WEDNESDAY, FEBRUARY 21, 2024
2/21/2024 6:09:00 AM
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A.M. Edition for Feb. 21. To pay for flashy spending plans, Saudi Arabia is
turning to borrowing and planning a major sale of Aramco stock. WSJ reporter
Chelsey Dulaney breaks down the long term tradeoffs that could accompany those moves. Plus, American
food spending hits highs not seen in more than three decades. And legendary tech investor Cathie Wood joins others in
capturing profits from chipmaker Nvidia. Hear more from her on WSJ Special Access on
Spotify or
Apple Podcasts. Luke Vargas hosts.
FULL TRANSCRIPT
This transcript was prepared by a transcription service. This version may not be in its final form and may be updated.
Luke Vargas: The US prepares new sanctions on Russia following the death of Kremlin critic Alexei Navalny. Plus, American food spending hits highs not seen in more than three decades. And, the bill starts to come due for Saudi Arabia's mega project spending spree.
Chelsea Dulaney: When Saudi really started to increase these investments, they had a huge oil windfall. And that's really evaporated, so it means that they do have less financial firepower, so they are having to look elsewhere for cash.
Luke Vargas: It's Wednesday, February 21st. I'm Luke Vargas for the Wall Street Journal, and here is the AM edition of What's News, the top headlines and business stories moving your world today. The White House is planning a major sanctions package against Russia to hold the Kremlin accountable for Alexei Navalny's death in prison. President Biden will announce the details on Friday ahead of the two-year anniversary of Russia's invasion of Ukraine. State Department spokesperson Matthew Miller used the milestone to repeat the administration's call that Congress passed additional aid for Kyiv.
Matthew Miller: We saw further evidence of the Putin regime's brutality and disregard for human life in Avdiivka this weekend where Ukrainian citizens bravely tried to hold off Putin's illegal invasion while facing rationed ammunition due to dwindling supplies. Unfortunately, Russia made its first notable gains in months. It is now more clear than ever what the stakes are in Ukraine. Without more support from Congress, Ukraine will not be able to replenish its air defenses and ammunition supplies to help protect itself from Russia's aggression.
Luke Vargas: Well, the Biden administration is also planning to replace China-built cranes at America's cargo ports to counter fears that they pose a national security risk. Officials say they're investing more than $20 billion for port security improvements over the next five years, which includes supporting a US subsidiary of Japan's Mitsui to produce domestic cranes for the first time in 30 years. Those actions follow a journal investigation that found that giant cranes made by a Chinese state-owned company could present espionage and disruption risks with some officials saying that software in the cranes could be manipulated to impede American shipping. US officials have so far declined to say whether the Chinese have improperly used the cranes. Donors are pouring money into former South Carolina Governor Nikki Haley's presidential campaign despite her losing every Republican primary so far. According to new Federal filings, Haley's campaign pulled in more than $9.8 million in contributions last month with venture capital and business leaders among the most generous. Haley has vowed to stay in the race and her financial support underscores a divide in the Republican Party as some of its voters seek an alternative to Donald Trump. Trump's campaign ended January with $30 million in cash behind the $56 million for President Biden's campaign committee, but ahead of Haley's 13 million. Coming up, as Saudi Arabia's ambitious megaprojects start to sap its cash, we'll look at how the kingdom is responding to a new financial reality. That and more after the break. Are Saudi Arabia's mega ambitions starting to collide with financial reality? Over the past year, the Kingdom has continued to announce one multi-billion dollar project after another from daring new infrastructure initiatives to massive investments in future industries. But the Journal's Chelsea Dulaney reports that all of that is getting rather expensive and forcing the country to turn to borrowing and paring down its stake in its crown jewel oil company. And if that's needed now, how much more creative might the Kingdom's accounting need to become in the coming years? Chelsea, so glad to dive into this with you. Remind us, if you could just, how much Saudi Arabia has run up its tab in recent months.
Chelsea Dulaney: Yeah, absolutely. Saudi Arabia has been splashing cash everywhere over the past couple of years. And there's really no limit to the ambitions of the Crown Prince Mohammed bin Salman. He's in the middle of this huge effort to reshape the Saudi economy. He wants to make it less oil dependent, and so they've just been announcing one project after another. Some of these are extremely futuristic, very sci-fi Star Wars. For example, Neom, which is this city in the desert that's supposed to have these two mirrored buildings that are over 100 miles long with a high speed rail in between them. And then you have this cube quarter mile high, it can fit 20 Empire state buildings that they're building in Riyadh and it's going to have holograms. There's all these incredibly ambitious real estate projects, but they've also been spending that money outside of Saudi as well. So they've completely shaken up the golf world. They've been bringing really high profile soccer players into the Saudi League. It's hard to put a dollar figure on how much money Saudi has committed to all of these efforts, but their goal is to make the Sovereign Wealth Fund, which is what they're funneling these investments through. They want it to have about $2 trillion worth of assets by the end of this decade. Right now it's just over 700 billion. So that just gives you a sense of how much more they plan to scale up.
Luke Vargas: And Chelsea, with the bill for all of these projects going up, we are now seeing cash on hand basically for the PIF starting to go down, and that's coming at a time when oil revenue coming in is also on the decline.
Chelsea Dulaney: Yes. So we have seen the PIF cash come down to about $15 billion. That's down by about 75% over the past couple of years. So it's gotten quite well. At the same time, when Saudi began this Vision project, it was a different situation. When Saudi really started to increase these investments, it was a different outlook for the oil market, which is what they rely on. So oil prices went gangbusters during the beginning of the war in Ukraine. They had a huge oil windfall, and that's really evaporated. So it means that they do have less financial firepower that's not really expected to change, so they are having to look elsewhere for cash.
Luke Vargas: So needing cash, how are they responding?
Chelsea Dulaney: They still have a lot of levers. So Saudi has an extremely low debt ratio. So one of the things that they've been doing is issuing a lot of debt. They've issued already almost $20 billion this year between the government and between PIF. They've also begun to explore selling more shares of Aramco, the state oil giant, and that's expected to raise somewhere around $20 billion that would go to the Saudi government, but is expected to also be used to top up the PIF cash reserves, which have really dwindled. What economists expect, what people who watch Saudi expect is basically a continuation of this more debt, finding other ways to monetize the state-run businesses that they have all to funnel into this huge ambition to reshape the economy.
Luke Vargas: What effect are those moves having? I know there's more Aramco's stake to sell if need be, but you can't do that forever. And if more debt keeps getting issued, borrowing costs could go up for some of these projects too, right?
Chelsea Dulaney: All of the short-term steps that Saudi can take to raise cash are going to have a long-term trade-off. So they still own over 90% of Aramco, but as they sell parts of that off, it reduces one of the main key sources of funding for the government. So they get dividends from Aramco, they tax Aramco's revenue. And that's a fundamental driver of the Saudi budget. So once they sell more and more shares off, that means that they're getting less money from Aramco themselves. At the same time, as they borrow more, that means that investors are going to start demanding higher interest rates. So all of that means that they are going to start eroding some of those revenue sources and having to pay more to borrow.
Luke Vargas: Chelsea, if Saudi Arabia is needing to do this now, how much more might be needed in the coming years, especially given that many of these projects if they have broken ground, are still not going to be generating revenue for quite a long time to come.
Chelsea Dulaney: This question of whether these projects are going to pay off is the fundamental dilemma for Saudi Arabia right now. They have acknowledged that some of these projects might be delayed. We did talk to Tim Callen, who was the IMF mission chief to Saudi Arabia. Now he's at The Arab Gulf States Institute in DC. And what he said was that they will likely have to take more risk, but then there's a question over these very few futuristic, very expensive projects in the future. So Neom, a 100 miles long mirrored buildings in the desert, is it going to be worth $500 billion that they plan to spend on it? So there's definitely a lot of concern that they are following a well-worn path that other countries have trod in the past of spending a lot of money on moonshot projects. I think that's definitely a concern that some have.
Luke Vargas: I've been speaking to Wall Street Journal reporter Chelsea Dulaney. Chelsea, thank you so much for bringing us this story.
Caitlin McCabe: Thank you for having me.
Luke Vargas: Chipmaker Nvidia's stock has slipped as investors reap the profits of a sustained rally in recent weeks ahead of the AI giant's earnings today. Recent stock gains have catapulted Nvidia to become more valuable than tech stalwarts Amazon and Alphabet. Legendary tech investor and ARK Investment Management CEO Cathie Wood is one of the investors taking stock, and she told WSJ's Take on the Week Podcast about why she recently went from a buyer to a seller.
Cathie Wood: I've watched Nvidia all my career actually since it's gone public. It's a very cyclical stock. And the reason is just like now, when Nvidia is feeding a new movement, in 2017, it was the crypto movement, GPUs were very important, there's this hyper activity, everyone excited trying to get in at the same time. So there's double ordering, triple ordering, quadruple ordering. And then there is an inventory correction. We think that will happen again.
Luke Vargas: And you can hear more from Cathie Wood on the latest episode of WSJ's Take on the Week. And a longer version of that interview will be available tomorrow on WSJ's Special Access on Spotify and Apple Podcast. That's only for WSJ subscribers. And you can look for more information in our show notes. Well, before we get Nvidia's earnings, investors will be parsing today's Fed Minutes and not least what policymakers have to say about sticky inflation in the US. Overall, price rises may be easing, but you wouldn't know it from what you're paying at restaurants or the grocery store, because according to the US Department of Agriculture, Americans spent more than 11% of their disposable income on food last year, the highest level since 1991. Food inflation has raised the ire of President Biden who criticized food makers on social media during the Super Bowl for providing less bang for consumers buck. But Journal reporter Caitlin McCabe told me that relief isn't likely to arrive anytime soon.
Caitlin McCabe: Restaurant and food company executives said they're still grappling with rising labor costs in part because of the change in minimum wage in 22 states in January. And increased costs for some ingredients like cocoa, sugar, and beef are still high or in some cases even rising. And as one CEO of a food company told the Wall Street Journal, food prices tend to be sticky. And once they go up, we don't often see them come back down.
Luke Vargas: And Caitlin, food companies are increasingly reporting that consumer behavior is shifting as a result of that, right?
Caitlin McCabe: Yeah, exactly. Companies are seeing this show up in a variety of ways in their financial results. Big food makers like Hershey and Kraft Heinz have reported that their sales volumes have declined as prices have been rising for their products. And Denny's and Wendy's, for example, told investors this month that their guest counts fell last year compared to the previous year, especially as those with lower incomes feel the financial pinch.
Luke Vargas: A new vaccine that protects babies from the deadly respiratory virus, RSV, is proving hard to find. RSV is the leading cause of hospitalization for young kids in the US with up to 300 children under age five dying each year as a result of the virus. In clinical trials, the shot cut the risk of a baby having to see a doctor for RSV or be hospitalized for the illness by 75%. However, a bumpy rollout of the vaccine is tarnishing what otherwise promised to be a radically different RSV season with the hunt for doses especially difficult for parents with commercial insurance. The Journal's Liz Essley Whyte says producer Sanofi vastly underestimated demand.
Liz Essley Whyte: Pediatricians weren't sure if insurance was going to cover this monoclonal antibody, and so they didn't order a lot at first. And then later when they did start ordering, it wasn't available. And so some of them may have gotten discouraged and stopped ordering even though more doses became available in January. And then it wasn't clear that in the US whether this monoclonal antibody would be added to the Vaccines for Children program, which covers about half of kids in the US and it gives vaccines to low-income kids, kids on Medicaid. And once it was added, the CDC purchased for the program more than half of Sanofi's supply. So that meant that it was just difficult for the shots to be distributed evenly and there were lots of bumps in the road.
Luke Vargas: And finally, it is the soundtrack of the winter workplace, sick colleagues. American workers are reporting to their desks at the highest rate in almost four years, and they are doing so at a time when the CDC says that rates of respiratory illness have been lingering above the national average for several months in a row. The Journal's Callum Borchers told us that is leading to a lose-lose situation for many workers shamed by bosses if they call in sick or sick-shamed by colleagues if they show up contagious.
Callum Borchers: You prove during the pandemic that you can work from home. A lot of folks, they just sign on from home instead of actually calling in sick. They're typing and blowing into their tissue in their pajamas at home, but they're still working. Some bosses acknowledge that when somebody says, "Hey, I'm not feeling well today," instead of initially just saying, "Okay, great, take the day off," they do sometimes ask, "Okay, do you feel well enough to work from home?" Just that question, just asking that question can make a worker feel like, "Oh, I guess I shouldn't really take a sick day." This concept of sick shaming really cuts both ways. You can be shamed by your manager for calling in sick and leaving others in the lurch to pick up the slack for you, but you also get the stink eye from workers if you show up contagious, because nobody wants to be around the person who's packing up a lung at their desk. So I think for a lot of workers, it feels like a no-win situation.
Luke Vargas: And that is What's News for Wednesday morning. Today's show was produced by Kate Bullivant and Charlie Duffield. Our supervising producer is Sandra Kilhof, and I'm Luke Vargas for the Wall Street Journal. We will be back tonight with a new show. Until then, thanks for listening. Get well soon.
الأربعاء 21 فبراير 2024
21/02/2024 6:09:00 صباحًا
المملكة العربية السعودية تستنزف احتياطياتها النقدية
أكون. إصدار 21 فبراير. لدفع تكاليف خطط الإنفاق المبهرجة، تتجه المملكة العربية السعودية إلى الاقتراض والتخطيط لبيع كبير لأسهم أرامكو. مراسل وول ستريت جورنال، تشيلسي دولاني، يشرح المقايضات طويلة المدى التي يمكن أن تصاحب تلك التحركات. بالإضافة إلى ذلك، وصل الإنفاق على الغذاء الأمريكي إلى مستويات غير مسبوقة منذ أكثر من ثلاثة عقود. وتنضم المستثمرة التكنولوجية الأسطورية كاثي وود إلى آخرين في جني الأرباح من شركة تصنيع الرقائق Nvidia. استمع إلى المزيد منها على WSJ Special Access على Spotify أو Apple Podcasts. يستضيف لوك فارغاس.
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اذا كان الامر يهمك فاستخدم ترجمة غوغل لان المقال طويل ويستحق القراءة !
وهو غيض من فيض وهذا قبل ان يصبح هذا المصروع _ انه معاق دماغيا بشكل حقيقي وفشل الالمان بمعالجته منذ كان صبيا وسيصبح " ملكا " عليكم وعلى الملايين وسيتحكم بحياتكم بحسب اوامر من صنعوه لتدميركم وذلكم وذل الامة كلها معكم وترون بام اعينكم ما صنعه منذ تولى باسم ابيه كل هذه البلاوي والمصائب ... فكيف بعد ان يتمتع بالحصانة الدولية كالملعون الصهيوني ابوه ؟
ملحوظة ضرورية : ( هؤلاء ... كل ال سعود وحكامكم في البلاد العربية بلا استثناء .... حيهم وميتهم ... لايحلون ولا يربطون ومن يحكمكم انتم الان هو السفير الامريكي جون ابي زيد في الرياض وهو من يحرس وجود احمد بن عبد العزيز في سفارته ) وما هذا الخنزير بن الخنزير سلمان وهذا المصروع ابنه وبقية طاقم الخنازير الذين يحكمونكم الا واجهة لاقيمة لها من قبل ومن بعد ... فمن يخطط وينفذ شيئ وهو للصور فقط لاغير وللتوقيع على عقود الاجرام وهدم الاسلام واهله باسمكم انتم ايها الاوغاد ..المنافقين )
اعطني بني ادم واحد من العرب والمسلمين يعمل لقبر هذه الاسرة النجسة الملعونة وابادتها ومسحها نهائيا من التاريخ والجغرافيا وعقول البهائم ومن يحرسونها في الكرة الارضية !
وماذا لايوجد برايك؟
وانت وغيرك ..الاتساهمون في ابقائهم رغم ان يهود انفسهم لم يعودوا يتحملونهم اصلا
اذا كان تغيير هؤلاء مطلب يهودي فمال الفرق بينك انت وبين نيتنياهو ايها الشرشف الشريف في جزيرة نتنياهو ؟ بل انتم امة ال 440 مليون اجمع !
وتلعبها بذقن وفضائية وجمهور صهيوني من الغوغاء بعد سيل الدماء الرهيب هذا في الشام وغيره...
فهل دينكم صار ما يكتبه خنازير الجزيرة والعبرية و BBC و LBC وMBC وبقية طاقم الغدر والاستحمار الماروني الصهيوني الفضائي ؟
لا حبيبي نحن اتباع من قال : [ لا والله لا تمسح عارضيك بمكة وتقول خدعت محمدا مرتين ]
ايامنا قادمة ... وسنرضي ربكم بهؤلاء المنافقين والمجرمين بينكم ان شاء الله 
