Known for being a highly volatile and historic month for the markets, the stage is once again set for the month of October to be either a blockbuster or a bust. The same month that gave us Black Tuesday in 1929 and Black Monday in 1987, now has to contend with a scandal surrounding Boeing, one of the world’s largest companies. A Federal Reserve, FOMC, meeting at the end of the month, which is likely to see further easing and a further explanation as to why they’re increasing their balance sheet – yes, this is QE. The saga of Brexit that continues, the saga of the US/China trade war that continues, and further global economic data deterioration that continues. In the midst of all of this, the market finds itself in a share buyback “blackout” period. Buybacks have been the lifeblood of these markets for some time. So take all of these things together and we have quite the witches brew just in time for Halloween. Will central banks be able to ” rescue” the markets, and/or will some kind of “resolution” to Brexit, the US/China trade war, and other geopolitical stories bring out animal spirits or awaken the bears? Thus translating into record-breaking highs on the US stock indexes or will this decade long bull market give way to the bears coming out of hibernation? Time will tell and if history is any indicator, the month of October will give us a good glimpse into the future. #Boeing #Recession #Economy #Justice #Truth #Peace #Politics #Stocks #Invest #Debt #TradeWar #USA #China #Syria #Turkey
Again, The Kapital News is ahead of the curve when only a couple of weeks ago, we issued a warning around Boeing. The podcast, titled, “GE/GM: Trouble at the Plant?,” also covered a discussion of Boeing. At the time, the concern in question pertained to airline pilots with Southwest Airlines filing suit against Boeing for lost wages. The 737 model is the only model employed by Southwest Airlines and the model that has been grounded globally for months is the Boeing 737 MAX 8 airline. The reason for the plane’s grounding is directly in relation to the two flights that crashed last year within six months of each other – killing all on board. What has been described as a flaw in the computer software on the MAX, may now be turning into something a little more nefarious.
It is now understood in part, that the pilots of these two crashed airlines experienced difficulties with the new computer software and were either unable to override the software or were too late in doing so. What is now being reported, is that Boeing personnel from a few years ago were discussing concerns centered around the software and sensor system on the MAX.
The MAX came into existence following a move by Boeing’s main competitor, Airbus, to increase the size of the engine on the Airbus model A320 – a similar plane to Boeing’s 737. The larger engine was supposed to translate into better fuel-efficiency, thus saving airlines millions of dollars. Not to be outdone, Boeing also made the decision to incorporate larger engines on the 737 and thus the 737 MAX 8 was born. A key difference between the A320 and the 737 is that the elevation clearance from the ground to wing on the A320 is greater than that of the 737. Therefore, the larger engine was easier to install on the A320 as opposed to the 737. This led Boeing to have to move the engine forward, causing part of the engine to actually sit higher than the wing of the 737. This change made it possible for the pitch or the trajectory of the nose of the MAX to steepen to such a degree that the plane could enter a stall and potentially crash. This is what happened on both of the downed airplanes. This change in trajectory is most likely to occur during take-off, which is what transpired on the Lion Air and Ethiopian Airline flights – crashing shortly after take-off. In order to account for this steepening, Boeing updated their software in conjunction with sensors, to detect such a dangerous steepening and then correct the aircraft to a safer position. This unfortunately did not occur during these flights and the pilots were unaware as to how to correct for this error.
What now appears to be the case, is that Boeing may have been driven by revenue, profits, and delivering an aircraft in a “timely” fashion to compete with Airbus. We hope that profits and speed were not prioritized at the expense of safety. If this happens to be the case – the damage this will do to Boeing and the greater economy could prove to be immeasurable. Boeing is the largest US exporter and the industries that they depend and likewise the industries that depend on Boeing on will be heavily hit. These include, steel, aluminum, carbon-composite materials, computers, electronics, glass, rubber, paint, and several others. This could be an industrial/manufacturing contagion comparable to the collapse of Lehman Brothers that truly kick-started the collapse of the 2008-2009 financial crisis and subsequent Great Recession.
This issue is being investigated by the FAA, the Department of Transportation, Congress, the DOJ, the FBI, and other global regulators. There will be much more to come. Stay diversified, stay vigilant, and stay with The Kapital News. #Boeing #Recession #Justice #Truth #Peace #USA #Airbus #EU #Europe #Airlines #Congress #DOJ #Economy #Politics
