Publications: Notes at the Margin

The Saudi Success, The California Exception (September 30, 2019)


Aramco and the Saudi government did something unique after the September 14 attacks. The Saudis, though, went to the Hank Paulson/Ben Bernanke market disruption school. Readers may recall that following the Lehman Brothers collapse, Paulson and Bernanke came forward with almost a trillion dollars in cash that they forced banks to take. The liquidity kept the financial system operating and interest rates low. Saudi Arabia has done the same thing. Crude oil was drawn from the country’s inventories to meet demand. Refinery operations were cut back so the oil that might be processed at Saudi refineries could be supplied to customers. Requirements were met. At times, the buyers did not get the type of oil they wanted, but they got oil.


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