Wall Street Loves A War & An AI Executive Order
October 31, 2023
Big Money, Big Bombs, Big Fun
The death toll in the Israel-Hamas war is approaching 10,000 across both sides of the conflict, and Israeli Prime Minister Benjamin Netanyahu has firmly rejected calls for a ceasefire. The U.N. has accused both Hamas and the IDF of committing war crimes, while American investors are taking the war as an opportunity to “earn” a quick buck, investing in the defense contractors supplying the U.S. and its allies with missiles.
“Hamas has created additional demand, we have this $106bn request from the president,” noted one investment banking research analyst during a General Dynamics earnings call last week, “Can you give us some general color in terms of areas where you think you could see incremental acceleration in demand?” General Dynamics is the third-biggest defense contractor in the U.S., taking in $21.93 billion in federal contracts last year.
“You know, the Israel situation obviously is a terrible one, frankly, and one that’s just evolving as we speak,” responded the company’s executive vice-president of technologies and CFO. “But I think if you look at the incremental demand potential coming out of that, the biggest one to highlight and that really sticks out is probably on the artillery side.” The day after the call, the analyst recommended that investors buy General Dynamics stock.
When asked about the Pentagon supplying missiles to both Ukraine and Israel, Raytheon’s chairman and executive director said, “I think really across the entire Raytheon portfolio, you’re going to see a benefit of this restocking … on top of what we think is going to be an increase in the [Department of Defense] top line [budget].”
While U.N. guidelines state that banks and investors are obligated to ensure that their spending doesn’t contribute to human rights violations, the truth is that it’s impossible to block financial firms from funding war crimes. The issue of investors profiting off of mass death won’t be solved unless the U.S. government makes a big change – the White House would essentially need to declare that Israel is committing war crimes under U.S. law, and we don’t see that happening any time soon.
Some Good News
- Home countries of major rainforests agree to work together to save them (Reuters)
- Taylor Swift breaks her own Spotify record (CNN)
The Pentagon’s New Recruitment Scheme
- In August, Japan began releasing over a million tons of treated radioactive water from its Fukushima nuclear power plant into the Pacific Ocean. Despite assurances by the International Atomic Energy Agency that the water was safe, citizens of Korea and China (kind of understandably) panicked. Korea’s government, a close ally of both the U.S. and Japan, did its best to convince its people that seafood would not be affected by the release. China, on the other hand, set up an import ban on Japanese seafood.
- To offset the effects of that import ban, the U.S. military is buying up Japanese seafood in bulk. “The best way we have proven in all the instances to kind of wear out China’s economic coercion is come to the aid and assistance of the targeted country or industry,” said U.S. ambassador to Japan Rahm Emanuel.
- China used to be the biggest importer of Japanese seafood in the world. If the Pentagon hopes to fill the void left behind by the Chinese market, the U.S. military will have its delicious work cut out for it. The program has already taken effect, with the first purchase being a metric ton of scallops. For perspective, China imported 100,000 tons of scallops from Japan last year.
Aussie Aussie Aussie, No No No
- After a weekend of talks in Osaka, Japan, Australia has decided to reject a fair trade deal with the European Union. The talks, which involved trade ministers from G7 countries, were the culmination of trade discussions between the E.U. and Australia that have been going on since 2018.
- The deal apparently fell through because the terms weren’t favorable enough for Australian farmers. The agreement would have removed E.U. tariffs on Australian goods and expanded import quotas for Australian products, while also allowing the E.U. more access to the country’s mineral wealth. However, Australia said the deal offered in Osaka would put its farmers at a disadvantage to competitors in New Zealand and countries across the Americas.
Additional World News
- As economy falters, more Chinese migrants seek asylum at US border (ABC)
- Hundreds stormed an airport in Russia’s Dagestan, looking for passengers from Israel (NPR)
- Suspect detained in an explosion that killed 3 at Jehovah’s Witness event in India (ABC)
- A passenger train slams into another in southern India, killing 13 people (NPR)
- Graphic pro-Israel ads make their way into children’s video games (Reuters)
- Georgians fear influx of migrants from Russia after Ukraine invasion (CBS)
- Bangladesh’s ruling party holds rally to denounce ‘violent opposition protests’ ahead of elections (WaPo, $)
“It is greed to do all the talking but not to want to listen at all.” – Democritus
No Don In Denver?
- Yesterday began a case in Colorado that will see lawyers representing a group of voters arguing that the 14th Amendment should prevent former President Trump from appearing on the ballot in the state. On Thursday, the Minnesota Supreme Court will hear oral arguments in a similar case, and either or both of the cases are expected to reach the Supreme Court.
- Attorney Eric Olson focused largely on Trump’s rhetoric leading up to the January 6th riot, saying the former president “summoned and organized the mob.” According to the 14th Amendment, you cannot hold office if you’ve “engaged in insurrection” against the Constitution. Lawyers are first focusing on what happened leading up to the attack, and will then determine if it constituted an insurrection.
A Conflict Without Borders
- The Israel/Hamas war has made its way to the U.S., and specifically to college campuses. Cornell saw antisemitic “threats of violence” on a message board this past weekend.
- Law enforcement was notified and campus police referred the case to the FBI as a potential hate crime. New York Gov. Kathy Hochul said that she condemned the “disgusting & hateful posts,” adding that it wasn’t clear if the threats were credible.
Additional USA Reads
- Democrats launch write-in campaign for Biden in N.H. (Politico)
- Judge reimposes gag order on Trump in federal election interference case (NPR)
- Trump holds lead in Iowa poll while Haley ties DeSantis for second (Politico)
- Federal trial of ex-officer in Breonna Taylor case begins (BBC)
- Poll shows Delaware voters favor historic firsts for statewide races (Politico)
- Outraised and embattled, Lauren Boebert heads back to Colorado with a revamped campaign strategy (AP)
- US communicating with Israel at ‘the highest levels’ about protecting Gaza civilians but quiet on expanding war (CNN)
What’s The Opposite Of Executive Dysfunction?
- On Monday, the White House rolled out an executive order aimed at reeling in artificial intelligence. While “an executive order” might sound like a focused directive on the subject, the move was more of a shotgun blast – the text of the order covers topics from AI-driven biological synthesis to cybersecurity to algorithmic discrimination. The main takeaway from the order is the Biden administration’s willingness to take quick action on AI, though the White House has made it clear that Congress will need to also act on the issue.
- Here are a few key points from the executive order. First, it beefs up AI security standards by making big AI companies report certain safety test results to the federal government. Next, it implements a few different guardrails on the technology’s human applications, regulating the use of algorithms by landlords, healthcare providers, and the justice system. It also calls for the federal government to quickly hire AI experts – if you’re looking for a job, you can head to ai.gov to apply.
Additional Reads
- Flavor Flav delivers viral national anthem performance at Bucks-Hawks game (NBC)
- Día de los Muertos is a colorful tradition to remember loved ones. Here’s what it means. (NBC)
- Tarantula causes vehicle crash in California’s Death Valley (BBC)
- Poland’s boogeyman, Bebok, is reimagined through a photographer’s collaboration with local teenagers (NPR)
- Thanks, Neanderthals: How our ancient relatives could help find new antibiotics (NPR)
- Robert De Niro Faces Off Against Ex-Assistant In Discrimination Trial (Hollywood Reporter)
- Generative AI Is Playing a Surprising Role in Israel-Hamas Disinformation (Wired)