Biggest U.S. Pension Sold Facebook, Bank of America, and Disney Stock. Here’s What It Bought.

By Ed Lin May 16, 2020

Calpers reduced its investment in Facebook to 5.4 million shares.

Photograph by Sean Gallup/Getty Images

The largest U.S. public pension by assets made some big moves in its major stock investments in the first quarter, a perilous period for public pensions as the coronavirus pandemic spread.

California Public Employees’ Retirement System, known as Calpers, lowered its investments in Facebook (ticker: FB), Bank of America (BAC), and Walt Disney (DIS) stock in the first three months of 2020. The pension also bought Verizon Communications stock (VZ). Calpers disclosed the trades in a form it filed with the Securities and Exchange Commission.
Calpers declined to comment on its stock transactions.

Facebook stock slipped 18.7% in the first quarter, but in the second through Wednesday’s close it has more than erased that loss with a 26.4% rise. In comparison, the S&P 500 index has gained 10.8% in the second quarter.

The social-media giant got a boost after the company noted a rebound in advertising revenue in April . Facebook also beat first-quarter revenue estimates.

The pension sold 300,400 Facebook shares in the first quarter, lowering its investment to 5.4 million shares.

Calpers sold 1.54 million Bank of America shares in the quarter to end March with 18.4 million shares.
Bank of America stock crumbled 39.7% in the first quarter but has eked out a 1.0% gain in the second.

The banking giant reported a first quarter that was roiled by rising credit costs. But one observer told us that Bank of America doesn’t get “enough credit for how much it de-risked its loan book” since the last financial crisis.

The pension sold 1.31 million Disney shares in the first quarter to cut its investment to 3.93 million shares.

Disney stock crumbled 33.2% in the first quarter, as its theme parks have closed , and the lack of live sports have hobbled its broadcast operations. Shanghai Disneyland reopened on a limited basis earlier in May after being closed for nearly four months. In the second quarter, Disney stock has gained 12.9%.

Calpers bought 3.1 million additional Verizon shares in the first quarter to lift its investment to 23.6 million shares of the telecom and media giant.

Verizon stock slipped 12.5% in the first quarter, and it has managed to rise 1.8% in the second. We’ve noted that cord-cutting continues to hurt Verizon and peers , but the company’s first-quarter earnings were strong .

Inside Scoop is a regular Barron’s feature covering stock transactions by corporate executives and board members—so-called insiders—as well as large shareholders, politicians, and other prominent figures. Because of their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.

$1.6T in century-old Chinese bonds offer Trump unique leverage against Beijing

THE BONDS ARE LIKE CONFEDERATE DOLLARS

'Americans pay their debts. (ROFLMAO)

China needs to do the same'
By Jonathan GarberFOXBusiness

Published May 14

China owes US bondholders $1.6T in century-old bond debt: American Bondholder Foundation president

American Bondholder Foundation President Jonna Bianco discusses evening out bond debt with China.

As the Trump administration seeks ways to penalize China for its handling of the COVID-19 pandemic, it need look no further than Tennessee.

The Lewisburg, Tennessee-based American Bondholder Foundation holds $1.6 trillion of century-old Chinese debt, including interest, dating to before the founding of the communist People’s Republic of China, that it wants the administration's help in redeeming. There is an estimated $6 trillion or more of the debt outstanding worldwide.

The bonds were issued by the Republic of China -- which ousted the imperial government in a coup -- as far back as 1912 and backed by gold; they were defaulted on in 1938. The ROC government fled to Taiwan, where it remains the official ruling body, after Mao Zedong’s communist party took over following the 1949 end of the revolution.

Beijing maintains Taiwan is part of China, and under international law, successor governments are responsible for the debts of their predecessors.

President Trump is a “'promises made, promises kept' president, and he said to my face that he was going to do this transaction, do this deal, and hold China accountable,” Jonna Bianco, president and chairwoman of the American Bondholder Foundation, told FOX Business.

Bianco, who has power of attorney for 95 percent of the thousands of U.S. bondholders, said making China repay its debt would “not be punishment,” but rather a basic fundamental of international finance.

There's international precedent for such a move: Prime Minister Margaret Thatcher ordered Beijing in 1987 to make good on the bonds owned by Brits or lose access to the British capital markets. Then-Chinese President Li Xiannian’s government obliged, reaching a settlement of 23.5 million British pounds.

By paying some bondholders and not others, Beijing is technically in selective default, according to the ratings of bond-risk firms Moody’s, Standard & Poors and Fitch. Until China pays, it cannot sell debt on the international market, Bianco said.

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The U.S. and China normalized relations in 1979, but cables dating as far back as May 1973 viewed by FOX Business show the State Department told Beijing that while the debt didn’t have to be paid at that time, it would not be forgiven.

There have been attempts to litigate pre-Communist party bonds in the past.

A class-action lawsuit brought by Hukung railway bondholders was thrown out in 1979 under the Foreign Sovereign Immunity Act, which establishes limits on lawsuits against foreign governments.

Since then, developments in a few cases have suggested sovereign immunity might not be as strong with regard to certain types of debt, but those cases could be tied to specific language within the bond contracts themselves.

“It's a difficult suit to bring just because at this point, it's really very old,” Odette Lienau, associate dean and professor of law at Cornell University, told FOX Business. “Technically, these don't necessarily expire, but in practice, doing something like this is going to be difficult. You have to be legally creative with how you would do it.”

Bianco spent a year researching the issue and working with the White House, State Department, Securities and Exchange Commission, Federal Trade Commission, former Senate Majority Leader Bill Frist of Tennessee, former Congressman Bart Gordon and former Congressman Walter Jones when the American Bondholder Foundation was founded in August 2001.

While not widely accepted in international law, the doctrine of odious debt, which is akin to China’s argument, states national debt incurred by an illegitimate regime is not enforceable.

The U.S. made a similar argument when faced with the burden of Confederate obligations following the end of the Civil War. Congress in 1868 passed the 14th Amendment to the U.S. Constitution, which says “neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States.”

While there’s a “plausible legal argument” for redeeming the bonds, Lienau said, it’s “politically difficult.” Bianco, who met with Trump and Treasury Secretary Steven Mnuchin about the matter in 2018 while the U.S. and China were negotiating a phase one trade deal, said the U.S. Treasury could take the bonds in and use them to offset the nation’s debt with China.

The U.S. might then say it considers the bonds paid, but China could still dispute that, bringing the two sides back to square one.

"Ultimately, this is going to have to be some kind of negotiated settlement if it gets taken up."- Odette Lienau, associate dean and professor of law at Cornell University

A spokesperson for the Treasury Department did not respond to FOX Business’ request for comment.

The Foreign Bondholders Protective Council, established under former President Franklin Roosevelt in 1933, helps U.S. citizens collect on defaulted bonds from foreign governments and has settled 47 cases. If the group were to successfully resolve this case, it would be the 48th.

Bianco’s clients would be willing to take “pennies on the dollar,” she said, letting the rest go toward helping repay a national debt that has swelled to more than $25 trillion as policymakers have taken unprecedented action to shield the economy from fallout related to COVID-19.

The government has extended trillions of dollars of aid to combat record job losses and the sharpest contraction of the post-World War II era, caused by a virtual shutdown of the U.S. economy through stay-at-home orders intended to limit the virus' spread.

Both the Trump administration and some members of Congress have in recent weeks been looking at ways to punish Beijing for what they call an insufficient initial response to COVID-19, first identified in Wuhan, China, at the end of last year.

FOX Business learned on Monday that the administration is forging ahead with plans to divest $4 billion of worth of equity stakes in Chinese companies held by the Federal Retirement Thrift Investment Board. But other options are limited.

“There is almost no clean-cut tool that you can use to put pressure on China without hurting ourselves,” Xiaobo Lu, political science professor at Barnard College of Columbia University, told FOX Business. 

BECAUSE CHINA AND JAPAN ARE TWO OF THE USA LARGEST CREDITORS

Earlier this month, Sens. Martha McSally, R-Ariz., Marsha Blackburn, R-Tenn. and Steve Daines, R-Mont., introduced the Stop China-Originated Viral Infectious Disease Act, which, if passed, would give Americans the right to sue China for the damage COVID-19 has caused to the economy and human life.

Another group of senators, led by Lindsey Graham, R-S.C., have introduced the COVID-19 Accountability Act, which would give Trump the authority to impose sanctions and travel bans, restrict loans to Chinese businesses by U.S. firms and ban Chinese companies from listing on U.S. stock exchanges.

Lu pushed back on the feasibility of those options, however, noting that the U.S. has “already done quite a bit” in terms of sanctions and that Chinese companies can list their shares in other international markets.

Fighting to collect payment on the aging Republic of China notes would have none of those drawbacks, though it might prove as arduous a struggle as negotiating a trade deal. Still, B

Texas fears losing oil-rich lands in Chinese takeover of weakened energy companies

Jonathan Garber
Fox Business May 16, 2020

Plunging prices have wreaked havoc on Texas oil companies struggling to avoid a wave of bankruptcies that has ravished the industry during the past five years, leaving them ripe takeover targets for rivals from China and elsewhere.

Ninety-eight exploration and production companies in Texas with $75.7 billion of debt filed for bankruptcy from 2015 through 2020, according to the international law firm Haynes and Boone.

That number is expected to grow even larger after West Texas Intermediate crude oil prices plunged 52 percent this year as stay-at-home orders designed to slow the spread of COVID-19 wiped out 30 million barrels per day of demand while Saudi Arabia and Russia ramped up production amid a price war.

The companies’ vulnerability to foreign buyers raises the risk that the U.S. might lose control over valuable oil-producing lands in the Permian Basin, a swath of land in western Texas and southeastern New Mexico that helped the country become the world's largest crude producer amid a shale boom.

“We have discovered this volume of natural gas and oil that is more than any time in history,” said Wayne Christian, commissioner of the Texas Railroad Commission -- the agency that regulates the state's oil and gas industries.

“I believe it's a national security concern to allow unfriendly foreign countries to come in and buy land and oil in Texas and the United States," he told FOX Business.

OIL-RICH ALASKA WARY OF SAUDI POWER PLAY IN BATTERED CRUDE MARKET

A 2018 oil discovery in the Permian uncovered 46.3 billion barrels of crude, 281 trillion cubic feet of gas, and 20 billion barrels of natural gas liquids, according to an assessment by the U.S. Geological Survey.

The discovery effectively doubled America’s oil and gas reserves and puts the country on a path for years of energy independence. A separate estimate from RS Energy Group found the discovery could be as large as 230 billion barrels.

The oil industry is critical for the Texas economy, accounting for $16.3 billion of revenue in 2019 and about 10 percent of the state’s labor force. An oil worker makes about $132,000 a year, 1.6 times the state’s average wage.

Exxon Mobil, Chevron, and BP are the major players in the industry, but there are also hundreds of companies that produce less than 1,000 barrels of oil per day.

The scope of the industry reaches far beyond the oil and gas producers, also including midstream companies that operate pipelines, service rigs and more.

To help smaller companies navigate the industry's crisis, Christian said Texas is working on measures that include cutting regulations and permit costs.

When the industry is prospering, such firms get bought out at a premium by the big international companies such as Exxon Mobil, leaving money in Texas and giving workers bonuses, Christian said.

When markets sour, however, the firms can be snapped up at fire-sale prices.

“The federal government should watch very carefully and raise their standards on who can buy,” Christian said.

China and other countries are already “starting to look for deals,” said Malcolm O’Neil, international practice co-leader at the law firm Arent Fox.

He said that while recent volatility in oil prices has left some Chinese companies "cash poor," those that have money are “going to be seeking bargains.”

The uncertainty surrounding the outcome of the 2020 election will cause Chinese firms to “explore deals now, but wait to bargain-hunt until companies are really hurting” and there is more clarity on the political front, he added.

Should President Trump win re-election, prospective acquisitions might be less appealing to Chinese buyers, given his administration's prickly relationship with Beijing and efforts to limit Chinese control of vital U.S. resources.

Any oil deal, unless it’s rudimentary, will likely involve the Committee on Foreign Investment in the United States (CFIUS), which would require arduous reviews. U.S. law prohibits foreign companies from directly holding many oil, gas and mineral leases, but does allow them to form U.S. corporations to make purchases.

Chinese acquisitions of U.S. oil and gas companies have faced increased scrutiny since China National Offshore Oil Corporation in 2005 attempted a takeover of the El Segundo, California-based explorer Unocal, now a subsidiary of Chevron, causing public uproar.

PLUNGING OIL PRICES, CORONAVIRUS FUEL BUDGET CRISIS IN PETROLEUM-RICH ALASKA

While that deal was blocked, the Chinese firm Yantai Xinchao Industry Co. in 2015 received CFIUS approval to forge ahead with a $1.3 billion purchase of oil assets in the Permian Basin owned by Tall City Exploration and Plymouth Petroleum.

Stewart Glickman, an energy analyst at New York-based CFRA Research, told FOX Business that barring a “rapid V-shaped recovery in oil prices,” there are going to be a “fair number of new Chapter 11 filings.”

While Texas is an attractive investment destination for companies from China and elsewhere, it’s difficult for them to “swoop in” and start acquiring acreage “like a vulture feasting on a carcass,” he said.

Though companies from China, Saudi Arabia and elsewhere may have experience in oil and gas, shale is a “U.S. phenomenon,” Glickman noted.

A more plausible way for foreign companies to gain access to the rock, according to Glickman, is to enter a joint venture that gives them financial exposure but not operational exposure. He added that such a route would also be the way to go for those seeking to gain access through midstream and downstream businesses.

But while the tactic might help eager overseas buyers reach lucrative deals, such developments are precisely what Christian, the Texas railroad commissioner, hopes to avoid.

“I don’t want to wind up five years from now with, all of a sudden, some foreign country shutting down production in Texas because they own it, and prefer buying from their own reserves overseas,” Christian said. “I think that would be inefficient use, and I would think it would threaten national security.”

Saudi Sovereign Wealth Fund Seeking $10 Billion Margin LoanHarry Wilson, Matthew Martin and Dinesh Nair
Bloomberg May 16, 2020

(Bloomberg) -- Saudi Arabia’s sovereign wealth fund is planning to borrow about $10 billion by pledging some of its stakes in SoftBank Group Corp.’s technology investment vehicle to shore up liquidity, according to people familiar with the matter.

The Public Investment Fund, which has been on an overseas shopping spree recently, is speaking with investment banks about a margin loan backed by some of its investments in the $100 billion Vision Fund, the people said, asking not to be identified as the matter is private. While discussions with banks are ongoing, it may not materialize in a deal, and the fund may also decide against raising the loan, the people said.

The Saudi wealth fund declined to comment on the margin loans.

PIF is in need of capital as it embarks on an investment spree that has seen it build stakes in some of the world’s largest companies since the start of the coronavirus pandemic. On Friday, it disclosed stakes in companies including Facebook Inc., Boeing Co. and Citigroup Inc.

The fund is looking into “any opportunity” arising from the economic wreckage of the crisis, its governor, Yasir Al-Rumayyan, said at a virtual event in April. The fund expects to see “lots of opportunities,” he predicted at the time, citing airlines, energy and entertainment companies as examples.Behind the scenes, as coronavirus outbreaks disrupted commerce and drove stock prices to their lowest levels in years, the fund reassigned staff to find bargains to broaden its global portfolio, people familiar with the plan have said. The investments disclosed in a quarterly filing Friday amount to a bet that marquee names of the corporate world will rebound as many facets of life return to normal.

PIF has targeted some of the companies hit hardest in the crisis, including cruise operator Carnival Corp. and hotel owner Marriott International Inc. It’s also broadened its natural resources exposure with stakes in Suncor Energy Inc. and Canadian Natural Resources Ltd, according to the filing, which outlined investments in nearly $10 billion worth of U.S. equities.

Simultaneously, the recent plunge in oil prices is pushing sovereign wealth funds in the region to find ways to unlock liquidity. The move by PIF follows a similar plan by Qatar’s sovereign wealth fund to raise 7 billion euros ($7.6 billion) against some of its most high-profile European equity investments.

PIF, the backbone of Saudi Arabia’s economic transformation plan, is the largest contributor to the Vision Fund after committing $45 billion to invest along with SoftBank founder Masayoshi Son in companies such as WeWork, Oyo Hotels and Uber Technologies Inc.

The loan could act as a way for PIF to raise money against its investments in the fund, which has been going through challenging times recently. The Vision Fund, which contributed more than half of the conglomerate’s profit a year ago, has swung to record losses.

In a margin loan, a borrower secures the debt by pledging an asset with the understanding that they’d need to pay up if the value of the collateral declines. The lender can typically sell some of the collateral if the borrower is unable to provide the cash. Banks compete for these deals because of the fees associated with structured financing.

(Adds details on investments throughout)

©2020 Bloomberg L.P.


https://plawiuk.blogspot.com/2020/05/saudi-sovereign-fund-discloses-stakes.htm

https://plawiuk.blogspot.com/2020/05/saudi-wealth-fund-builds-stakes-in.html

Saudi Wealth Fund Builds Stakes in European Energy Giants

Matthew Martin and Dinesh Nair, Bloomberg News

Employees walk on the one of the four connected platforms on the Johan Sverdrup oil field off the coast of Norway in the North Sea, on Tuesday, Dec. 3, 2019. Sverdrup's earlier-than-expected start in October broke a long trend of underperformance for Norway's overall oil production. Photographer: Carina Johansen/Bloomberg , Bloomberg

(Bloomberg) -- Saudi Arabia’s sovereign wealth fund has built up stakes in four major European energy firms, including about $200 million in Equinor ASA, as the oil-rich kingdom navigates the coronavirus pandemic and plummeting crude prices.

The Public Investment Fund amassed shares in Norway’s largest producer mostly through the open market last week, according to people with knowledge of the matter who asked not to be identified, adding that it’s unclear exactly when the fund bought the holding or if it’s still buying. It also bought stakes in Royal Dutch Shell Plc, Total SA and Eni SpA, according to another person with knowledge of the matter.

Saudi Arabia’s $320 billion sovereign wealth fund, run by Yasir Al-Rumayyan and controlled by Crown Prince Mohammed bin Salman, is taking advantage of a slump in stock market valuations as it steps up deal-making to become the world’s biggest manager of sovereign capital, the people said. The fund last month built an 8.2% stake in cruise operator Carnival Corp. after its shares slumped due to the fallout of the coronavirus pandemic.

The PIF is a key part of the crown prince’s efforts to diversify the Saudi economy away from its dependence on oil and has made a series of high-profile investments in recent years. Its amassed holdings in Uber Technologies Inc. and Tesla Inc., as well as committing giant sums to Softbank Group Corp.’s Vision Fund.

Oil Policy

Still, building stakes in some of the largest international oil companies is unusual, especially as Al-Rumayyan also heads up state-owned crude producer Saudi Aramco. He’s also a close adviser to the crown prince, who sets the kingdom’s oil production policy and influences prices globally.

Representatives for the PIF and all of the oil companies declined to comment.

On top of the slump of oil prices and a meltdown in global markets, Gulf sovereign wealth funds are channeling some of their billions back home to counter slowing economic growth triggered by the coronavirus. The decline in assets from funds in countries such as Qatar, Abu Dhabi and Saudi Arabia could exceed $300 billion this year, according to the Institute of International Finance, the industry’s global association.

In contrast to 2015, the last time crude prices collapsed, Saudi Arabia will likely focus on borrowing rather than drawing down PIF funds, according to the IIF. Last month, Finance Minister Mohammed Al Jadaan said the kingdom would fund an expected larger deficit through borrowing more rather than drawing down reserves.

Equinor shares slumped just over 30% this year before rising 18% last week, amid a broad recovery for European energy majors, giving the company a current market value of about $44 billion.

The Wall Street Journal was first to report that the PIF has acquired stakes in Shell, Total and Eni, worth about $1 billion along with the Equinor holding, citing people familiar.

Norwegian daily Finansavisen this week reported that JPMorgan Chase & Co.’s unit in Saudi Arabia had bought 14.5 million shares in Equinor on behalf of an unnamed client, followed by another 6.4 million shares.

(Updates with details in second paragraph.)

©2020 Bloomberg L.P.


https://plawiuk.blogspot.com/2020/05/saudi-sovereign-fund-discloses-stakes.html

https://plawiuk.blogspot.com/2020/05/saudi-sovereign-wealth-fund-seeking-10.html

https://plawiuk.blogspot.com/2020/05/saudi-wealth-fund-builds-stakes-in.html

Saudi sovereign fund discloses stakes in Citi, Boeing, Facebook

May 16, 2020DUBAI, May 16 (Reuters) - Saudi Arabia's sovereign wealth fund, the Public Investment Fund (PIF), has purchased minority stakes in major U.S. companies including Boeing, Facebook and Citigroup, according to a U.S. regulatory filing.

PIF disclosed a $713.7 million stake in Boeing, around $522 million in Citigroup, a $522 million stake in Facebook, a $495.8 milllion stake in Disney and a $487.6 million stake in Bank of America, the Securities and Exchange filing on Friday showed. It also disclosed a small stake in Berkshire Hathaway.

PIF also disclosed an $827.7 million stake in oil company BP , which has American Depstory Receipts (ADRs) listed in the United States.

The $300 billion Saudi sovereign fund has been buying minority stakes in global companies, taking advantage of market weakness in the wake of the coronavirus outbreak.

PIF was not immediately available to comment.

Last month it disclosed an 8.2% stake in coronavirus-hit Carnival Corp< l, sending the cruise operator's shares nearly 30% higher.

The Saudi fund earlier this year bought stakes in Royal Dutch Shell, Total, Eni and Equinor, a source familiar with the transactions told Reuters on April 9.

PIF already has stakes in Uber Technologies and electric car company Lucid Motors.

(Reporting by Saeed Azhar and Kanishka Singh; Editing by Andrew Heavens)

Saudi Arabia Wealth Fund Buys Boeing, Citi, Disney Stakes

Pierre Paulden
Bloomberg May 16, 2020

(Bloomberg) -- Saudi Arabia’s sovereign wealth fund said in April that it was looking into “any opportunity” arising from the economic wreckage of the coronavirus crisis. A regulatory filing Friday shows how the fund spent billions of dollars this year on stocks.

The $320 billion Public Investment Fund, which until five years ago was a holding company for government stakes in domestic businesses, disclosed an $827.8 million stake in BP Plc, a $713.7 million investment in Boeing Co. and $522 million positions in both Citigroup Inc. and Facebook Inc. at the end of the first quarter. Other bets include $495.8 million on Walt Disney Co. and $487.6 million on Bank of America Corp.

The PIF is looking into “any opportunity” arising from the economic wreckage of the crisis, the fund’s governor, Yasir Al-Rumayyan, said at a virtual event in April. The fund expects to see “lots of opportunities,” he predicted at the time, citing airlines, energy and entertainment companies as examples.

Behind the scenes, as coronavirus outbreaks disrupted commerce and drove stock prices to their lowest levels in years, the fund reassigned staff to find bargains to broaden its global portfolio, people familiar with the plan have said. The investments disclosed in a quarterly filing Friday amount to a bet that marquee names of the corporate world will rebound as many facets of life return to normal.

“PIF is a patient investor with a long-term horizon,” according to a statement from the fund. “We actively seek strategic opportunities both in Saudi Arabia and globally that have strong potential to generate significant long-term returns while further benefitting the people of Saudi Arabia and driving the country’s economic growth.”

Other holdings described by the fund include a $513.9 million investment in hotel owner Marriott International Inc. that’s even greater than the PIF’s previously disclosed wager on cruise operator Carnival Corp. Both companies are contending with a virtual shutdown in global travel. Similarly, the fund gathered a $416.1 million stake in concert promoter Live Nation Entertainment Inc., which faces bans on large gatherings.

The fund also amassed shares of Canadian oil sands players Suncor Energy Inc. and Canadian Natural Resources Ltd., on top of investments that previously emerged in Equinor ASA, Royal Dutch Shell Plc, Total SA and Eni SpA. The regulatory filing disclosed the fund held almost $10 billion of U.S. equities, including an approximately $2 billion position in Uber Technologies Inc.

The bargain-hunting contrasted with retreats by the likes of Warren Buffett’s Berkshire Hathaway Inc., which previously announced a full exit from investments in four major U.S. airlines. On Friday, Berkshire also disclosed that it sold off most of a longtime investment in Goldman Sachs Group Inc. and trimmed stakes in companies including JPMorgan Chase & Co.

Coincidentally, the fund bought a $78.4 million stake in Berkshire as well.

The PIF’s mandate was broadened in 2015 by Crown Prince Mohammed bin Salman to include international investments to support economic diversification.

(Updates with comment from PIF in fifth paragraph.)


SEE
https://plawiuk.blogspot.com/2020/05/saudi-wealth-fund-builds-stakes-in.html

https://plawiuk.blogspot.com/2020/05/saudi-wealth-fund-builds-stakes-in_16.html

Saudi Wealth Fund Builds Stakes in Canadian Oil Sands Giants

Michael Bellusci Bloomberg May 15, 2020


(Bloomberg) -- Saudi Arabia’s sovereign wealth fund built stakes in two major Canadian oil sands players during the energy market rout.

The Public Investment Fund amassed shares in Calgary-based Canadian Natural Resources Ltd. and Suncor Energy Inc., with a 2.6% and 2% stake in the companies, respectively. PIF is now the eighth largest shareholder in Canadian Natural and 14th largest in Suncor, according to data compiled by Bloomberg.

The fund also bought stakes in Equinor ASA, Royal Dutch Shell Plc, Total SA and Eni SpA, according to a Bloomberg report earlier in April. Saudi Arabia’s $320 billion sovereign wealth fund is run by Yasir Al-Rumayyan and controlled by Crown Prince Mohammed bin Salman.Read more: Saudi Wealth Fund Builds Stakes in European Energy Giants

The Saudi purchase is disclosed at a time when Norway’s wealth fund is dumping oil-sands companies. The latter said this week it will exclude Canadian Natural, Cenovus Energy Inc., Suncor, and Imperial Oil Ltd. over concerns about carbon emissions.

Canadian oil producers have announced that almost 700,000 barrels per day of oil production is offline amid low prices and weak demand because of the coronavirus pandemic.

Shares of Canadian Natural have lost 43% this year, while Suncor is down 46% versus a 15% drop for the S&P/TSX Composite Index.

Suncor elected to slash its quarterly dividend 55% earlier this month, while Canadian Natural maintained its current payout.
SEE
https://plawiuk.blogspot.com/2020/05/saudi-sovereign-fund-discloses-stakes.html

THE RIGHT TO BE GREEDY REDUX

Recently conservatives in Canada and the USA have been voicing concern that heaven to betsy folks might be making more money with the Canadian CERB and topped up EI while in the States it's the top up to Unemployment as well as PPP etc. 

That's right the average wages for most workers are at $15 an hour as minimum wage, a real living wage should be $20-$25 per hour based on a monthly basket of goods to keep you alive. Workers in meatpacking plants and hospital staff in US hospitals make $15 per hour, whereas in Canada the wages are closer to the later.  

The right wing is correct to be concerned that with all the top ups and in fact in Canada the CERB being $2000 per month is a Universal Basic Income, which causes our ex paper boy leader of the Conservatives to worry someone might being getting more than they should. That of course would never cross his mind to say about a McCain or a Galen Weston or an Irving. 

Suddenly with workers making more money with CERB or EI they might not want to go back to work cries the conservative. So lets look at that closer. Why would the workers not want to go back to a low paying job, and why is that job low waged, below even $15 per hour if that wage is not the provincial or state rate. So it seems to me the conservative should be wagging his finger in the direction of the bosses, and tell them that if they want to keep their workers they have to offer them more!!  Not demand they take less than they are making now which is between $15 and $25 pr hour and in fact I would suggest that benefits be tossed in too and some flex time.

Our conservative views the employee as a thief, of course they do they represent their class the small shop keeper.

But the real thief is the employer, the boss who would pocket the difference between minimum wage and the days earnings. 

The real kicker though is the fact that as workers earning a living we spend our paychecks as soon as we get them, we have barely $400 in our bank accounts between us and poverty, but we should save for that rainy pandemic day.

When we spend our earnings as wage slaves we suddenly Cinderella like change into the mighty Consumer the very soul and essence of late capitalism. 

The conservative completely fails to understand that it is not shovels in the ground, not pipelines, or Wall St that keeps capitalism functioning, it is me and you with our credit cards, our car payments and our rent or mortgages, let alone our entertainment and food purchases. https://edmontonsocialplanning.ca/

What part of Capitalism collapsed because of the Coronavirus, the consumer capitalist market place. Wall St. and the other stock exchanges didn't even as they crashed and rose again like the Mary Ellen Carter.  The bourse is divorced from reality and main street, moving money to make more money, M=C=M regardless if the actual political economy is crashing or not, they sell the market short in that case.

When the Oracle of Omaha Warren Buffet and his Berkshire Hathaway spend millions and billions investing that does not drive capitalism as much as his munching on a ice cream bar and drinking a coke, the later are the real capitalist exchange.

Late capitalism is the great equalizer, Bill Gates makes millions daily in the stock market, but that is not when he really makes capitalism function, its when he and Melinda go out for a Big Mac at the drive through. It is when they go to Starbucks or order something from Amazon, when they consume. In late capitalism with finance capital dominating the market the real marketplace is that of consumption not production or even wealth creation it is us consuming and getting into debt.

The minimum wage worker contributes more to capitalism functioning than a hundred Jeff Bezos. It is our consumption that drives the post modern market place, and the more money in our hands the better off capitalism will be as we have seen for the past two months of this pandemic panic.

SEE 

THE RIGHT TO BE GREEDY

THE RIGHT TO BE LAZY

Trump’s grade on the economy tumbles from B to C to 'F'

Rick Newman Senior Columnist Yahoo Finance May 13, 2020

For most of his presidency, Donald Trump’s grade on the Yahoo Finance Trumponomics Report Card was a respectable B. But in one month it has dropped to C, and it may be heading to D.

Since Trump took office, Yahoo Finance has been grading the Trump economy compared with six prior presidents, using data provided by Moody’s Analytics. We use common metrics such as job gains, earnings and stock values, measuring improvements since Trump took office against prior presidents at the same point in their first term.

The coronavirus outbreak and the business shutdowns it has caused have dramatically eroded Trump’s standing against other presidents. Before the outbreak, Trump ranked first in earnings gains, second in manufacturing employment, and third in total employment. This is where he ranks now:

View photos

Sources: Yahoo Finance, Moody's AnalyticsMore

Here’s a breakdown for each of the six indicators we track:

Total employment. In February, job gains under Trump totaled 6.8 million, third best after Jimmy Carter and Bill Clinton at the same point in their presidencies. But massive job losses during the last two months have wiped out all those gains and more, for a net job loss under Trump of 14.6 million. That’s the worst performance of any of the seven presidents, going back to Carter, by far. The second worst performance was a loss of 1.3 million jobs at the same point in George W. Bush’s presidency, followed by 221,000 job losses under Obama. Both of those presidents began their first terms with a troubled economy. Trump, by contrast, inherited a relatively strong economy.

Manufacturing employment. Manufacturers have shed 881,000 jobs under Trump, which is not as bad as the 2.8 million lost under George W. Bush or the 1.2 million lost under his father, George H. W. Bush. But data during the next two months is almost certain to show many more lost jobs, so Trump could fall another notch or two here.

Average hourly earnings. Trump’s record here is the best, and it will probably stay that way. Wages tend to be “sticky,” even during downturns, since employers are more likely to shrink their workforce than cut pay. Trump’s strength on this measure probably comes from the fact that he took office in the eighth year of an economic expansion, with the labor market tightening, forcing wages up. Overall, wage growth has slowed during the last 30 years, generating weak numbers for most of the seven presidents.

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Graphic by David FosterMore

Exports. This has been a weakness for Trump since he began imposing tariffs on China and other importers in 2018, triggering retaliatory measures that have reduced trade overall. Making that worse, U.S. exports typically fall during recessions, since foreigners buy less American-made stuff.

The S&P 500 stock index. Stocks are down 11% this year, but they’ve rebounded from March lows as investors anticipate an economic recovery later this year. Stocks are also benefiting from massive amounts of Federal Reserve monetary stimulus meant to ease liquidity pressures and restore confidence in markets.



GDP per capita. In February, Trump ranked second best on this metric, but with a big falloff in output during March, he has fallen to third worst. GDP numbers for the second quarter are going to be dramatically worse, probably worse than any single quarter during the Great Depression in the 1930s. So Trump is likely to end up with the lowest score in this category by summer.

If Trump notches the lowest marks for manufacturing employment and GDP, and everything else stays the same, his grade will fall to D+, according to our methodology. If the stock market executes another nose dive, Trump’s grade would fall to a straight D. There could also be improvements in some of these metrics, but economists don’t think that’s likely until the third quarter at the very earliest. Many economists don’t expect meaningful improvement in the economy until 2021.

We’ve said all along that presidents deserve less blame (or credit) for what happens to the economy under their watch than they typically get. Many forces presidents can’t control—including microscopic pathogens — determine the course of the economy. But voters hold the president accountable for the economy anyway, with no president since Calvin Coolidge in 1924 winning reelection in the midst or aftermath of a recession. Trump faces steep odds in November, and they’re probably going to get steeper

Working from home impact on business productivity

Working from home might not be so bad for productivity after all.

A new survey from tech workplace advisory firm Valoir reveals that the shift to working from home might only be reducing overall worker productivity by a marginal 1%.

The survey, which polled more than 325 workers from around North America, also showed that about 40% of workers would prefer to work from home in the future rather than return to an office environment.

Interestingly, the survey also found parents to be reporting a smaller drop in productivity compared to workers without children. Parents reported a 2% drop to productivity in the work-from-home environment compared to the 3% drop for workers without kids at home.

Kids are reportedly less of a distraction when working at home than social media, according to a new survey.More

“Parents have a slightly bigger productivity hit of 2% on average, but the folks that really were hit were those who were working alone without anybody else in their house to talk to,” said Valoir CEO Rebecca Wettemann.

Workers surveyed generally reported the negatives of distractions at home being offset by the positive that came with eliminating commute time. On average, workers reported a nearly 10-hour workday, starting at 8:15 a.m. and ending around 6 p.m.

While some workers enjoyed eliminating the workplace distractions, the most common distraction at home has become social media, with workers estimating it eats up about two hours of productivity.

“People are getting a lot of distractions from places that you might not expect, with social media being the biggest distraction folks commented on even for those folks who had kids at home,” Wettemann said.

Despite the reported lack of a drop in productivity, workers still appear worried about job security in the work-from-home environment, according to the survey’s findings.

“When we asked people what they were most concerned about — we didn't say about the work environment but just in general - and more than a third of them said that they were worried about their job and job security which rated far ahead of worried about being sick or worried about a loved one getting ill,” Wettemann said.