Seven Aerospace and Defense Investments to Buy During the War
Seven aerospace and defense investments to buy during Russia’s invasion of Ukraine include several companies that are providing increasingly important…
Seven aerospace and defense investments to buy during Russia’s invasion of Ukraine include several companies that are providing increasingly important military capabilities.
The seven aerospace and defense investments to buy may begin to trade at a premium to the market, according to a recent report from BofA Global Research. In addition, defense companies historically have been immune to inflation, slowing economic growth, rising interest rates and tending to perform better in election years such as 2022, the BofA report noted.
“Politicians would be unlikely to run on a platform for 2022 mid-term elections not supporting national security in the current environment,” wrote BofA’s senior aerospace and defense analyst Ron Epstein.
From a defense stock perspective, some investors, and possibly certain sell-side analysts, may not understand money flows from Congress to the U.S. Treasury and ultimately to the contractors over time, so investors who expect a quick boost in defense company earnings likely will be disappointed, Epstein opined. However, any weakness in the defense stocks could become a buying opportunity.
Seven Aerospace and Defense Investments to Buy During War Include ETF
Investors who like to gain exposure to multiple aerospace and defense stocks at one time can do so by purchasing a fund, said Bob Carlson, a pension fund chairman who also heads the Retirement Watch investment newsletter. One exchange-traded fund (ETF) that Carlson recommended to me is SPDR Aerospace and Defense (XAR).
Bob Carlson, who leads Retirement Watch, meets with Paul Dykewicz.
The ETF owns 34 stocks and has 36% of the fund in its 10 largest positions. Those positions include Boeing (NYSE: BA), Virgin Galactic (NYSE: SPCE) and Huntington Ingalls (NYSE: HII).
The fund seeks to track the S&P Aerospace and Defense using a sampling strategy. The index is broader than just defense stocks, so it gives exposure to aerospace for those who want it.
Investors who like to buy when an asset is beaten down in price may like XAR. The ETF has slid 0.33% in the past week, 9.12% in the last month, 19.34% for the past three months, 13.96% for the year to date and 24.29% for the last 12 months.
One of Seven Aerospace and Defense Investments to Buy Is Hypersonic Stock
Spirit AeroSystems (NYSE: SPR), headquartered in Wichita, Kansas, is one of the world’s largest manufacturers of aerostructures for commercial airplanes, defense platforms and business/regional jets. With expertise in aluminum and advanced composite manufacturing solutions, the company’s core products include fuselages, integrated wings and wing components, pylons, and nacelles.
Aside from also supporting aftermarket work for commercial and business/regional jets, the company has taken a key role in the defense industry’s research and technology to address the most difficult technical challenges in the pursuit of hypersonic flight. The exceptional speed of such flight is above Mach 5, or five times the speed of sound. Mach 6 is six times the speed of sound, or 820 mph, equaling 2 km per second, or 7,200 km per hour.
Russia is ahead of the United States in developing hypersonic weapons and its defense officials have spoken about having the technology available to use against Ukraine within months. China also is trying to lead in hypersonic technology, leaving the United States trying to catch up.
Spirit AeroSystems’ officials said America’s top technical priority right now is a low-risk and holistic approach to deploy operational hypersonic weapons at scale. A merger between Spirit AeroSystems and Fiber Materials, Inc. (FMI) occurred on Jan. 10, when Spirit closed its purchase of the other entity. FMI’s products currently are on the Trident D5, Standard Missile, PAC 3, THAAD and NASA programs such as Stardust, Mars Curiosity, Orion and Mars 2020.
Gap May Close With One of Seven Aerospace and Defense Investments to Buy
The combined company’s joint capabilities provide materials, design and production to produce thermal protection systems, a key enabling technology for hypersonic flight. FMI, based in Biddeford, Maine, is known in the industry for supplying high-temperature materials, backed by technical support and data for material characterization and predictability, while Spirit AeroSystems adds modeling and simulations to the process, along with its record of commercializing critical flight structures.
New capability provided by Spirit AeroSystems is aimed at helping to position America’s hypersonic programs to meet government demands and timelines. With more than nine decades of experience, the company offers supply chain management, as well as an understanding of the costs and other requirements, its officials said.
With a competitive commercial approach, Spirit AeroSystems is seeking to usher in a new and modern approach to the production of thermal protection, its officials said.
FMI has approximately 230 employees at two facilities in the state. The company’s main operations focus on multidirectionally reinforced composites that enable high-temperature applications such as: thermal protection systems, re-entry vehicle nose tips as well as rocket throats and nozzles.
BWX Breaks IntoSeven Aerospace and Defense Investments to Buy
BWX Technologies, Inc. (NYSE: BWXT), a Lynchburg, Virginia-based supplier of nuclear components and fuel of the U.S. government, provide nuclear components and fuel to the U.S. government. The company also provides technical, management and site services to support governments in the operation of complex facilities and environmental restoration activities.
BofA recommends BWXT and put a $65 price objective on the stock. The valuation implies a 1.1x relative multiple on the defense primes’ 14x weighted average multiple, in line with historical average, according to BofA. The premium is supported by the company’s exposure to the U.S. Navy, its monopoly on nuclear-powered ships as well as its diversification efforts underway, the investment firm wrote in a note. Downside risks to reaching that price target are a possible loss of U.S. government contracts, changes in contracting terms that could pressure margins and program procurement changes that result in market share loss. In addition, the U.S. government is BWXT’s largest customer and accounts for about 90% of BWXT’s revenues. The stock may outperform those BofA estimates by improving upon expected operating performance and margins, or due to increased demand for nuclear aftermarket for power plants and higher-than-expected share in missile tubes for the Virginia-class submarines and Ohio-class submarines, according to BofA.
CACI Captures Spot Among Seven Aerospace and Defense Investments to Buy
CACI International (NYSE: CACI),a Reston, Virginia-based provider ofunique expertise and distinctive technology, seeks to address its customers’ “greatest enterprise and mission challenges” through its support of national security missions, as well as serving defense, intelligence and civilian customers. BofA placed a $370 price objective on the stock.
The investment firm noted that the company’s renewed capital deployment strategy, including opportunistic share repurchases, is offsetting the discount related to the lack of dividend. Plus, the successful software-based tech strategy is getting traction, BofA wrote. Risks are possible cuts to the U.S. Department of Defense budget, problems finding acquisition targets, integrating mergers, hiring the right personnel, containing costs, estimating costs and executing on fixed-price contracts. Unexpected gains could occur via a greater federal budget allocated to innovative technologies and modernization, inexpensive and well-integrated mergers and acquisition activity, unexpected capital return to shareholders through dividends, market share gains and better-than-expected margin expansion, BofA wrote.
Garmin Positions Itself With Seven Aerospace and Defense Investments to Buy
Garmin (NASDAQ: GRMN), ofOlathe, Kansas, provides smart aviation solutions for local, state and federal government agencies, as well as defense organizations. The company offers commercial off-the-shelf (COTS) solutions or others specialized to a mission, using knowledge and experience to enhance the capabilities of an aircraft.
Garmin helps pilots see more, know more and fly smarter with proven technologies, its officials said. The company provides an array of technology to enhance avionics for defense organizations, as well as defense contractors, by offering integrated flight decks, navigation and communication systems, flight displays, weather radar and portable Global Positioning System (GPS) capabilities.
Bryan Perry, a high-income aficionado who is a veteran of Wall Street firms and the editor of the Cash Machine investment newsletter, told me he likes the stock’s outlook.
Paul Dykewicz interviews Wall Street veteran Bryan Perry, who heads the Cash Machinenewsletter.
BoA put a $137 price objective on the stock, using a relative multiple that is consistent with the average relative multiple over the last 20 years and reflects GRMN’s competitive positioning. Overperformance beyond the price target could occur if faster-than-expected growth occurs from new products like smart wearables and the development of an innovative, category-making product. Increased demand for wearables could enhance performance beyond estimates, BofA wrote. Risks to reaching the price target of BofA are market saturation in the medium term, after some of the stock’s end markets benefitted from strong tailwinds in recent quarters due to the pandemic. Industry-wide constraints of certain electrical components further could hurt results, along with foreign exchange risk and freight headwinds weighing on margins.
Leidos Latches OntoSeven Aerospace and Defense Investments to Buy
Leidos Holdings (NYSE: LDOS), a Reason, Virginia-based science and technology company that serves the civil, defense, aviation, health and intelligence industries, formerly was known as Science Applications International Corporation (SAIC). Leidos merged with Lockheed Martin’s (NYSE: LMT) information technology (IT) sector, Information Systems & Global Solutions, in August 2016. That created the defense industry’s largest IT services provider.
The merger became one of the largest transactions in the consolidation of the defense sector, positioning Leidos to work extensively with the U.S. Department of Defense, the U.S. Department of Homeland Security and the U.S. intelligence community, including the National Security Agency (NSA).
BofA put a $125 price objective on the stock. The valuation is in line with defense prime contractors, as strong U.S. National Security demand for innovative technologies and solutions and solid free cash flow generation is offset by a lumpy award environment, supply chain pressures in the near term, pressure on pricing and mounting concerns about labor inflation. Risks to meeting the price target, according to BofA, include possible cuts to the U.S. government budget, increased competition from non-traditional players and problems integrating potential mergers, hiring the right people, containing costs, executing on fixed price contracts and future contract awards. The outlook could be topped with a better-than-anticipated federal budget allocated to innovative technologies and modernization, inexpensive and well-integrated mergers, unexpected capital return to shareholders through share buybacks or dividends, market share gains and better-than-expected margin gains.
Teledyne Takes Place With Seven Aerospace and Defense Investments to Buy
Teledyne Technologies Inc. (NYSE: TDY), of Thousand Oaks, California, provides technologies to sense, transmit and analyze information for industrial growth markets. These markets include aerospace and defense, factory automation, air and water quality environmental monitoring, electronics design and development, oceanographic research, energy, medical imaging and pharmaceutical research.
BofA placed a $531 price objective on TDY. Upside the the BofA outlook could come from faster integration of an acquisition, a more rapid top- and bottom-line recovery in the industrials businesses and even further operating leverage. Risks are another idustrials downturn, a significant decline in the DOD budget, and an exogenous event that prevents international sales.
On June 23, Teledyne FLIR Defense, part of Teledyne Technologies, announced that it has entered into a framework agreement worth up to NOK 475 million (approximately $48 million) with the Norwegian Defence Materiel Agency to deliver advanced Black Hornet nano unmanned aerial vehicles (UAVs). The agreement is valid for four years but can be extended a year at a time for up to three additional years.
Despite Norway receiving its first Black Hornet in 2015, this agreement is Norway’s ‘s largest commitment to date. With these new orders, Norway will become one of the largest users of Teledyne FLIR’s Black Hornet Personal Reconnaissance System.
The Black Hornet weighs just 33 grams, less than 0.1 pounds, and measures 168 millimeters, or just less than seven inches. Well suited for operations in highly contested and GPS-denied environments, the Black Hornet is nearly silent, offers a flight time up to 25 minutes and its pocket-sized unmanned aerial vehicle (UAV) transmits live visible and thermal video to an operator. Teledyne FLIR Defense has delivered more than 12,000 Black Hornets to defense and security forces worldwide so far.
“With this new agreement, nations cooperating with Norway may also procure the Black Hornet,” said Robert Mehrabian, chairman, president and chief executive officer of Teledyne Technologies. “As the world’s leading nano UAV system, Black Hornet delivers covert situational awareness to military units in combat operations — a crucial advantage at a time when European and allied countries confront new threats on the continent and beyond.”
Supply Chains May Improve as China Cuts COVID Curbs
China is trying to curb its COVID-19 restrictions, and it could allow goods produced there to begin flowing normally again in the weeks ahead. China’s lockdowns have affected an estimated 373 million people, including roughly 40% of its gross domestic product (GDP). Disrupted supply chains have affected products such as rice, oil and natural gas.
Shanghai, home to the world’s largest port and 25 million residents, had strained to unload cargo due to strict regulations that caused shipping containers to stack up. Some Shanghai residents posted videos online to complain about needing food, even though government officials sought to block such expressions of frustration.
Chinese authorities also drew public criticism for forcibly separating young children with COVID-19 from their parents to prioritize stopping the spread of a new, contagious subvariant of Omicron, BA.2. The variant also has been causing new infections in European nations such as Germany, the Netherlands and Switzerland.
U.S. COVID Deaths Climb Past 1.018-Million Mark
U.S. COVID-19 deaths climbed to 1,018,364 as of July 6, according to Johns Hopkins University. Cases in the United States, as of that date, hit 88,067,088. America retains the dubious distinction as the country with the highest numbers of COVID-19 deaths and cases.
COVID-19 deaths worldwide totaled 6,342,296 on July 6, according to Johns Hopkins. Cases across the globe have climbed to 551,277,894.
Roughly 77.8% of the U.S. population, or 259,957,415, have obtained at least one dose of a COVID-19 vaccine, as of July 5, the CDC reported. Fully vaccinated people total 222,271,398, or 66.9%, of America’s population, according to the CDC. The United States also has given at least one COVID-19 booster vaccine to 106.3 million people.
The seven aerospace and defense investments to buy are intended to profit from rising inflation, increased grain prices and other economic factors. Despite the market’s volatility, the highest inflation in 41 years, the Fed’s plan for further interest rate hikes this month and increasing federal deficits, investors still may find the seven aerospace and defense stocks to help protect personal portfolios.
Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce, Seeking Alpha, Guru Focus and other publications and websites. Paul, who can be followed on Twitter @PaulDykewicz, is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. Paul also is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The book is great as a gift and is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many others. Call 202-677-4457 for multiple-book pricing.
"I Can't Even Save": Americans Are Getting Absolutely Crushed Under Enormous Debt Load
While Joe Biden insists that Americans are doing great - suggesting in his State of the Union Address last week that "our economy is the envy of the world," Americans are being absolutely crushed by inflation (which the Biden admin blames on 'shrinkflation' and 'corporate greed'), andof course - crippling debt.
The signs are obvious. Last week we noted that banks' charge-offs are accelerating, and are now above pre-pandemic levels.
...and leading this increase are credit card loans - with delinquencies that haven't been this high since Q3 2011.
On top of that, while credit cards and nonfarm, nonresidential commercial real estate loans drove the quarterly increase in the noncurrent rate, residential mortgages drove the quarterly increase in the share of loans 30-89 days past due.
And while Biden and crew can spin all they want, an average of polls from RealClear Politics shows that just 40% of people approve of Biden's handling of the economy.
Crushed
On Friday, Bloomberg dug deeper into the effects of Biden's "envious" economy on Americans - specifically, how massive debt loads (credit cards and auto loans especially) are absolutely crushing people.
Two years after the Federal Reserve began hiking interest rates to tame prices, delinquency rates on credit cards and auto loans are the highest in more than a decade. For the first time on record, interest payments on those and other non-mortgage debts are as big a financial burden for US households as mortgage interest payments.
According to the report, this presents a difficult reality for millions of consumers who drive the US economy - "The era of high borrowing costs — however necessary to slow price increases — has a sting of its own that many families may feel for years to come, especially the ones that haven’t locked in cheap home loans."
The Fed, meanwhile, doesn't appear poised to cut rates until later this year.
According to a February paper from IMF and Harvard, the recent high cost of borrowing - something which isn't reflected in inflation figures, is at the heart of lackluster consumer sentiment despite inflation having moderated and a job market which has recovered (thanks to job gains almost entirely enjoyed by immigrants).
In short, the debt burden has made life under President Biden a constant struggle throughout America.
"I’m making the most money I've ever made, and I’m still living paycheck to paycheck," 40-year-old Denver resident Nikki Cimino told Bloomberg. Cimino is carrying a monthly mortgage of $1,650, and has $4,000 in credit card debt following a 2020 divorce.
"There's this wild disconnect between what people are experiencing and what economists are experiencing."
CBS: Do you attribute the inflation crisis to the pandemic or Biden?
WISCONSIN VOTER: "It's been YEARS now since the pandemic — I'm not buying that anymore. At first I did; I'm not buying that anymore because yogurt is STILL going up in price!" pic.twitter.com/apahb65scB
What's more, according to Wells Fargo, families have taken on debt at a comparatively fast rate - no doubt to sustain the same lifestyle as low rates and pandemic-era stimmies provided. In fact, it only took four years for households to set a record new debt level after paying down borrowings in 2021 when interest rates were near zero.
Meanwhile, that increased debt load is exacerbated by credit card interest rates that have climbed to a record 22%, according to the Fed.
[P]art of the reason some Americans were able to take on a substantial load of non-mortgage debt is because they’d locked in home loans at ultra-low rates, leaving room on their balance sheets for other types of borrowing. The effective rate of interest on US mortgage debt was just 3.8% at the end of last year.
Yet the loans and interest payments can be a significant strain that shapes families’ spending choices. -Bloomberg
And of course, the highest-interest debt (credit cards) is hurting lower-income households the most, as tends to be the case.
The lowest earners also understandably had the biggest increase in credit card delinquencies.
"Many consumers are levered to the hilt — maxed out on debt and barely keeping their heads above water," Allan Schweitzer, a portfolio manager at credit-focused investment firm Beach Point Capital Management told Bloomberg. "They can dog paddle, if you will, but any uptick in unemployment or worsening of the economy could drive a pretty significant spike in defaults."
"We had more money when Trump was president," said Denise Nierzwicki, 69. She and her 72-year-old husband Paul have around $20,000 in debt spread across multiple cards - all of which have interest rates above 20%.
During the pandemic, Denise lost her job and a business deal for a bar they owned in their hometown of Lexington, Kentucky. While they applied for Social Security to ease the pain, Denise is now working 50 hours a week at a restaurant. Despite this, they're barely scraping enough money together to service their debt.
The couple blames Biden for what they see as a gloomy economy and plans to vote for the Republican candidate in November. Denise routinely voted for Democrats up until about 2010, when she grew dissatisfied with Barack Obama’s economic stances, she said. Now, she supports Donald Trump because he lowered taxes and because of his policies on immigration. -Bloomberg
Meanwhile there's student loans - which are not able to be discharged in bankruptcy.
"I can't even save, I don't have a savings account," said 29-year-old in Columbus, Ohio resident Brittany Walling - who has around $80,000 in federal student loans, $20,000 in private debt from her undergraduate and graduate degrees, and $6,000 in credit card debt she accumulated over a six-month stretch in 2022 while she was unemployed.
"I just know that a lot of people are struggling, and things need to change," she told the outlet.
The only silver lining of note, according to Bloomberg, is that broad wage gains resulting in large paychecks has made it easier for people to throw money at credit card bills.
Yet, according to Wells Fargo economist Shannon Grein, "As rates rose in 2023, we avoided a slowdown due to spending that was very much tied to easy access to credit ... Now, credit has become harder to come by and more expensive."
According to Grein, the change has posed "a significant headwind to consumption."
Then there's the election
"Maybe the Fed is done hiking, but as long as rates stay on hold, you still have a passive tightening effect flowing down to the consumer and being exerted on the economy," she continued. "Those household dynamics are going to be a factor in the election this year."
Meanwhile, swing-state voters in a February Bloomberg/Morning Consult poll said they trust Trump more than Biden on interest rates and personal debt.
Reverberations
These 'headwinds' have M3 Partners' Moshin Meghji concerned.
"Any tightening there immediately hits the top line of companies," he said, noting that for heavily indebted companies that took on debt during years of easy borrowing, "there's no easy fix."
Sylvester researchers, collaborators call for greater investment in bereavement care
MIAMI, FLORIDA (March 15, 2024) – The public health toll from bereavement is well-documented in the medical literature, with bereaved persons at greater…
MIAMI, FLORIDA (March 15, 2024) – The public health toll from bereavement is well-documented in the medical literature, with bereaved persons at greater risk for many adverse outcomes, including mental health challenges, decreased quality of life, health care neglect, cancer, heart disease, suicide, and death. Now, in a paper published in The Lancet Public Health, researchers sound a clarion call for greater investment, at both the community and institutional level, in establishing support for grief-related suffering.
Credit: Photo courtesy of Memorial Sloan Kettering Comprehensive Cancer Center
MIAMI, FLORIDA (March 15, 2024) – The public health toll from bereavement is well-documented in the medical literature, with bereaved persons at greater risk for many adverse outcomes, including mental health challenges, decreased quality of life, health care neglect, cancer, heart disease, suicide, and death. Now, in a paper published in The Lancet Public Health, researchers sound a clarion call for greater investment, at both the community and institutional level, in establishing support for grief-related suffering.
The authors emphasized that increased mortality worldwide caused by the COVID-19 pandemic, suicide, drug overdose, homicide, armed conflict, and terrorism have accelerated the urgency for national- and global-level frameworks to strengthen the provision of sustainable and accessible bereavement care. Unfortunately, current national and global investment in bereavement support services is woefully inadequate to address this growing public health crisis, said researchers with Sylvester Comprehensive Cancer Center at the University of Miami Miller School of Medicine and collaborating organizations.
They proposed a model for transitional care that involves firmly establishing bereavement support services within healthcare organizations to ensure continuity of family-centered care while bolstering community-based support through development of “compassionate communities” and a grief-informed workforce. The model highlights the responsibility of the health system to build bridges to the community that can help grievers feel held as they transition.
The Center for the Advancement of Bereavement Care at Sylvester is advocating for precisely this model of transitional care. Wendy G. Lichtenthal, PhD, FT, FAPOS, who is Founding Director of the new Center and associate professor of public health sciences at the Miller School, noted, “We need a paradigm shift in how healthcare professionals, institutions, and systems view bereavement care. Sylvester is leading the way by investing in the establishment of this Center, which is the first to focus on bringing the transitional bereavement care model to life.”
What further distinguishes the Center is its roots in bereavement science, advancing care approaches that are both grounded in research and community-engaged.
The authors focused on palliative care, which strives to provide a holistic approach to minimize suffering for seriously ill patients and their families, as one area where improvements are critically needed. They referenced groundbreaking reports of the Lancet Commissions on the value of global access to palliative care and pain relief that highlighted the “undeniable need for improved bereavement care delivery infrastructure.” One of those reports acknowledged that bereavement has been overlooked and called for reprioritizing social determinants of death, dying, and grief.
“Palliative care should culminate with bereavement care, both in theory and in practice,” explained Lichtenthal, who is the article’s corresponding author. “Yet, bereavement care often is under-resourced and beset with access inequities.”
Transitional bereavement care model
So, how do health systems and communities prioritize bereavement services to ensure that no bereaved individual goes without needed support? The transitional bereavement care model offers a roadmap.
“We must reposition bereavement care from an afterthought to a public health priority. Transitional bereavement care is necessary to bridge the gap in offerings between healthcare organizations and community-based bereavement services,” Lichtenthal said. “Our model calls for health systems to shore up the quality and availability of their offerings, but also recognizes that resources for bereavement care within a given healthcare institution are finite, emphasizing the need to help build communities’ capacity to support grievers.”
Key to the model, she added, is the bolstering of community-based support through development of “compassionate communities” and “upskilling” of professional services to assist those with more substantial bereavement-support needs.
The model contains these pillars:
Preventive bereavement care –healthcare teams engage in bereavement-conscious practices, and compassionate communities are mindful of the emotional and practical needs of dying patients’ families.
Ownership of bereavement care – institutions provide bereavement education for staff, risk screenings for families, outreach and counseling or grief support. Communities establish bereavement centers and “champions” to provide bereavement care at workplaces, schools, places of worship or care facilities.
Resource allocation for bereavement care – dedicated personnel offer universal outreach, and bereaved stakeholders provide input to identify community barriers and needed resources.
Upskilling of support providers – Bereavement education is integrated into training programs for health professionals, and institutions offer dedicated grief specialists. Communities have trained, accessible bereavement specialists who provide support and are educated in how to best support bereaved individuals, increasing their grief literacy.
Evidence-based care – bereavement care is evidence-based and features effective grief assessments, interventions, and training programs. Compassionate communities remain mindful of bereavement care needs.
Lichtenthal said the new Center will strive to materialize these pillars and aims to serve as a global model for other health organizations. She hopes the paper’s recommendations “will cultivate a bereavement-conscious and grief-informed workforce as well as grief-literate, compassionate communities and health systems that prioritize bereavement as a vital part of ethical healthcare.”
“This paper is calling for healthcare institutions to respond to their duty to care for the family beyond patients’ deaths. By investing in the creation of the Center for the Advancement of Bereavement Care, Sylvester is answering this call,” Lichtenthal said.
Follow @SylvesterCancer on X for the latest news on Sylvester’s research and care.
# # #
Article Title: Investing in bereavement care as a public health priority
DOI: 10.1016/S2468-2667(24)00030-6
Authors: The complete list of authors is included in the paper.
Funding: The authors received funding from the National Cancer Institute (P30 CA240139 Nimer) and P30 CA008748 Vickers).
Disclosures: The authors declared no competing interests.
# # #
Journal
The Lancet Public Health
DOI
10.1016/S2468-2667(24)00030-6
Article Title
Investing in bereavement care as a public health priority
Artificial intelligence (AI) cannot distinguish fact from fiction. It also isn’t creative or can create novel content but repeats, repackages, and reformulates what has already been said (but perhaps in new ways).
I am sure someone will disagree with the latter, perhaps pointing to the fact that AI can clearly generate, for example, new songs and lyrics. I agree with this, but it misses the point. AI produces a “new” song lyric only by drawing from the data of previous song lyrics and then uses that information (the inductively uncovered patterns in it) to generate what to us appears to be a new song (and may very well be one). However, there is no artistry in it, no creativity. It’s only a structural rehashing of what exists.
Of course, we can debate to what extent humans can think truly novel thoughts and whether human learning may be based solely or primarily on mimicry. However, even if we would—for the sake of argument—agree that all we know and do is mere reproduction, humans have limited capacity to remember exactly and will make errors. We also fill in gaps with what subjectively (not objectively) makes sense to us (Rorschach test, anyone?). Even in this very limited scenario, which I disagree with, humans generate novelty beyond what AI is able to do.
Both the inability to distinguish fact from fiction and the inductive tether to existent data patterns are problems that can be alleviated programmatically—but are open for manipulation.
Manipulation and Propaganda
When Google launched its Gemini AI in February, it immediately became clear that the AI had a woke agenda. Among other things, the AI pushed woke diversity ideals into every conceivable response and, among other things, refused to show images of white people (including when asked to produce images of the Founding Fathers).
Tech guru and Silicon Valley investor Marc Andreessen summarized it on X (formerly Twitter): “I know it’s hard to believe, but Big Tech AI generates the output it does because it is precisely executing the specific ideological, radical, biased agenda of its creators. The apparently bizarre output is 100% intended. It is working as designed.”
There is indeed a design to these AIs beyond the basic categorization and generation engines. The responses are not perfectly inductive or generative. In part, this is necessary in order to make the AI useful: filters and rules are applied to make sure that the responses that the AI generates are appropriate, fit with user expectations, and are accurate and respectful. Given the legal situation, creators of AI must also make sure that the AI does not, for example, violate intellectual property laws or engage in hate speech. AI is also designed (directed) so that it does not go haywire or offend its users (remember Tay?).
However, because such filters are applied and the “behavior” of the AI is already directed, it is easy to take it a little further. After all, when is a response too offensive versus offensive but within the limits of allowable discourse? It is a fine and difficult line that must be specified programmatically.
It also opens the possibility for steering the generated responses beyond mere quality assurance. With filters already in place, it is easy to make the AI make statements of a specific type or that nudges the user in a certain direction (in terms of selected facts, interpretations, and worldviews). It can also be used to give the AI an agenda, as Andreessen suggests, such as making it relentlessly woke.
Thus, AI can be used as an effective propaganda tool, which both the corporations creating them and the governments and agencies regulating them have recognized.
Misinformation and Error
States have long refused to admit that they benefit from and use propaganda to steer and control their subjects. This is in part because they want to maintain a veneer of legitimacy as democratic governments that govern based on (rather than shape) people’s opinions. Propaganda has a bad ring to it; it’s a means of control.
However, the state’s enemies—both domestic and foreign—are said to understand the power of propaganda and do not hesitate to use it to cause chaos in our otherwise untainted democratic society. The government must save us from such manipulation, they claim. Of course, rarely does it stop at mere defense. We saw this clearly during the covid pandemic, in which the government together with social media companies in effect outlawed expressing opinions that were not the official line (see Murthy v. Missouri).
AI is just as easy to manipulate for propaganda purposes as social media algorithms but with the added bonus that it isn’t only people’s opinions and that users tend to trust that what the AI reports is true. As we saw in the previous article on the AI revolution, this is not a valid assumption, but it is nevertheless a widely held view.
If the AI then can be instructed to not comment on certain things that the creators (or regulators) do not want people to see or learn, then it is effectively “memory holed.” This type of “unwanted” information will not spread as people will not be exposed to it—such as showing only diverse representations of the Founding Fathers (as Google’s Gemini) or presenting, for example, only Keynesian macroeconomic truths to make it appear like there is no other perspective. People don’t know what they don’t know.
Of course, nothing is to say that what is presented to the user is true. In fact, the AI itself cannot distinguish fact from truth but only generates responses according to direction and only based on whatever the AI has been fed. This leaves plenty of scope for the misrepresentation of the truth and can make the world believe outright lies. AI, therefore, can easily be used to impose control, whether it is upon a state, the subjects under its rule, or even a foreign power.
The Real Threat of AI
What, then, is the real threat of AI? As we saw in the first article, large language models will not (cannot) evolve into artificial general intelligence as there is nothing about inductive sifting through large troves of (humanly) created information that will give rise to consciousness. To be frank, we haven’t even figured out what consciousness is, so to think that we will create it (or that it will somehow emerge from algorithms discovering statistical language correlations in existing texts) is quite hyperbolic. Artificial general intelligence is still hypothetical.
As we saw in the second article, there is also no economic threat from AI. It will not make humans economically superfluous and cause mass unemployment. AI is productive capital, which therefore has value to the extent that it serves consumers by contributing to the satisfaction of their wants. Misused AI is as valuable as a misused factory—it will tend to its scrap value. However, this doesn’t mean that AI will have no impact on the economy. It will, and already has, but it is not as big in the short-term as some fear, and it is likely bigger in the long-term than we expect.
No, the real threat is AI’s impact on information. This is in part because induction is an inappropriate source of knowledge—truth and fact are not a matter of frequency or statistical probabilities. The evidence and theories of Nicolaus Copernicus and Galileo Galilei would get weeded out as improbable (false) by an AI trained on all the (best and brightest) writings on geocentrism at the time. There is no progress and no learning of new truths if we trust only historical theories and presentations of fact.
However, this problem can probably be overcome by clever programming (meaning implementing rules—and fact-based limitations—to the induction problem), at least to some extent. The greater problem is the corruption of what AI presents: the misinformation, disinformation, and malinformation that its creators and administrators, as well as governments and pressure groups, direct it to create as a means of controlling or steering public opinion or knowledge.
This is the real danger that the now-famous open letter, signed by Elon Musk, Steve Wozniak, and others, pointed to:
“Should we let machines flood our information channels with propaganda and untruth? Should we automate away all the jobs, including the fulfilling ones? Should we develop nonhuman minds that might eventually outnumber, outsmart, obsolete and replace us? Should we risk loss of control of our civilization?”
Other than the economically illiterate reference to “automat[ing] away all the jobs,” the warning is well-taken. AI will not Terminator-like start to hate us and attempt to exterminate mankind. It will not make us all into biological batteries, as in The Matrix. However, it will—especially when corrupted—misinform and mislead us, create chaos, and potentially make our lives “solitary, poor, nasty, brutish and short.”
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