Investors, like generals, often prepare for the last war. The US Air Force just reminded us that sometimes they fight the last war with the last war's equipment. Eight airmen are dead after a B-52 Stratofortress crashed during a training exercise in California.
The bomber, a Cold War veteran, went down in a remote area near the Nevada border. While the cause is under investigation, the incident inevitably focuses attention on the ageing fleet. These aircraft have flown since the 1950s.
They have been upgraded, patched and stretched beyond any sensible lifespan. The Pentagon's budget, much like a poorly structured bond, carries hidden risks. This crash is a margin call on decades of deferred maintenance.
Expect scrutiny of defence spending and contractor reliability. Markets will watch for any impact on aerospace stocks, though the real cost is already paid in lives lost.
