"“We have lent a huge amount of money to the U.S. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried.” "

Chinese premier Wen Jiabao 12th March 2009

""We have a financial system that is run by private shareholders, managed by private institutions, and we'd like to do our best to preserve that system."

Timothy Geithner US Secretary of the Treasury, previously President of the Federal Reserve Bank of New York.1/3/2009

Thursday, September 27, 2007

War is good for the US Mil / Industrial complex - and it's shareholders

The AMEX Defence Index is composed of the following companies and this table shows who they are and their current relative weighting :
This is the 12 month chart to close of business last night (click to enlarge)

Defence Secretary Robert Gates, has an additional US$42 billion in funding from Congress to cover expenditures in Iraq and Afghanistan. This includes US$11 billion to buy another 7,000 mine-resistant, ambush-protected vehicles (MRAP AKA 28 ton armoured Mack truck buses - see previous posts) on top of the 8,000 vehicles already on order, and US$9 billion to provide new equipment and technology. .. It also means that this brings the total funding to about US$190 billion compared with the $165 billion approved by Congress for 2007.

The massive US$20 billion Middle East arms package peddled by the Bush administration to Saudi, Gulf States and ...er... Israel also adds to the defence industries bonanza. Exports are broadly 10 - 20 % of total sales.

The AMEX Defence Index, jumped 14.25% in afternoon trading. Since last year the index has climbed 47% while the S&P 500 has only picked up 15%.

Shares of Lockheed Martin (LMT) rose 76 cents to close at $105.72. The stock is nearing its all-time high of $107.33, established in July.

General Dynamics Corp. (GD) stock added 7 cents to $84.37

Shares of Raytheon (RTN) also collected 75 cents yesterday, closing at $64.47.

It is not only the well known majopr contractors who have seen a massive doubling of their share price in 12 months . FLIR systems (mkt Cap US$3.7BN.) are major suppliers of infra red / thermographic sensing.

Only last week they announced a $28.6 million order from the United Arab Emirates (UAE) for its Star SAFIRE® III stabilized, multi-sensor systems. The units delivered under this order will be used for homeland security and high-value asset protection missions.

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