Does Saudi Arabia Have $750 Billion In Assets To Sell?

Tyler Durden's picture

As we reported over the weekend, based on NYT info, the Saudi finance minister said the kingdom would sell up to $750 billion in Treasury securities and other assets if Congress passed a bill that would allow the Saudi government to be held responsible for any role in the September 11, 2001 terror attacks. Senators Chuck Schumer of New York and John Cornyn of Texas introduced the "Justice Against Sponsors of Terrorism Act (JASTA) last fall, but the legislation seemed to gain some new traction after a related segment on 60 Minutes earlier this month.

The punchline, of course, was that Saudi officials indicated they would sell its dollar-denominated assets if the law passed to avoid having those assets frozen by American courts.

But does Saudi Arabia even have $750 billion of assets to sell?

For the answer we go to Stone McCarthy who note that while they can't answer that question definitively - recall that the exact amount of Saudi Treasury holdings remains a mystery as it is not broken out separately - here's what they do know from the Treasury International Capital (TIC) data.

First, the Treasury doesn't specifically report Saudi Arabia's holdings of U.S. securities. Instead, Saudi Arabia's holdings are combined with the holdings of the following countries into a category called Asian exporters: Bahrain, Iran, Iraq, Kuwait, Oman, Qatar and United Arab Emirates.

 

At the end of January, Asian oil exporters held $563.6 billion of U.S. securities, with Treasuries and U.S. equities accounting for 92.2% of the total. Treasury holdings totaled $268.2 billion.

 

 

These figures reflect holdings that Treasury can directly attribute to the Asian oil exporting countries. Regular readers of our updates on the TIC data know that foreign investors often hold securities at custodial institutions in other countries. For example, in February, the five major custodial centers held $1.1 trillion of Treasury securities. It's possible that Saudi Arabia has holdings of securities parked in custodial accounts, but there's no way to know that for sure from the TIC data.

 

Also keep in mind that as we have previously reported, the Saudis were said to have been one of the most aggressive sellers of US-denominated assets in late 2015 and early 2016 to fund the country's budget deficit as Petrodollar revenues collapsed.

So, in short, the answer is nobody knows for sure, but if the Saudis did have $750 billion several months ago, they probably have far less as of this moment.

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junction's picture

Yes, $750 billion in derivative assets.  Worth about $2 billion wholesale.

Cangaroo.TNT's picture

Maybe some smarter ZHer can answer this for me:  Sell $750B assets in exchange for what?  Dollars?  What purpose wuld that serve?  Riyals?  Wouldn't that crash their exports?

new game's picture

they could buy oil, hehe. seriously, they could buy yuan, yen, swissy, pounds, real estate in vancouver, london, 55 chevs, 707 hp chargers or, oh my god, gold...

gold to avoid frozen assets in the event of lawsuites, which will never happen. all just disco chit chat...

Abitcoinbrain's picture

I'm going to chalk this one up to caught in translation and think it should read 2 billion spread over 750 accounts all that's left!

 

 

 

0b1knob's picture

Selling near-zero-rate treasuries for (zero rate) cash is kind of pointless.

BuddyEffed's picture

Didn't their wheat bill just go up to 750 bill?

MrTouchdown's picture

There's so many moving pieces it's hard to say. The dollar would tank, thus making oil much more "expensive" (more dollars per barrel), which they could presumably sell to someone else, like the EU. In the US, interest rates would go up and crash Yellen's house of cards. Hitlery would lose the election. It might actually end up helping the US in the long run, but in the short term it would play havok with trade - for those importing from elsewhere, which is most everybody.

digiblader1's picture

It might be already starting to happen in the US dollar--commodity currencies in the Canadian and Aussie Dollars are up 15% in 3 months.. which is unprecedented, along with the huge decline in USD/JPY.

Something tells me serious trouble is ahead in the US and the world is increasingly moving away from the US dollar, thereby sending oil prices soaring in US dollars. Still waiting for the Treasury market to crash.. which should be soon if the US does something like try to cut off relations with the Saudis.

john.smith's picture

They could move to another currency. However, the Euro and Yen are hardly currencies you would want to be in, and the US could easily ask Europe or Japan to freeze Saudi Arabia's assets if it really wanted to.

zeropain's picture

they holding $250B in unicorn tech, cus that is what they lack and dont understand.  unicorns dont last in the desert.  i think they hold the T bills and flip the $250B and short tech.  thats what goldman advise them to do.

I am just fucking around we now they have $250B on ERX.  

Paul John Smith's picture

And that payout can be "fixed" with a reasonably priced nail gun from Home Depot.

zeropain's picture

you got that the other way around.  They put in $250B and leveraged to $3T of ETF's.

shining one's picture

Makes you wonder why they just took out a loan for 10 bill.

digiblader1's picture

Regardless, they can use their oil as a weapon as well if the US tries to pass that law by threatening an oil embargo on the US and certain allies against Saudi Arabia(similar to the Arab oil embargo of 1973) and refusing to sell in US dollars.. watch the US dollar collapse if this happens.

 

Budnacho's picture

You mean after gas goes up a buck and the recently released 9-11 documents make a US led invasion inevitable?...Saudi would last 5 Seconds from the shitstorm we would unleash.

the late idi armin's picture

then watch the salafist rebels in Syria  stream back to Riyahd while Nato invades libya and DC makes nice with  Iran. 

HoserF16's picture

$750 Billion? Not any more. Western Bankers stold their Gold Bullion that was stored in Switzerland. Tee, Hee, Hee... Fuck the Saudi's.Turn it into a glass parking lot. ASAP

 

Freddie's picture

The Cayman Islands has $250 billion in Treasuries?  LOL!  Worthless sheet and accounting fiction.

williambanzai7's picture

750 billion assholes

CHoward's picture

Saudis - fucking neanderthals!

Twox2's picture

This is all noise/cover for the real reason they need to sell treasuries. They're running huge deficits with the ongoing oil price war and can't fund the subsidies necessary to keep the natives from rising up and killing every member of the "royal" family.

Rock, meet hard place.

Chuckster's picture

Is this Donald's fault?  Bastard!

beijing expat's picture

What if the Saudis fields are in decline? Would this explain why they are supporting ISIS. By setting up a sister state in Iraq they are in a position to take the Iraqi fields. This could also explain their invasion of Yemen. It's the oldest play in the book.

mutthead52's picture

they have far less oil than advertised, yes, and they know it

mainstream media is useless's picture

Which makes this the ideal time to launch an IPO in aramco

CaptainMoonlight's picture

This is all bullshit. SA started drawing down billion dollar positions months ago and continues to do so. The light just was shown on these cockraches earlier than they thought it would. We need to freeze their accounts now.

 

BO is up to some evil per usual.

yogibear's picture

Yawn, the fed can print and buy up everything in less than a second.

Maestro Maestro's picture

And drive the value of the dollar to zero in a second.

Freddie's picture

Why the Iran pivot?  My guess is the Saudi oil fields are close to being dead.   They kept Iran off the market for 30+ yeras to screw consumers with high oil prices.  Saudi Arabia will blow up and guess where millions of poor Saudis will end up?  Europe, USA, Canada, etc./

northern vigor's picture

I notice the Rockefellers all of a sudden found religion and are getting out of oil...the Saudi fields must be dead and they're dumping Exxon before anyone knows.

 

Omega_Man's picture

sell the oil in YAWN

Yen Cross's picture

  Off cuff--- I suggested based on F/X reserves and the Saudi desire to devalue the Riyal, that the numbers don't add up.

 Anyone that does his homework knows the House of Saudomy is bluffing.

  In order to cover that trade, even if it's legged, would put tremendous upward pressure on the Saudi & Gamorah " pipe dream".

  750 bb is piker cash... That's 4-5 months of QE.

 

uhland62's picture

Just an idea, Persians/Iranians hate the Arabs. they shouldn't but they have done forever and that has not diminished. I am sure someone in Iran can be found who knows more about it. The only trouble is that you need to ensure they are not giving you 'propaganda' figures. Propaganda is everywhere, Bush II hired 27,000 to counteract anti Iraq and Afghanistan Wars. 

mary mary's picture

I can just see a few thousand ISIS soldiers asking themselves, "Well, sheeit, if House of Saad is actually sitting on $750-billion in treasuries, what the hey are we doing up here frying our brains out and getting shot at by Syrians, Iraqis, Russians, and Kurds?  Why don't we just start moseying, maybe a few hundred at a time, back into Riyadh?  And when enough of us get there, why don't we just pay us a little visit to some of those Saad princelings, who have those nice penthouses, gold Mercedeses, and harems of WHITE WOMENS?"

Maestro Maestro's picture

Drone this dude immediately, he makes too much sense!

I Write Code's picture

Goats ate them.  Worse than a bitcoin fail.

Automatic Choke's picture

That's the advantage of stacking gold -- kruggerands survive passage through a goat.

onmail1's picture

Thats good news

Saudis blowing up all the treasuries

(they are known to blow up money)

And if they have Zero Hedge ;-) 

Their economy is doomed

& ppl will rise up against them

Saudi Arabia may become another Libya

Hillary - 'We came we saw , he died (chuckle)'

'All men must die' - She didnt say that , I think , she thinks, if she ever thinks, other than her constant think of money (like a whore), but probably she thinks about 'Kill Bill' all the time, thinking all men as 'Bill' or rather Bills (I means wads of currency), So I think , what she thinks is to encash the situation , she thinks she is in, as well as kill every man thinking of them as 'Bill', so she uses her thinking as her weapon, if she ever thinks, that makes us come back to the start of loop Hah ha

northern vigor's picture

We could solve a lot of problems in the world if we stopped buying friggin' Saudi oil in North America.

just the tip's picture

we only get about 10% from SA.

https://www.eia.gov/dnav/pet/pet_move_impcus_a2_nus_ep00_im0_mbbl_m.htm

 

We could solve a lot of problems if the world stopped buying friggin' Saudi oil.

 

fixed it.

Maestro Maestro's picture

Why pay evil murderous criminals anything? Take their lives and their oil too.

Maestro Maestro's picture

We could solve the problem altogether if we chemically sterilized all Americans, ISIS members and Muslim Saudi Arabians to rid the universe of your pestilence.

We don't want any of you on this planet.

Fuck off.

luckylongshot's picture

Whether Saudi has $750 Billion in treasuries to sell or not is utterly irrelevant. What is important is that the Fed will buy everything they sell. This means there is no risk of rising interest rates, no risk to the dollar, no risk to the economy and no reason even to mention this possibility as being a threat.

EddieLomax's picture

Yep, selling the treasuries will do jack squat with the fed as the buyer of last resort.  The only thing that would really mess things up in the short term would be if they sold dollars and brought something else, since every other fiat currency looks as bad or worse than the dollar then that would likely be a total disaster.

Precious metals lack liquidity for such a large chunk of cash to be thrown at it, they would lose so much trying to move into them that they would only get a fraction of their 750 billion back.  Like it or not the Saudi's are back of the bus with their wealth going to the same destination as the US right now, and the only way to change that is slowly like the Russians have done.

Maestro Maestro's picture

Why do you think gold went from $1050 to 1250 in the space of a few months?

The US government, CFTC, JPM, Goldman Sachs et al, are traitors for having turned over the strategic assets of gold and silver essentially for free (for undefined and illegal [Article 1 Section 10 of the US Constitution] fiat dollars) to the enemy of the United States of America, in other words, the Muslim Saudi Arabs.

Maestro Maestro's picture

Spoken truly like an arrogant and delusional American.

Yes, you can continue violating your own laws, namely the US Constitution as it's irrelevant to you as well, and issue undefined and illegal dollars ad infinitum and buy all the Treasuries sold by foreign and domestic investors.

But you cannot force a single person to accept dollars in return for his labor and his goods once foreign governments openly repeat what I just said: dollars are undefined and illegal.

Who wants to concede his hard-earned wealth against a piece of the crime of the century, the fraudulent and illegal Federal Reserve Notes aka as the dollar?

Then you won't even be able to wipe your behind with your treasuries as they consist only of stray electrons in a traitor's computer.

Sandmann's picture

When the Gold Rubel and Gold Yuan become the paycheck of choice in the USA it is all over

monad's picture

I'm going to have to cash out my pension before June for the same reasons...