Turkey, Russian tensions, good for defense industry

Taking down the Su-24 was an act of cowardice by Turkey especially as any bomber stands no chance against a Supersonic Jet. Not one but two F-16’s were involved. One F-16 is already too much for the Su-24 to handle, two well is overkill. And the story does not end there. Supposedly, the Su-24 was out of bombs and missiles.

The downing of the Russian rescue helicopter is surely not going to make things any better and clearly illustrates that U.S. weapons are making their way to ISIS and not moderate rebels only.

U.S.-Backed Syrian Rebels Destroy Russian Helicopter with CIA-Provided TOW Anti-Tank Missile Full Story

You can see that overall, Russia is not happy; the rather cool Lavrov minced no words when he asked John Kerry to “ Stop Being a Skirt-Wearing Woman, Accept Assad” Full Story

Putin is hopping mad

President Vladimir Putin did not mince words after he was informed of the downing of the Russian Su-24

“Today’s loss is linked to a stab in the back delivered to us by accomplices of terrorists. I cannot qualify what happened today as anything else,” said a visibly furious Putin.

“Our plane was shot down on Syrian territory by an air-to-air missile from an F-16. It fell on Syrian territory 4 kilometres from the Turkish border. It was flying at 6,000 meters 1 kilometre from Turkish territory when it was attacked.”

“We established a long time ago that large quantities of oil and oil products from territory captured by Islamic State have been arriving on Turkish territory,” he said, saying that was how militants had been funding themselves.

“And now we get stabbed in our back and our planes, which are fighting terrorism, are struck. This despite the fact that we signed an agreement with our American partners to warn each other about air-to-air incidents and Turkey … announced it was allegedly fighting against terrorism as part of the U.S. coalition.”

If Islamic State militants earned hundreds of millions of dollars from trading oil and enjoyed the protection of the armed forces “of entire governments” no wonder, said Putin, they behaved so boldly.

“We will, of course, analyse everything that happened and today’s tragic events will have serious consequences for Russo-Turkish relations,” he said.

Russia has decided enough is enough

Deploying the S-400 system to the air base in Latika, which has a range of 250 miles and this means that they can easily be used to hit targets in Turkey. Russia is now serious about protecting its planes and has stated that they will shoot down any foreign target that threatens Russian planes.

Mr Shoigu also said all future bombing missions would be accompanied by fighter escorts, and ordered the country’s most powerful missile cruiser, the Moskva, to patrol in-shore waters near the Turkish-Syrian border.

“She will be ready to destroy any aerial target posing a potential danger to our aircraft,” he said. Full Story

Arms race

Before this development, there was already an arms race, due to the support Russia was providing Syria and Iran. The Sunni Middle-East countries led by Saudi Arabia hate Shiites and at the top of this tree is Iran and Syria. Last year, Saudi Arabia, the United Arab Emirates, Algeria, Egypt, and Iraq imported $12 billion in arms, this year these same countries will spend north of 18 billion in weapons.

Who stands to benefit?

Arms manufacturers, of course, as they can supply both sides with weapons and the more, they fight, the more they make. War is what these companies hope for as their profits skyrocket during times of conflict. Just take a look at the following stocks RTN, BA, LMT, GD, AVAV and NOC are either trading at new highs or are trading close to their highs. Based on the patterns these stocks are generating, the arms race is not going to let up soon. Thus, the strategy to use would be to use pullbacks to open long positions.