January 25, 2017: Saudi Arabia cancels $27 billion joint venture with Malaysia.
Later, 11:16 p.m. Central Time: memo to self -- subscribe to Rosetta Stone to learn French.
Original PostLink here to Bloomberg:
Saudi Arabia is intensifying efforts to shrink the highest budget deficit among the world’s biggest 20 economies, aiming to cancel more than $20 billion of projects and slash ministry budgets by a quarter, people familiar with the matter said.
The government is reviewing thousands of projects valued at about 260 billion riyals ($69 billion) and may cancel a third of them, three people said, asking not to be identified as the discussions are private. The measures would impact the budget for several years, according to two of the people.
A separate plan includes merging some government ministries and eliminating others, two people said, also speaking on condition of anonymity.
The world’s biggest oil exporter is taking unprecedented steps to rein in a budget shortfall that ballooned to 16 percent of gross domestic product last year, curtailing fuel and utility subsidies as well as cutting billions of dollars in spending. The International Monetary Fund expects the shortfall to drop to below 10 percent of GDP in 2017.Regular readers know this is a running theme on the website: Saudi is in deeper trouble than most folks realize.
For the past thirteen months or so, Saudi appears to be hemorrhaging around $7 - $9 billion / month in dwindling reserve assets. And at $50 oil for the foreseeable future, the situation is unlikely to improve any time soon.
I really do not understand all the concern about the price of oil. It seems "everyone" is concerned about the low price of oil. I honestly don't get it. I have no trouble with $2.15 for a gallon of gasoline. I would prefer $50 oil and gasoline at $2.00 than $100 oil and $4.00 oil.
My portfolio would look great with $100 oil but I don't like the idea of $4.00 gasoline. I could afford it, but a lot of folks could not.
American on-shore shale operators will survive, and some will do quite well, with $50 oil. But Saudi Arabia and most of its neighbors can't survive on $50 oil and that's just fine with me.
Most investors in the oil sector re-set their portfolios when oil hit $30.
I'm beginning to think we are just about at the sweet spot for oil, somewhere between $46 and $52 in current dollars and current conditions.
I've always wondered what kind of athletic conditioning female long jumpers undergo. I'm impressed. Incredible athleticism.
I watch the first video but place the audio on mute. I have never once listened to the audio for the first video. I don't even know if any audio accompanies the video.
While watching the first video, I play the second video (or preferably the alternate version of the same song) loud and that's what I listen to, listening to the second video and watching the first video. Over and over.