better deal for servicing the F35 than the UK did.
Putting American materiel into Israeli hands is the next best thing, for the US, to placing its own airbase in the region. In fact probably better : there is every chance the Israeli IT community will fix at least the software problems before the US. Most likely the hardware too : Israeli air aces are a rare and expensive commodity.
they don't need much maintenance if they're only wheeled out of the hanger and carefully flown around the block once a week.
Actually, that's quite wrong.
Figher aircraft need an amount of maintenance even if you don't switch the electrics on; starting engines increases the amount you require, running at full power (e.g.for takeoff) increase it yet again, ...
During the last year of its displays, the Vulcan ran at a continuous, high power setting. This greatly shortened the lifetime of the airframe, but reduced the wear on the engines. They had plenty of life in the airframe, but the engines were running out[1].
Aircraft maintenance regimes can be complicated.
Vic.
[1] According to the manufacturer's original schedule, anyway. The XH558 team were generally considered to be the worldwide experts on that machinery by the end of its life, and they were of the opinion that the engines they had were barely run in. But without RR's support, the aircraft was not permitted to fly - and although RR did the best job they could, they simply didn't have the expertise or the data to keep those engines running.
Have a read of this
https://en.wikipedia.org/wiki/Marlboro_Friday
Been working all night and that description is very short, pretty sure I remember some people made (Aligned with Phillip Morris) a killing on the stock price drop and recovery though, but CBA to find the details at the moment. There was a program about it a few years back.
It's the stock market valuation of a company having little relation to it's actual assets, normally seen in the case of Facebook.
In accounting the difference between what the assets of the company actually add up to (quite a lot in the case of LM or Boeing, not that much for Facebook) and what the total share capital would cost to buy is called (no trace of irony here) "goodwill."
What we get in our dribs and drabs of news is really just some noticeable burps from whence we try to ascertain "meaning".
Perhaps there are some other components that influence the orange-u-thing and the MIPC (the original name: Military Industrial Political Complex.)
If we stop trying to say that Alice caused Bob to do something, but rather looked at another actor that is influencing both, and that actor does everything it can to remain hidden, then we need to delve more deeply.
Causation can lead to correlation. You just need to understand that pesky arrow of time and effect.
Instead of the tweet dropping the stock price, maybe the drop in stock price triggered the tweet?
"Oh crap! The shit's about to hit the fan at Lockheed, and we need a cover to bail out! Trump, help a body out?"
>Trump tweets< Your plane are crap and should be scrapped! (Very loosely paraphrased)
"There, That outta throw SEC off the scent! Keep selling!"
They say that every dollar spent on NASA generates 18 in the economy. I'm guessing a similar multiplier for defence spending in the US. Money doesnt just disappear* it flows around the system and is used many many times. The US are fully aware of this and I'd bet the stock market in the US will take a noticeable hit if Trump is not talked out of 'saving' taxpayers money.
*the UK seems to be able to make money disappear into bank black holes or offshore though.
They say that every dollar spent on NASA generates 18 in the economy. I'm guessing a similar multiplier for defence spending in the US
if you believe that nonsense (that simply spending borrowed money creates wealth), then the $400bn spent to date on F35 has generated over $7 trillion in wider wealth. If we posit that most of that money was spent in the past five years, then about 10% of gross US GDP is attributable to a programme that's produced token numbers of such a high quality product it couldn't even be delivered on time because of the weather, and whose underlying design concept was Russian.
That's the problem with these misunderstood views of the multiplier effect - it does certainly exist, but it is (a) often overstated by people wanting to hose money all over their pet cause, and (b) it doesn't work in economic terms if the original investment is on something without real economic value. That of course is why Japan's had two decades of no growth, despite throwing huge amounts at infrastructure projects, showing that it isn't just space or defence programmes that can burn money.
At the heart of this is the misunderstood idea of Keynes around stimulus. Keynes simply suggested that government could even out booms and busts by selective increases and decreases in public spending, and it was a reasonable idea. Sadly today's politicians didn't understand that Keynes was starting from an assumption that governments would in fact balance the books over time, and they've proven in most developed economies that every year they will spend more than they raise in taxes, and never pay down the debt, or balance their budget. That's akin to using your credit card every day for two decades, but never making anything other than the minimum payment. In the case of Japan, they got to the stage that the credit card company said "no", so the answer was (in effect) to make their own credit card, issuing themselves a higher credit limit every time they maxed out.
The Trump gets a bad press, and some if it is deserved. On the other hand at least he's spotted some of the big challenges that previous presidents have refused to even acknowledge exist. If he cuts back on the F35 and US hobby wars, but them spends the same amount on make work infrastructure programmes then economically the US will still be in a pickle - although arguably at there's a benefit that it won't be dropping bombs on foreigners.
" I'm guessing a similar multiplier for defence spending in the US "
You'd be guessing wrong.
NASA is subject to so many levels of oversight that the money is traceable.
the US military isn't and the vast majority of spend disappears into only a few pockets.
"the weapons system that bankrupts the American Empire."
maybe that's what Trump is thinking... an overpriced "cool, shiny" weapons platform that has too many impracticalities.
WW2 was won with 'leser capable' aircraft, etc. by the Allies in the face of "superior" equipment on both sides. The Zero was faster than U.S. planes [they could only catch one by diving] until late in the war, and Germany had practical jet fighters. Yet the Allies won, in many ways through NUMBERS, not technical prowess.
Translate that into more modern terms, Reagan pulled WW2 battleships out of mothballs and 'modernized' them for a fraction of the cost of new ships. And here is a nice photo of one of them through a periscope...
In any case, the principle here is that "it can be done for less" and Trump is apparently heading in that same direction that Reagan so successfully went back in the 80's.
".....WW2 was won with 'leser capable' aircraft, etc. by the Allies in the face of "superior" equipment on both sides....." Up vote for most of the comment, but that bit needs a bit of a reality check. As an example, the Spitfire was a better interceptor and dogfighter than the Axis fighters for most of the War. True, the Mk V was kept in the frontline too long, but it was superior to the Zero in every way except a low speed climb (with the correct tactics, even the pretty awful P-40 Tomahawk could dominate the Japanese fighters, as shown by the Flying Tigers). The arrival in numbers of the Spitfire Mk IX (and the tropicalised Mk VIII) in 1942-43 on all fronts pretty much guaranteed local battlefield air superiority for the Allies, further bolstered by the P-47 and P-51 adding the longer range to achieve air superiority far into enemy territory. By 1944, the Allies were winning due to both a quantitative and qualitative edge, both in aircraft and pilot training.
"....Germany had practical jet fighters....." No, they had designs that would have failed Allied standards for employment, and were only used because the Germans were desperate. The Me262's axial jet engines, for example, were notoriously fragile, much more so than the "less advanced" but more calmly developed centrifugal jets of the Meteor. With slower and more steady development, the post-War versions of the Meteor had far superior performance to the best Axis jet, the Me262, and were far more reliable. Allied research in many areas during the War, especially into supersonic flight, was actually more advanced than that of the Germans. Other so-called German "technological triumphs", such as the Me163 rocket fighters and the He162 jet, we're so dangerous they actually killed more German pilots than Allied aircrew!
"No, they had designs that would have failed Allied standards for employment, and were only used because the Germans were desperate."
A large chunk of the reason that the germans lost was that they spent huge amounts of time and effort turning out highly advanced (but buggy) designs that ended up being trounced by their fuel consumption(*) or sheer superior numbers of inferior weapons(**). The desperation part only kicked in in the latter stages of the war.
Japan's war effort was doomed from the moment its fuel supplies were cut off, the fact that they kept fighting after that was sheer bloodymindedness on the leadership's part (same for the final days in Germany)
Napolean is attributed as saying "Never interrupt your enemy when he is making a mistake" - and most countries unfriendly to the USA are more than happy to let them keep making mistakes with the F35.
(*)Tiger tanks - it was easy to disable them by targetting their fuel supply. From that point you could simply stay out of range and arrange for them to be picked off when attackers were ready.
(**) Shermans might have been tommycookers, but for every one the germans destroyed with their superior Panzers there were 3 more behind it firing back. Ditto on the soviet T34s.
".....Tiger tanks - it was easy to disable them by targetting their fuel supply....." The Tiger was the perfect example of an attempt to ensure dominance through making a vast and unproven leap in technology. The result was massively unreliable in the few advancing campaigns it participated in (such as Kursk, where the majority of Tigers broke down before even reaching the start lines), gaining its reputation in the predominantly defensive operations the Germans were forced into after 1942. Throughout 1944-45, more Tigers were abandoned and lost due to mechanical problems than lack of fuel. However, the fuel point raised is still valid as the Tiger used twice as much as even the "good enough" long-75mm-armed PzIVs. Indeed, the Tiger took more than twice as long to build and used up almost twice the resources as the arguably more effective PzIV.
".....The desperation part only kicked in in the latter stages of the war....." No. When Hitler committed Germany to war in 1939, his generals and most of his economic staff had already twigged that Germany did not have the economic and production resources, especially for high-quality steel and refined oil, to pursue a long war. Hitler's Chief of Staff, Ludwig Beck, opposed the annexation of Czecheslovakia in 1938 because he was one of the Nazis to realise that Germany couldn't win a war with France and Britain without significant changes to supply and production. The Germans had already absorbed the lessons of WW1, where Germany and her partners had been unable to compete economically with the Allies (as an example of this, Germany was so short of high-quality steel by 1916 that the Germans were forced to recycle the engines from crashed Allied aircraft, the engine in one of Manfred von Richtifen's scouts being a recycled French unit). In the 30s this led the Nazis to a policy of "dominance though superior technology" - Germany would beat her enemies by making such giant leaps in science and technology that they would maintain a qualitative edge for the duration of the expected short war (staring in mid-1940 at the earliest, and preferably not until 1942, and lasting only six months), yet require the production of fewer actual weapons. This strategy dictated that a "supertank" would use less resources and defeat ten or more ordinary tanks expected to be produced by the more economically-affluent Allies or Russians over the timeframe of a short war. This chimed neatly with the Nazi ideal of Aryan superiority (and why the T-34 was such a shock to those ideas of racial superiority). Thus, schemes which promised quick rewards (such as the Tiger "supertank") were encouraged, whilst those requiring slow and steady development (such as the Heinkel 280, the actual first jet fighter) were ignored or ordered to stop. When the actual War went on longer than the few months expected, and the programs didn't provide the war-winning superweapons expected, the desperation set in very early on (in cases as early as November 1940, when it became clear Germany could not invade Britain and bring the War to a quick conclusion). Fortunately for the Allies, the Nazis had instilled such a focus on the "dominance through superior technology" mantra, and with resources getting ever fewer, the Germans simply pushed even further into unproven technologies (and ridiculous "supersupertank" projects like the Maus tank), producing designs that consumed even more resources for less returns than their Allied counterparts. Last ditch attempts to rationalise development and production programs eventually churned out masses of ordinary weapons which were actually technologically-inferior to the best Allied designs (such as the Bf109K compared to the P-51D or Tempest V), but failed because the Germans didn't meet easily anticipated shortfalls in other areas (aero fuels and pilot training in the case of the Bf109K).
".....Shermans might have been tommycookers....." The Sherman tank was actually arguably the best all-round tank when introduced to combat in 1942. It had good enough armour, a good gun that also fired a good HE shell, was manoeuvrable and fast enough, was quick to build in numbers, and was easy to train on, service and reliable in use. The problem was the Yanks didn't understand the irrational "dominance through superior technology" mantra pushing the Nazi scientists and engineers, and thought the Sherman was such a technological leap whilst still being reliable that they could not see anyone producing a better all-round tank by the expected end of the War (which the Yanks predicted in 1941 as ending by Christmas 1943!). Therefore the Yanks virtually stopped development of a real heavy tank, and were later surprised by the appearance of the heavier (but much less reliable) Tiger and Panther. Even so, the majority of Shermans knocked out in 1944 and 1945 were attacked by German infantry using cheap recoiless weapons (such as the Panzerscrechk, a copy of the American Bazooka technology) and not Tiger tanks (as many as 70% of all T-34s destroyed are thought to have been lost to the cheap and simple Panzerscrechk and Panzerfaust weapons).
".....Japan's war effort was doomed from the moment its fuel supplies were cut off...." The Japanese had plenty of fuel (they went to war to seize oilfields in Malaya and Java, and were still in control of them through 1945), what they lacked was the industrial capability to produce enough aircraft and pilots of good enough quality to fight the more numerous and better-armed Allies. The Japanese never did produce a tank to match even the Sherman, but they did produce some excellent fighters (such as the Ki-84 and the chop-shop Ki100). Their problem was producing those fighters in numbers and training enough pilots to the level of their Allied opponents, both of which proved impossible. As an added problem, no-one had predicted and prepared Japan for bombing by B-29s, and so what industry they did have was not dispersed and was poorly protected. The Japanese also tried to make technological leaps so they could produce "superweapons" to defeat the larger numbers of superior Allied planes, but these projects were even less successful than those of the Germans.
The Bhagwan seems to have done that EFL thing of not quite getting that the phrase is actually a joke and getting a key word wrong
Said of a blunt talker
"He calls a spade a fucking shovel"
My favourite was always
"You think I know damn nothing - well you're wrong - I know damn all"
"The Bhagwan seems to have done that EFL thing of not quite getting that the phrase is actually a joke and getting a key word wrong"
It isn't a joke and he hasn't got a word wrong. YPC.
It's about blunt (/unimaginative /rude /honest, select as you see fit) speaking as you say but was always 'call a spade a spade' (in English at least; it's something else in the original Greek, and the French seem to prefer cats).
"Call a spade a shovel" arrives later and has a few different meanings, often tending to the opposite of the original meaning (i.e. precisely not calling a spade a spade).
"One interesting facet to the whole sorry saga is in the timing of the tweet and subsequent share price drop..."
I for one will be collecting further such correlations. It is all too easy to believe in a cabal of crooks making money off Trump Twitter proclamations.
Step 1: Signal the cabal of an impending tweet.
Step 2: Sales or purchases of relevant stocks commence.
Step 3: The tweet is transmitted.
Step 4: The trampling herd then responds.
The cabal smiles and says: 'It's only correlation. Nothing statistically significant is happening here. Move along. Move along'.
But collect enough correlation data points and you may reach statistical significance.
I see a problem with step 1, though. While it's probably safe to assume that there is allways an impending tweet, given how many he churns out, he seems to be quite spontaneous as to what the next tweet will be about.
The people who work in the stock exchange soon recognise "strange" dealings. After all, it is money that is not going their way. Unless they are in on the racket, of course.
They're like bookies. No matter what happens to the market, they make money. If weren't for the SEC keeping an eye on things, the market would wilder and more manipulated than it is.
About cabals...
Occam's razor: persons close to Trump's group, (or to the government in general) knew of this being discussed, and most importantly knew about "when" the decision was going to be made public.
Now proving inside trading it is another matter altogether.
"......Occam's razor: persons close to Trump's group, (or to the government in general) knew of this being discussed, and most importantly knew about "when" the decision was going to be made public......" Or, much simpler - jittery market analysts saw Trumpet slate Boeing on the new Air Force One contract, heard his promise to stop waste in military spending, and jumped on that as a reason to advise against Lockheed as the F-35 program is always being painted as a massive cost by the MSM. Trumpet's tweet was then probably (a) a coincidence, but he will love the idea his pronouncements sway the markets, or (b) his team spotted the dip in Lockheed's share price and quickly threw out the tweet so they could claim Trumpet could sway the market with one tweet.
Amusingly, it's hard for the haters to complain because they are usually the anti-military types that have been shrieking about the F-35 program, and it also plays to his supporters by saying he is "draining the swamp" by taking aim at Lockheed. El Reg's coverage - "we don't want to agree with Trump, but we kinda agree with Trump, so let's look for another angle (insider trading) where we can report this, but still slate Trump" - just shows how The Orange One plays even the non-mainstream (but equally anti-Trump) media like a well-tuned banjo!
The Register 
Biting the hand that feeds IT
Copyright. All rights reserved © 1998–2024
