Saudi Aramco IPO: The Numbers Don't Add Up And For Bloomberg: Business As Usual -- May 16, 2016

Updates

Later, 9:13 p.m. Central Time: with regard to US Treasuries and Saudi Arabia, please do not read my post without reading the post at ZeroHedge, a post found by a reader (see first comment, thank you very much).  Too comments:

• Saudi Arabia could be holding more US Treasuries than being report by the US government
• it appears no one has any clue

Be sure to read the entire ZeroHedge post. Again, a huge "thank you" to the reader for spotting this. 

Original Post

 

From various sources this is my 30-second, elevator speech regarding Saudi Arabia and its trillion-dollar mistake:

• the country is said to have had about $850 billion in cash and marketable equities when this all started;
• the country is said to have lost maybe $250 billion since October, 2014, due to the "trillion-dollar-mistake"; maybe more, maybe less; maybe a lot more;
• currently the country is losing about $5 billion / month;
• the NY Times recently reported that if the "9/11 report" was released, Saudi Arabia was ready to sell $750 billion in US Treasuries; and,
• one would think about 2/3rds (maybe more of a country's assets) would be in cash, marketable equities, or in this case, 0.67 * 850 = $550 billion.

In a short Bloomberg story posted today, the writers note that the US Treasury Department:

... has released a breakdown of Saudi Arabia's holding of US debt (i.e., Treasuries), after keeping the figures scret for more than four decades. 

And ... drum roll ... drum roll...

The stockpile of the world's biggest oil exporter stood at $116.8 billion ... 

... let's just call it less than $150 billion, giving Prince Salman a bit of slack. Now 5% of a trillion company ($50 billion) looks a lot more reasonable. I always wondered why such a low amount ("less than 5%" has been the usual boiler-plate number) was being offered in the IPO. Well, now we know. If one's stockpile is only $150 billion, then $50 billion actually looks pretty impressive.

I don't know. Nothing adds up. But then my experience in the the Mideast for two years confirms that nothing ever adds up in the Mideast.

Compare the Saudi's state amount of US Treasuries (less than $150 billion) with that of:

• China, $1.3 trillion
• Japan, $1.1 trillion

Bloomberg says Saudi's $116.8 billion "ranks Saudi Arabia among the top dozen foreign nations in terms of holdings of US debt, and ..."

I don't know about you, but $120 billion is not even in the same ballpark as $1 trillion, especially when you are losing $5 billion/month. But then that many zeros has (have) always confused me.

Maybe I'm misreading something.