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Pushback against Saudi funding endangers Silicon Valley valuations (epsilontheory.com)
226 points by AndrewBissell 11 months ago | hide | past | web | favorite | 203 comments

Whether this murder-scandal blows over or not, it makes the case for a random "one-damned-thing-after-another" version of history.

One day, the real-politic thing works. All money is green. A feudal monarchy makes a fine ally. The next it isn't, it doesn't. The next day, one little murder in the journalist persecution capital of the world threatens to blow up the entire alliance, military, political & economic.

Saudi Arabia's had an erm.. "eventful" power transition (MBS') but it isn't fundamentally different. It's a monarchy in the real, undiluted sense. Laws and courts are mostly religious. There are no rights, on paper or in practice. No freedom of speech, affiliation, religion or concious. No pretense of these either. Religion & Monarchy share power with eachother. Neither are bound by rule of law or by the people in any way.

Are these barriers to alliance, trade or investment? Whatever your answer, I don't see what Khashoggi's murder changes. Yet, this murder (or some other catalyst event, if this blows over) can change everything.

It really does seem like random chance.

That's one way of looking at it. Another is that the West's see-no-evil hear-no-evil approach to the Saudis has always been fundamentally unstable, and an event like this was bound to happen at some point. Glad that if finally has, even if it did take the murder of a journalist (who had a dubious stance on democratic rights to begin with) to light the touchpaper.

It's not the event that happened but rather the reaction (which I think you are implying). The saudi regime kills people regularly who in the US would not even have committed a crime, but we allow it. This murder occurred at an embassy in a very anti-journalism country and on Saudi soil technically. He wasn't even a US citizen. The only difference I can see is that the details of this one got out because they botched it. Had his wife not been waiting outside I'd venture to say we would not have heard a word about this.

I'm not convinced that this will change anything in the near term. While the Obama administration had started (cautiously) pivoting from Saudi to Iran (see the nuclear deal, increased criticism of the Saudis, very limited engagement in Syria), the current admin threw that away and has reaffirmed their affiliation with the Saudis.

So while they might make a show of being upset, after the way they snubbed Iran they have nowhere to go if they want to pivot from the Saudis to a different potential regional ally. Further, Trump is expressly in favor of violence against journalists [0] so he's not going to push for punishment for this.

[0] https://www.washingtonpost.com/blogs/plum-line/wp/2018/10/19...

> So while they might make a show of being upset, after the way they snubbed Iran they have nowhere to go if they want to pivot from the Saudis to a different potential regional ally

The answer to that is Turkey; it's the last remaining regional power that has a chance of being seen as the de facto leader of the muslim middle east. For anyone who has been watching closely, the hidden story here is the way Erdogan has masterfully handled both the press in order to drive public opinion. A couple weeks ago every major Turkish and U.S. newspaper ran almost the exact same story (as far as the facts) and it was straight off of Erdogan's desk. Turkey has been very effective at driving the news cycle and painting the Kingdom of S.A. into a corner.

The Turks have also been trying very hard to create a close relationship with the Trump White House - the very first scandal of the administration was when it was revealed that Michael Flynn had taken >$500K from a Dutch company run by a prominent Turkish businessman with close ties to Erdogan.

There have been more than enough events to trigger this though. I find it interesting how when people like Obama or Trudeau are cosy with the Saudis, the media is mostly silent about the injustices. It was only once the story could be used to hurt Trump around the time of an election that the liberal media latched onto it.

This is not to say that Trump is unworthy of the criticism but I think many other leaders, including those who vocally champion human rights, are just as culpable when it comes to Saudi Arabia.

> A feudal monarchy makes a fine ally. The next it isn't, it doesn't. The next day, one little murder in the journalist persecution capital of the world threatens to blow up the entire alliance, military, political & economic.

Just like selective law enforcement is a tool used to oppress and exert power so is selective outrage used to drive public opinion.

There is something odd about this case. It is a terrible crime of course and should be condemned. But it seems we went from the head of Interpol disappearing in China and everyone not caring much, to let's start a war with SA over a journalist most people haven't heard of before. Something is unusual and I feel there is more to the story and more to the motivation to push the story at this point in time.

"... over a journalist most people haven't heard of before. Something is unusual and I feel there is more to the story and more to the motivation to push the story at this point in time."

The victim was a reporter for the Washington Post and so it doesn't surprise me that his peers in the press are driving the story more than other stories.

Not only do they have a personal connection to this individual but his death is a particular affront to their power and their role in the political process - and they have a weapon to wield in response.

Kashoggi is the straw that broke the camel’s back. That camel’s load has been pretty heavy, with everything from State Sponsored Terrorism to spreading of radical Wahhabism/Salafism to human rights violation.

And worse, they’re always buttering us up with claims of special friendships and promises of change.

It’s hoped that the Kashoggi Affair is something that will truly catalyze change in that regressive society.

And hey, if a Tunisian burning himself to the ground started the Arab Spring, maybe Kashoggi can catalyze a change in our US Foreign Policy.

The connection is that they have grisly details to his murder, connected it to personal stories (did his wife get the recording he made with his apple watch? did who call whom before he died? Did it happen while he was still alive?) instead of generic humdrum disappearances among the elite.

How a story is told matters a lot to how people react to it.

I agree. Though, how the story gets told is a sort of random chance event too. At least in terms of material there's plenty of anecdotal dirt always.

A few years back there was a ton bit of scandal around executions of witches/sorcerers. Official, public executions... for magic.

MBS' first big notable act was a giant rounding up of Saudi businessmen and aristocrats, threatening them and confiscating their wealth/power.

Some people know more about what is going on, like SA war in Yemen.

Is Russian bot-net spreading and inciting outrage through millions of fake accounts in order to destabilize SA in the Middle East roaming too far into tin-foil-hat theory?

Not tinfoil hat stuff, but not a particularly good strategic move for Russia.

SA-Russian relations have been strained by Syria, but they've actually improved substantially since mid/late 2016. MBS was in Moscow talking military issues in May 2016. And in September SA signed an agreement with Russia to limit oil production, widely seen as a major win for SA and OPEC more broadly. At the time, MBS explicitly told the Washington Post (of all papers) that he intended to coordinate with Russia to encourage them to move their regional focus from Tehran to Riyadh.

In 2017, they followed that up with a massive three-part contract selling Russian weapons to SA, committing Saudi money to energy investments in Russia, and bringing Russian petrochemical plants into SA. Later in 2017, the Saudis started pressuring the US to drop sanctions on Russia over Ukraine.

Saudi/Russian relations aren't perfect, but they've improved substantially. And more importantly, the improvement is heavily tied to MBS personally and his new direction for the country.

Meanwhile, Turkey is heavily pushing this story via the Istanbul consulate angle, in what's generally described as an attempt to destabilize a regional competitor and personally undermine MBS and his new direction. (Turkey likewise has strained-but-improving relations with Russia thanks to the work of its new strongman leader.) Depending on who you listen to, some of the extended Saud family is also advocating for this to become a crisis in order to oust MBS and return SA to its older positions.

So I can't really see what Russia gains from striking out at SA now, especially via a line that does less to weaken the country and more to weaken a specific leader who's been more friendly to Russia than his predecessors. This looks like a regional spat between two states Russia has been courting, plus an internal fight on which Russia sides heavily with MBS.

no, it isn't. but even if there WAS a russian botnet pushing the story, SA deserves to fall.

Khashoggi is the last of a long list of the journalists killed by hitmen in all the planet; From Russia, Peru, Cambodia, Bossnia to Mexico. Abel Bueno, Dimitry Kholodov, Kruno Marinovic, María Carlín, Chan Dara... etc, etc:


This outrageous case has also a big "the drop that filled the glass" component.

> "the drop that filled the glass"

Honestly, this feels like an extremely optimistic take. Journalists are regularly killed around the world, yes. But how many people even heard about it when Daphne Galizia was murdered? It's hard for a string of atrocities to add up when most of them don't even register with people.

The nastier take here is that this is some combination of a regional spat (Turkey suddenly has a stick to hit Saudi Arabia with) and nationalistic/journalistic self interest (when Russian and Maltese journalists are killed, they're honored, but when journalists with US papers are killed, it's time to do something).

I'd really like to think this is the culmination of building outrage, but every time I see somebody post about the death of a journalist who was "a US resident working with a US newspaper!" I become a little more convinced that it's mostly a nationalistic sentiment that these things don't happen to us.

The straw that broke the cammel's back is always a random chance. Something has been brewing and the right combination of events caused it to explode.

The saudi monarchy would have certainly not killed that one man, but instead made a smear campaign against him had they known of the blowback. The sad thing is I bet multiple people have been executed for failing to foresee this.

Point is: Shit is so damn random.

> I don't see what Khashoggi's murder changes

It's a definitive and publicized example of behavior that other people (eg Me) have been familiar with for decades. SA is a dangerous and chaotic absolute monarchy that is equatable to Saddam's Iraq. This changes people's minds about dealing with SA. This gives the western public an opportunity to do a casual review of current news and possibly dig into history, for further confirmation.

I suspect most such high profile events tend to be as part of a series of events / the state of things.

Let's say this truly was a one off and Saudi Arabia was a better place, I doubt we'd see the same response if this was a one off event.

You should also add Turkey's response to the list of randomness. Turkey didn't have to make a big deal about it, had they not done so we would likely know very little other than that someone went missing there.

I think it's an emperor's new clothes sort of situation. All it takes is for some event to happen so that people can't politely ignore the rot.

> It's a monarchy in the real, undiluted sense.

This is the part that blows my mind, really. I didn't think there were any true Monarchies left, especially not in a country that wealthy and prominent in the world stage.

Yes, it's really fascinating isn't it. For the first time in decades, the US stands up to the Saudi's. Not even 9/11 was able to make them do that. I wonder if it's anything to do with US oil production recently going higher than it was in the 1960's?


There's always a reason...

My understanding is that Saudi Arabia went from a dictature but where power was held together by 100 princes, taking decisions with committees, to a dictature with a single strong man (MBS). That's pretty different.

Don't you find it interesting how politicians on both sides of the aisle are relatively reserved in seeking direct response? We've become far more dependent upon that backwards little monarchy than we should have allowed ourselves to ever become. Saudi Arabia is still king of oil. And the US dollar is indirectly backed by oil. Saudi Arabia and most other major oil producers, thanks to prescient agreements from the 70s, only settle oil contracts in the dollar. This does phenomenal things for our economy. Oil is the most in demand resource in the world, and the USD is not only a guarantee to access to oil but practically required for said access.

Imagine we do some silly things like 'print' (not how money is made, but that's another topic) countless billions to trillions of dollars to pay for things we can't afford, such as pointless wars (not really pointless - Iraq/Libya/Iran all moved to of settle their oil for currencies outside the dollar, as Syria and Venezuela have now also done) or to inflate the stock market by injecting money into it resulting in inflation and calling that 'growth'. Or imagine we grew so deeply in debt that our only ever chance of possibly paying off old debt was by taking on ever more new debt in a cycle that seems to have no possible happy ending. These things might normally have an effect on an economy or currency's value or stability. But with the petrodollar if the value of the dollar goes down, this incentivizes other nations to further increase their holdings of USD to ensure a stable access to a certain amount of oil. And, like magic, the massive quantities of money start being removed from the market and tucked under the national bed's of a variety of different governments. The petro dollar means we can basically do whatever we want economically, and the rest of the world has to take it, while smiling.

This is why Saudi Arabia is able to flaunt their position. Do you remember Majed Abdulaziz Al-Saud? Neighbors saw a bleeding crying woman fleeing his mansion in Beverley Hills. He'd engaged in rape, assault, various forms of drug use, and all other sorts of fun stuff. Our response? He was released on bail and then, lo and behold, simply flew back to Saudi Arabia, and then it just disappeared from the news. It's the same story here. This is really big news, and this is something that the media and politicians could completely cripple Trump with. Yet, for the first time in his two years in office, they're remaining relatively reserved. The reason is that we need to make a big deal of this, and ho and hum about what should be done. But in the end, I think the chances of us doing anything, beyond token gestures, are basically 0. If we became enemies with Saudi Arabia, it would be a a potentially fatal blow to our economy, as it would mean the immediate and utter end of the petro dollar. Granted that dollar is already dying, but it's dying a long, slow, and protracted death. This would be self decapitation by contrast.

Even the good old 'regime change' or 'bringing democracy' isn't the same with Saudi Arabia as with the rest of the world. From a PR perspective Saudi Arabia has Medina and Mecca. They would be able to successfully spin the invasion as an attack on Islam. And Saudi Arabia also has extensive military forces. In spite of being a relatively small nation they are the third largest spender in the world on their military, and spend some 10% of their GDP exclusively on military - we only spend about 3% by contrast. We can't invade them and we can't really turn against them. We're the most dominant nation in the world, but Saudi Arabia is our Achilles' heel, and they know it.

US oil from Saudi Arabia: 876,000 barrels/month.

US total oil consumption: 19,690,000 barrels/month.

The US is now the world's largest oil producer. OPEC is scared.[1] For the US, oil is a sideline. For Saudi Arabia, it's all they've got. The US is headed for energy independence, just because of market forces.

[1] https://dailycaller.com/2018/10/19/opec-rising-us-oil-output...

This entire issue is about non-US nations being dependent upon Saudi (and more generally - OPEC) oil and thus being directly dependent upon the dollar. Reducing our direct reliance on oil benefits the petrodollar by increasing the ratio of foreign players removing USD from circulation for us, but I don't think it's a big player in either case. The numbers you reference are per day, not per month. The scale of these things is quite remarkable isn't it? Now compare our consumption to our estimated entire reserves of oil. The US may well become energy independent in the longrun, but it won't be on oil.

But to a degree this is also the same for the entire world. Global oil consumption is expected to peak in the late 2030s. As demand for oil declines prices will go up to try to sustain the standard of living that OPEC nations have grown accustomed to. But as this happens it will make non-oil alternatives even more economically justified leading to even less oil demand in the longrun which leads to higher prices which ... This is what I meant when I said that the petrodollar is dying, but it's still going to be a long slow death which gives us hope of finding ways to stabilize things before then.


You can even see direct analogs of this entire scenario with China. China seems to be investing based on the presumption of an electric/renewable heavy future and are working to corner some important resources there. Outside of simply becoming world leaders in the tech themselves, the world's cobalt supply, for instance, is now being heavily controlled by China. They aren't even operating through proxy, as we did with oil. What this will mean is that, if China's 'bet' turns out to be true, is that the get access to cobalt you'll need to play by China's terms which could, for instance, involve trades being settled only in yuan. And suddenly we have the 'cobalt dollar'. Everything from solar cells to lithium ion batteries are all dependent upon cobalt. It's quite a prescient move. The big difference is that oil was irreplaceable, cobalt is perhaps less so.

The US also has a good chunk of rare earths. It was a shortsighted move to allow the mining equipment to be sold off to China for a quick buck. But there's still time to fix this.

You put it very clearly.

I had a few lectures with Professor Ilya Strebulaev from Stanford GSB back in 2016.


He wrote a few articles.

1)How much VC drives the US economy(October,2015): https://www.gsb.stanford.edu/insights/how-much-does-venture-...

2)Unicorns are overvalued(May,2017): https://www.gsb.stanford.edu/insights/silicon-valleys-unicor...

In class in 2016 Ilya Strebulaev(who has arguably the best VC dataset in the world) stated that 92% of VCs surveyed believed unicorns were overalued and a correction was likely.

He also told our class a very memorable and self effacing story of how he placed a bet with a colleague for a bottle of nice wine on the future date of bankruptcy of GM.

In order to win the bet, the GM bankruptcy had to occur prior to X date.

GM’s bankruptcy was date X+1, thus losing the bet.

A lesson on timing. Even when you’re “right”, you can be wrong.

Perhaps a Saudi assassination “string” pulled too hard for too long could see a cascading effect.

It’s inevitable we will see a correction in valuations.

But I also think it’s pointless to fear it.

That time is better spent building a sustainable business on a fair valuation with more challenging access to capital.

YC’s suggestion for YC Batch(as well as all other) startups to be careful with not accepting money and scaling a startup at excessive valuation sounds like a solid one in this climate and the likely future.

> GM’s bankruptcy was date X+1, thus losing the bet. A lesson on timing. Even when you’re “right”, you can be wrong.

Anyone who has tried their luck at day-trading has learned their lesson, i.e. "The Market Can Remain Irrational Longer Than You Can Remain Solvent".

Plus once politics becomes involved, economic rationality goes right out the window. There's no way to reliably forecast that.

Ridiculous valuations of unicorns by late-stage VCs are driven more by FOMO than by any rational economic analysis. It's like when everyone in an office pools their money to buy lottery tickets. You know you probably aren't going to win, but you put in a few dollars anyway because you'd feel stupid if your coworkers won and you were the only one left out.

>That time is better spent building a sustainable business on a fair valuation with more challenging access to capital.

The problems change, but the solution remains fairly consistent!


So you mean just founded startups with no revenue won't be valued at millions of dollars out of thin air then?

Indeed, it endangers only the optics - which if each higher level of VC is playing the game of optics and not sustainable value (meaning they don't actually understand the long-tail market, or they do and playing the optics game/gambling for quick money), then it certainly endangers the survival of their VC fund/company, perhaps reputation - and perhaps if they take money from the wrong people, it could endanger their own lives; what happens if you lose someone's $1-10B+ who's expecting a decent return (under shallow pretences and understanding) who's a bad actor?

It will mean ALL companies will be valued at less because there will be less money being thrown at these companies. Saudi money is all over silicon valley and early stage tech companies.

No, it would have the sideeffect of investors doing better due dilligence, which would bode well for companies with actual revenue.

While you where downvoted that’s likely somewhat true. VC’s have strong incentives to invest all their money even if it means the fund only breaks even vs turns a small profit.

In turn that drives up many costs like salaries and rent for the startup ecosystem. So, less money likely results in fewer but stronger startups.

The issue is the best returns are for more risky bets that may not be funded in such an environment.

So in the name of higher valuations we should accept criminal money? Interesting thought.

Nobody said that.

Oddly enough, it is immoral but not illegal/criminal money.

>criminal money

First of all, it's Silicon Valley. Check your ethics at the door.

Secondly, it's not illegal if it's not against the laws of a country (and in this case, if the crown prince of a monarchy orders something, that's as close to legal as it gets). You could say that it's immoral, but that's a different statement, and you shouldn't conflate "illegal" with "immoral".

>First of all, it's Silicon Valley. Check your ethics at the door.

Flip or not, this is gross.

Calling a murder not a crime because a king decreed it is mind boggling. You shouldnt conflate "illegal" with "criminal".

If a king decrees it inside an absolute monarchy, it's not a crime. That's literally how absolute monarchies work--the monarch has absolute and unaccountable power.

Edit: if you disagree, please tell me why.

I disagree because positivism is not the smartest legal theory in my view. We all know Godwin's law, but nazi crimes is probably the best example of how something done by people with absolute power was considered and persecuted as a crime.

>First of all, it's Silicon Valley. Check your ethics at the door.

No thank you. Maybe you're OK with this worldview, but I am not.

> First of all, it's Silicon Valley. Check your ethics at the door.

Why would we do that?

That headline makes it sound like a bad thing... yet many are concerned that valuations are inflated. So perhaps this is a blessing in disguise?

To the extent that rich valuations are propped up by Saudi money, I think it's a great thing for them to come back down to earth.

And speaking more broadly, I don't subscribe to the "higher valuations and asset prices == better" ideology, so the headline didn't read in a negative way to me. :-)

Raising at a high valuation means more money for less dilution. Sounds good for the founders and maybe "good for America" too to me.

That depends on who's ultimately left holding the bag on the inflated valuation, and how much it attracts additional capital to potentially be wasted in a marginal business.


I just got married and had two kids. Skipped the buying horrendously overpriced real estate part though!

Everybody’s known this regime is dirty for decades now.

Worst case is they replace MBS because he’s so tainted and draw a line under this incident.

They can go back to dropping American and European munitions on school kids in Yemen and the world will go back to turning a blind eye.

Difference is the world, and particularly the USA, doesn't need Saudi oil to quite the same extent as previously.

Perhaps now they don't need to be the West's principle ally in the region, or given a free pass on every human rights abuse.

It's not about the oil itself (US has plenty and can import from Canada) but the control of the price and that oil is traded in USD.

The US has started multiple wars to prevent the oil price from being traded in another currency.

I'm not sure this makes any sense - there's no benefit to using USD for the pricing if the contract is settled outside the US, and there are RMB-denominated oil futures available. Ironically as a result of sanctions on Iran, which isn't allowed to trade oil through any institution connected to the US. https://www.cnbc.com/2018/05/16/iran-oil-trumps-sanctions-cr...

There is a seignorage advantage, in that people need access to USD. It's definitely a big advantage, and it provides a nice base of support for USD.

But the US is definitely not starting wars over it.

"The US has started multiple wars to prevent the oil price from being traded in another currency."

Oh please not this on HN.

Well it's true so why wouldn't it be on here?

It’s simply not true at all.

One can argue that cheap and easy access to oil was a reason for wars, sure.

But the USD is the world’s reserve currency. There’s no need to start a war over any attempt to pay in another currency - the money all ends up converting to USD anyway. It’s just such a minor thing in the scheme of things that no one is going to war over it.

I mean, Trump pulling out of the Iran deal has done more to promote non USD settlement than anything else. But no one really cares about the settlement aspect there.

Saddam threatened to and had plans to move to the Euro from USD for oil reserves. Saddam was assassinated.

Gaddafi had plans to develop a gold backed African Union currency and he was assassinated.

I'm not one for conspiracy theories but I am suspicious of "coincidences" in geo-politics that always end up favouring the same actors (when there is accompanying proven motive to boot).

Sure, if you are a brutal dictatorship already and try to upset global financial markets, after a multiyear struggle with the leading military power, while having a huge homegrown resistance... then you might get assassinated.

It is not a coincidence, but it is also not simply because of just one thing.

Saddam Hussein wasn't assassinated. He was captured, tried, and executed by other Iraqis. We can argue about the legitimacy of Iraq's criminal justice system but that's far from being an assassination.

A similar situation applied to Gaddafi.

I used the term loosely. The US created the situation which led to both their deaths.

Precise language matters. You could loosely state that any war in which the losing head of state ended up dead was an "assassination", but that's not what the word actually means.

I see "assassination" as "killing a particular person as a political move" - Iraq and Libya were very long-winding paths to get a particular person killed. But I agree it is somewhat imprecise in that it was not the CIA that ordered the angry mob on Qaddafi, he wrote those circumstances himself.

The US had a multi-decade plan to take Saddam and Gaddafi out the instant we could get away with it, for a whole host of reasons, and the dollar-denomination thing is like #15 on that list at best.

Some euros or RMB becoming dollars for 5 seconds before they become oil is just not that big of a deal.

Rings a bell. Ceausescu, Romania's president a.k.a. dictator, planned to do the same and was murdered as well.

It's utterly not true and keep this off HN.

So if it wasn't to maintain the status of the USD as the reserve currency which other reasons did the US have to invade? Apart from wanting to construct an oil pipeline through Iraq I'm not aware of any other reasons?

There is absolutely not a shred of evidence that the US has invaded anyone over the petrodollar.

It makes no sense in any geopolitical construct.

It's about on par with Obama being from Kenya.

Starting a war is a huge thing requiring a lot of political momentum, and almost nobody in the White House ever even knows what 'petrodollar' really is, they have no instinct for why it's important for America, and there are zero Treasury officials or folks from the Fed running around saying 'let's invade' over this or that.

The list of 'usual reasons' for invading Iraq and Libya are all in public domain by now - we know the things that Bush, Cheney, Obama etc. have talked about, we know their reasoning.

There is ZERO talk of petrodollar among them - ever - for any reason, because it's irrelevant.

Military Generals sometimes fret about national security but there are ZERO instances wherein they'll talk about the petrodollar they have no idea even what it means.

The reason that most countries price in Oil is because it's very convenient to do so.

Do you think Saddam Hussein wants worthless Chinese RMB? What's he going to do with that currency? Send it to Germany to buy factory equipment? No. RMB is worthless outside of China. So what then? Pounds? Pesos? Aussie Dollars?

The only currency that could remotely be considered are Euros, but then, what's the point? Because USD are still superior and you're going to have to trade for them anyhow.

Yes, America gains somewhat from the petrodollar - and yes, they will lean on people and strong arm to keep people in check, but nobody has ever invaded anyone over currency pricing.

Because the stupid stupid neocons wanted to “finish what they started” in Gulf war 1, and reshape the Middle East.

Edit, appears this isn’t as well known anymore. It was literally the taking point during 2002/03 but here’s a good starting point: https://en.m.wikipedia.org/wiki/A_Clean_Break:_A_New_Strateg...

Or https://www.historycommons.org/timeline.jsp?timeline=neoconi...

The good thing is that no one can argue this is a conspiracy: the neocons were very open about it and you can find their writing everywhere.

Clean break is a symptom not a cause.

Clean break - written in 1996, not mentioning USD denominated oil markets at all - was a symptom 2003 invasion of Iraq?

>was a symptom 2003 invasion of Iraq?


Exactly. How can you claim that?

This isn't really true.

Historically there have been a number of attempt to develop markets for oil in non USD currencies. The USD remains the biggest because - basically - of network effects.

Ironically, the new US sanctions on Iran look set to break that pattern because China is very happy to have a yuan denominated soil market: https://www.reuters.com/article/uk-iran-nuclear-china-oil/ir...

If the US is the largest producer, no matter the currency, wouldn't the US rake in the most cash?? It could be in other currencies which would have to be converted anyway...

Wait, what? Which wars were those?

The oil wars: How America's energy obsession wrecked the Middle East - https://www.youtube.com/watch?v=JH9zjozwNF8

That's not what the claim was: specifically that the wars were to force oil to be traded only in US dollars.

Given that you seem so confident in your theory you should be able to clearly explain why it's so important for the US that oil be traded in USD?

Having the dollar serve as the world’s reserve currency has been a major subsidy to both the U.S. government and to Americans. Foreign governments and central banks are more likely to buy U.S. government debt, which allows the U.S. government to spend more money and run up deficits with a lower interest rate. The two biggest foreign buyers of U.S. government debt come from the governments of Japan and China. This has also been a major subsidy to Americans. In addition to foreign governments using dollars and buying up U.S. government debt, many immigrants in the U.S. will take dollars in the form of cash and send the currency to relatives in other countries. This actually serves as a deflationary effect, as it makes consumer prices cheaper for Americans in the U.S.

> Foreign governments and central banks are more likely to buy U.S. government debt, which allows the U.S. government to spend more money and run up deficits with a lower interest rate.

Foreign government hold US debt because it's a safe store of value. America can access cheap debt because it has good credit. If oil was traded in another currency for some reason those countries would still buy US debt.

> This actually serves as a deflationary effect, as it makes consumer prices cheaper for Americans in the U.S.

Deflation isn't desirable firstly. Secondly, the federal reserve controls the money supply so more demand doesn't matter as the federal reserve will just decrease interest rates to maintain 2% inflation.

It's amazing how prevalent conspiracy theorists are among people on this website. Also fyi, the amount of demand the Saudis have for the USD is a small percent (maybe a fraction of a percent) of global demand for USD. So Saudi Arabia deciding to trade oil in a different currency would have 0 effect on the US.

> Foreign government hold US debt because it's a safe store of value.

US debt is a safe store of value, because cheap energy can only be obtained by paying in US dollars. If you remove that motivation, the USD is just another fiat currency.

> US debt is a safe store of value, because cheap energy can only be obtained by paying in US dollars.

haha ok, I don't even know how this statement makes sense in your head. It's like you believe the only reason the US economy is successful is because of oil being traded in USD. Ignore the mega corporations and the giant military.

It’s a myth that people “needed” saudi oil. Men are greedy and will use any justification to satiate their greed. It is up to you to accept the justification or not.

I remember seeing some pie chart many years ago that showed SA at just under a quarter of the supply of crude oil.

We used to be angry at how OPEC kept prices high by limiting supply afaik just fifteen years ago...


They’ll get a pass until oil doesn’t matter or the water runs out and it’ll all be irrelevant very shortly thereafter. Saudi Arabia’s long term future is no brighter than Yemen’s. If any of the Arab petro-states make it it’ll be the UAE and that’s borderline.

Why do you believe none of the nation states in this region will "make it?"

I think the general perception is that the region doesn't have anything valuable to export once the oil is gone. They're trying to import scientists and engineers to kick off an economic transition, but those types of people will have zero interest in being in the region once the oil runs out, and the more educated amongst the local populace would leave too. It is already widely held (again, I don't have numbers for this) that the rich/powerful/educated have already secured real estate in other places should instability arise, meaning those people with means or skills would leave once the oil runs out, meaning they don't see a bright future in the region as well.

With the recent news articles about the journalist being killed, all of the "modernization" thoughts people had are totally gone. There has been a lot of money thrown into architecting a modern image - all of which was completely undone in one single news cycle.

I am no expert on the region though, just fielding some thoughts.

They have tried some moves but they can't break from the fundamentalism making their efforts pretty moot despite all of the money they throw at it. Mystifyingly they were clearly involved with getting a Sex and the City movie set there. They could have reformed to be a productive post petrol economy but I suspect it was too late even before they decided acting like mob hitmen against journalists was a good idea. You can influence media with money but murdering journalists gives them self preservation reasons to refuse to deal with you at all.

Apparently there is a pessimism / old joke there paraphrased as grandfather rode a camel, they drove a jeep, their children drove ferraris and their grandchildren will ride camels.

Arab petro-states are not the only nation states in the region.

I don't think the term "nation state" is appropriate here: https://en.wikipedia.org/wiki/Nation_state

I can't work out whether the recent fashion for misusing (or at least generalising) the term "nation state" is just people trying to sound clever (and failing badly), or whether there's something more sinister behind it, perhaps some kind of neo-racism, something along the lines of: if you're an X-ian then you are automatically responsible for anything that an X-ian government agency does, even if the X-ian parliament was never told about it, let alone the general population of X-ia. It's probably just people trying to sound clever but when terminology is changed I'm curious about the reasons.

This way of thinking folds neatly into modern identity politics that considers people as groups and not as individuals.

Jesus christ, I never thought when I asked this question the word nation state would be psychoanalyzed in order to call me a nazi. Wtf?

Also, on reddit I was recently called an "anti-white racist." ok.

For the record ai agree with your civil libertarian principle of treating people as equals, and not as part of groups.

I don't think you are a nazi. I do find it amusing that there are many here who often push the idea that "group of people X's behavior must be collectively honored and respected" yet also push "group of people Y's behavior must be collectively punished".

Also, real Nazis would definitely consider people as members of a group and not as individuals.

> Arab petro-states are not the only nation states in the region.

They’re the only ones I expressed an opinion on though. In the Arabian peninsula they’re a majority by population and in numbers. There are no non-Arab states on the peninsula at all. Which of Saudi Arabia, Bahrain, Qatar, the UAE, Kuwait and Oman do you see having a bright future?

About 10% of the USA's imported oil comes from Saudi Arabia.[0] That would leave a pretty sizable hole in the supply.

[0]: https://en.wikipedia.org/wiki/Petroleum_in_the_United_States...

The Trump regime is salivating at the idea of removing all restrictions on fracking. He could also easily switch alliances away from KSR by easing sanctions on Iran and Venezuela. The gap is negligible given those two potential scenarios.

A side-effect of ending our persecution of Iran, however, is that Putin would likely start a war. If Iran were allowed to dump their vast natural gas supplies on the open market, Russia's economy would starve.

(Edited for formatting / spelling / grammar).

>A side-effect of ending our persecution of Iran, however, is that Putin would likely start a war. If Iran were allowed to dump their vast natural gas supplies on the open market, Russia's economy would starve.

No, he wouldn't. Russian establishment has no balls for that, Russian regime was already in survival mode by the end of Putin's first presidency. All they want now is to be left alone with their puny savings from days of abundance, and to die before their money run out.

Their expansionist ambitions? A bluff, a diversionary manoeuvre - plainly and simple.

Sounds like the money for internet trolls hasn't run out though, given how active they are

That is too, just a diversion. They prefer Pentagon to be busy with their trolls than with them personally.

They can hire a lot of Internet trolls for the cost of one bomber. And automation has now made trolling even cheaper.

That's why the Saudis have for a long time extended their business, investing heavily in real estate and what have you. Oil will be gone in 100 years, the skyscrapers won't.

The skyscrapers in the desert mean absolutely shit, though. Likewise man made islands that disappear without constant care. Those are not investments.

Using money to make more advanced development possible, that's investments. The Norwegians got it right IMHO - they put all their oil money back in the economy, and they are punching now way above their weight! They have about 1% of the EU population, but own about 10% of EU Companies through their investments. Bar any major catastrophe, or very stupid decisions, they will have a good life for generations to come, regardless of their oil futures.

I don't think it's beyond the realms of possibility to imagine future generations might look dimly on wealth gained from oil.

In the a similar way as current generations look dimly on wealth gained by stealing land from indigenous populations, or on wealth gained from cutting down almost all old growth forest, I presume.

People who are well fed, clothed, properly housed, and with little to spend their time on often criticize the culture that feeds them.

Those that aren’t don’t criticize their culture? Seems like maybe criticism is a constant.

I'm pointing out that people who are very well off tend to criticize the culture that provides them with the comforts of modern life while being oblivious about the benefits of their culture which they enjoy. I made no claim about other kinds of people.

Agreed. The Saudis have been snatching up real-estate all over Europe, America, and the middle-east. KSR is the largest foreign investor in Turkish real estate. If you remember the Gezi park protests, they were more about Saudis and Qataris forcing unwanted conservatism on the Beyoğlu city of central Istanbul than it was about saving the park.

The average Türk, except for the very upper-class, would be very happy to end the influence of the Saudis in their country.

Nothing has changed about the world's demand/need for Saudi oil, it's near record highs.

It's true that between its domestic production growth and Canada, the US could just about painlessly replace Saudi oil imports if it were necessary (1m barrels imported per day from Saudi in 2017). The US should add another million barrels per day in production over the coming year.

Saudi Arabia's production plunging (eg due to a revolution or embargo), would legitimately crash the global economy. China, India and Japan (three of the five largest economies) heavily depend on their supply.

Maybe in another ~25-30 years Saudi Arabia's oil won't be very necessary for the global economy, assuming electric vehicles make enough headway.

>Saudi Arabia's production plunging (eg due to a revolution or embargo), would legitimately crash the global economy. China, India and Japan (three of the five largest economies) heavily depend on their supply.

No, it wouldn't. Prices and taxation regime will simply adjust. Proof? Last decade prices were hitting $130+, yet nobody died. Price of air travel have plummeted last decade, and been going up since then, despite kero getting cheaper! And so did many other fuel cost sensitive industries.

What you said above is a popular culture myth.

I'm not sure that is true anymore.

There were a bunch of oil development projects that started up 10 years ago at $100+/barrel prices which were put on hold. IT is surprising how quickly they can be brought online.

Last time the oil price peaked we saw how effective technological change is at opening new fields and techniques.

There is also a whole bunch of Russian and deep offshore fields which become economical at high prices too.

They only care when it can be used as political ammunition, i.e. in this case against Trump

The Yemen disaster is mostly MBS's policy too.

The Saudis have a lot of issues, but MBS seems to have made a lot of things worse.

Stop blaming Yemen on the Saudis, this is ridiculous.

The Saudis could care less what goes on in Yemen and have shown through history they have zero imperial interest there.

But if there is instability there, causing violence to spill across the border - or worse - Iranian backed antagonists are actually attacking Saudi - then Saudi is forced to take action.

If there were no antagonist forces in Yemen threatening Saudi Arabia, then there would be zero Saudi Arabian military intervention.

Yemenis are not violent due to some arbitrary violence of Saudis, it's the other way around.

The truth is saundi arabia has been trying to control the region for awhile and started to lose control. Ask Quater if the Saudi's would try to influence or threaten a country for no reason other than having a brighter spotlight.

When the Saudi's tried to threaten Canada recently by pulling out investment and students you could see this was going to be a challenging year for them. Aside from open up space for other more deserving students in Canada the Saudis did little damage and changed the way the world started looking at them. We are seeing them fall further and further each month.

Totally missing the point.

I say again: Saudi wants nothing to do with Yemen, and that they are personal and prickly with Qatar has nothing do do with anything.

When Yemen was peaceful, Saudi coexisted in peace with it.

As Iran tries to destabilize the region and antagonize Saudi Arabia by supplying weapons and support ... then it becomes a problem.

There are literally missiles flying over Riyadh, supplied by Iran.

Now who is trying to disrupt who?

"When the Saudi's tried to threaten Canada recently by pulling out investment and students you could see this was going to be a challenging year for them."

Again, it's stupid for Saudis - but this has nothing to do with anything.

Their childish relationship with Qatar and response to Canada means little.

Missiles over Riyadh supplied by Iran is essentially and act of war from Iran and they definitely should defend themselves.

Oh please.

Missiles didn't attack Riyadh until 2 years after the Saudi intervention, and after the cholera outbreak started and after the Saudi siege started killing civilians.

No huge argument with the intervention itself, but the indiscriminate harm to the civilian population is indefensible.

Do you take a similar position on Saudi Arabia's attempts to strongarm Qatar and Canada?

Saudia Arabia is in no way strong-arming Canada - as for Qatar, that's a non violent dispute between two rich nations.

Nothing to do with anything.

Do the words disproportionate response mean anything to you?

Yes, and it's not.

It is quite a quagmire so to speak for Silicon Valley. For SA they have adopted policies that are basically designed to diversify the country away from oil so they are more willing than other countries to invest in very innovative "pie in the sky" type ideas. SA's population doesn't have the innovation skill that other countries have so SA just invests in the foreign talent. The new ideas are often developed in the Silicon Valley area. For SA, they are willing to invest in these wild ideas because for them...the money effectively just gushed out of the ground. That's why SA is often a big investor in very cutting-edge, high-risk investment funds like softbank's vision fund.

For Silicon Valley, this is quite a major situation because entrepreneurs here effectively live or die based on if they can get funding. Even if the idea is amazing and has potential, the founder will just abandon the idea if investment doesn't materialize. SA is a godsend to any entrepreneur who has an idea that is viewed as high risk based on traditional VC investors. If SA pulls out of being so proactive with their investments then it will be a huge wake up call to many early stage startups for sure.

>SA is a godsend to any entrepreneur who has an idea that is viewed as high risk based on traditional VC investors. If SA pulls out of being so proactive with their investments then it will be a huge wake up call to many early stage startups for sure.

This implies that "traditional" VC couldn't get high risk stuff funded, but SA can. That has no basis in history or reality.

Replace MBS? You say that like he is in am elected position. He's the heir to an absolute monarchy. Unless by replace, you mean a coup d'état of the Saudi Royal family?

There's no formal structure/rule for which prince leads / who is "closest" to the throne. It comes down to politics. MBS has many many siblings and cousins, essentially any of whom could "replace" him.

He's only heir apparent, and that's because his father (and people believe MBS was involved) removed Muhammad bin Nayef.

There doesn't have to be a coup against the entire family to change the line of succession.

Saudi Arabia does not run by a primogeniture succession. Essentially all potential male heirs can become the overall leader. So all his brothers, his uncles, and some of his cousins are possible choices. It is politics that decides which one is heir aparent.

Certainly the CEOs, celebrities, and media outlets that feted MBS earlier this year knew how awful KSA is, but I don't think the same could be said of the general public pre-Khashoggi. A key point Ben Hunt likes to make is that it's not what everybody knows that matters -- it's what everybody knows that everyone else knows that changes behavior.

Still, it's very possible (especially with Trump & Kushner running the show) that this will just be a speedbump in business-as-usual for Saudi Arabia and their American business partners. We'll see -- in your worst case I don't think it will necessarily be a smooth process for MBS to be replaced.

MBS is testing--or tested--the limits of his money. I think he overstepped the line, got away with Yemen, the shakedown at the Ritz so why not try this too? Scares the crap out of any dissident, you almost always need to go back to your embassy /consulate even if a US Citizen. So go ahead, yap online about MBS and see what can happen 5 years from now when you a certificate...

Same pagebook as Putin with the high profile killings in UK.

I believe the Trump-Russia situation coming to light has made people hypersensitive (good when it's countering a desensitization) to this kind of blatant bad behaviour. The fact that it was a Washington Post journalist may have been crucial to the level of shock it has, at least in America; a situation finally that can resonate close enough to home for us to feel some kind of impact, and in the current climate of authoritarian/totalitarian governments trying to breakdown democracy.

Can only wonder if the downvotes are trolls downvoting anything negative Trump-Russia related. At -2 so far.

Other than what we read in the news, is the information of who invested in what startup public information that can be found somewhere or can these investors be kept private?

I think it would be neat to have a list and map of for example the top 50 SV startups and where their money is coming from.

It would be great to use Wikidata for that. It's already possible to add a list of investors (https://www.wikidata.org/wiki/Property:P1951) to companies (like Uber: https://www.wikidata.org/wiki/Q780442). And then map all these startups using https://query.wikidata.org (it would be pretty easy to highlight the % of shares by countries / regimes, etc and point out the financial vehicles / intermediaries used for that).

There are "bad people" throughout the startup investment ecosystem, including but not limited to:

* just plain jerks

* serial harassers, misogynists and the like

* supporters of various evil/hateful politics

* white-collar criminal/fraudster types

* straight-up mob, american, russian, or other

* nation-state actors with very dirty hands like KSA

Making ethical decisions about who you are willing to work for is a routine part of working in startup world... and you're never done, because surprise! You may have an even harder decision to make after that Series B closes with new investors!

LOL, this is so naive point of view. When that much money is involved nothing will change. There might be some ephemeral change, some PR campaign, sad nods, sad words, some companies might be rebranded etc. But unfortunately at the core nothing will change, this is sad, harsh and grim reality but when that much is at stake life of one man is not enough to tip the scales.

What makes this journalists blood worth more than all those murdered in Yemen or the victims of SA's overt or covert terrorism?

Location and audacity. It was done in another sovereign country, one with string US and European ties, and which isn't currently in civil unrest.

Also, they practically took him into their embassy, killed him and then lied about it in the most haphazard way.

That represents a massive break from international status quo. Unfortunately getting involved in third-world civil wars and financing terrorist attacks is quite within the status quo.

I was wondering why they'd do this in their embassy, instead of just performing a hit. At first I thought it was kind of plausible that they just wanted to kidnap him, but that things escalated in an unscripted way.

But ... a friend raised an interesting point -- part of the stink around the Russian assassinations in the UK was that they were done on UK territory, and endangered uninvolved UK citizens. The Saudi embassy is Saudi territory. Seems like splitting hairs, but maybe this factored into their decision to do Kashoggi in the embassy.

EDIT> It's just so weird. If you're going to murder someone, you don't invite them over for dinner and do it in your living room, or am I stupid?

Lest we forget.


This is not a massive break from the international status quo by a any means. The USA and all other nations have operated in a similar manner for a long time with equally gruesome outcomes.

If I recall the head of Interpol “disappeared” not long ago, and that little kerfuffle died away right quick.

Perhaps the reasons are more mundane.

1. The Saudis got caught out by the Turks with the evidence. Which has been used effectively. The Turks have a lot to gain by seeing the alliance between SA and the US weakened. 2. The senior leadership of SA can be more directly tied to this incident, as opposed to more common case where plausible deniability exists. Rookie mistake. 3. There exists internal opposition to the leadership in the US and SA that find it convenient to escalate the profile of this issue for their own purposes.

This will blow over and business as usual will resume shortly.

The whole point of extraordinary rendition is to remove the target to another country to give some legal cover and plausible (hah) deniability to the subsequent interrogation / torture / what have you.

Murdering someone in your embassy (although technically your own sovereign territory) is a new low.

I think it has to do with the role America has played on the world stage up to now. If you're a beat cop in a rowdy neighbourhood, you can ignore a known criminal so long as they keep their activities discreet. If they commit a violent crime in public, ignoring it undermines people's faith in your ability to do the job.

Aside from the lack of even a remotely plausible excuse for their misdeeds or deniability if you attack journalists literally expect negative coverage from self preservation alone - nobody trades with a guy who "sometimes" eats people. That is putting aside any nobility.

Plus there is the "cruel and unusual" aspect. Although the phrase was meant for capricious abuses of power it highlights how evil out of the norm is reacted to more harshly. People are used to shitty things done by militaries and funding violent groups - the definition of a terrorist group had to be very carefully defined to avoid the US being guilty of it themselves under their own laws for instance. Even government assassins don't murder people in their own embassy usually much less so brutally and openly.

That's what makes me a bit cynical about this situation. Maybe it's a "one straw that broke the camel's back" event, but Silicon Valley didn't say shit and gladly accepted Saudi money during the last 3 years when the Saudi government was bombing Yemeni civilians. There's a good portion of the current attitude towards Saudi Arabia that's a PR image play rather than actually giving a shit about whatever the Saudis do to other people in their corner of the world.

This article is admission from there VC community that valuations are basically price gouged as a function of available capital - with little, if any, scientific basis the them.

This was always evident from how badly unicorns have fared in the open market post IPO - but this is a direct admission of price gouging

This can only be good, right? Less money means earlier IPOs and less dilution of founders and early employees?

I don't read many "More money needed to fund startups in Silicon Valley" headlines recently...

First big victim appears to be virgin hyperloop one. SA pulled out of a planned $1 billion investment in the company.

There was also a planned $200 billion solar project that has also been scrapped.

The solar project was scrapped before the journalist was murdered (September 30th that news hit, versus October 2nd for when Khashoggi went missing). It was likely known the solar project wasn't going forward a while prior to the news release in September. They don't appear to be linked.

Richard Branson said no to Saudi money after murder incident.

He should have been saying this since 9/11, but better late than never, I guess.

Give the guy a break, the US government itself cleared Saudi Arabia of culpability in 9/11 and reafirmed they were a regional ally.

With Softbank playing such a big role I wonder if there is some component of incumbents playing this up to try to curb the influence of Softbank ? (Iremember Sequoia raising 8 bil. fund specifically because they needed a more equal footing with Softbank).

>With Softbank playing such a big role I wonder if there is some component of incumbents playing this up to try to curb the influence of Softbank ?

Playing what up? The fact that Silicon Valley and their new "hey, just stay private!" mentality was heavily funded by blood/oil money?

Is this actually news to people that Saudi Arabia has done terrible things? Or does it only matter now that there's been a scandal?

Well, thank God for the scandal, then.

The cynical part of me says it matters now because there are special interests that for one reason or another have an interest in reducing SA influence or want some concession from SA and in reality it has 0 to do with SA being a brutal absolute monarchy which it has being for a long time.

Be that as it may, it's good if being a brutal absolute monarchy is a liability you can be attacked for, even if those attacks only happen when there's someone on the other side.

It's going to be interesting to see where this goes. Techies have been up in arms about Google and China, Microsoft and the military. What about the Saudis and murder?

I'm glad dear industry has noticed that Saudi Arabia is an authoritarian country with no respect to rule of law and human rights. I just fear that this awareness might not last for long: big money tend to cause dementia in tech.

By the way, once we're all here: China is an authoritarian country with no respect to human right as well, keep that in mind next time you read (or God forbid write) another fascinated article about Greater Bay etc.

Don't be quick on generalization.

China is not a democracy but they don't kidnap and murder people in foreign soil, and they don't bomb other countries. They don't also fund and promote extreme religion exportation, like Saudi Arabia does. Saudi is a net exporter of terrorism. If China really did all this, you would hear about thousands of Falun Gong followers kidnapped or murdered in USA or Canada. Or you would already have Taiwan and other countries like Vietnam invaded. Taiwan is a bigger pain point to China than Yemen is to Saudi Arabia.

> China is not a democracy but they don't kidnap

They do kidnap people. They've kidnapped people from Hong Kong, Vietnam, Myanmar, Australia and Canada. Some of these people confess to a series of crimes and in exchange pay fines or are sentenced to long prison sentences, or they are simply never heard from again.

They kidnapped a Swedish citizen from Thailand for having the audacity to publish a book critical of Xi Jinping.

Source - https://foreignpolicy.com/2018/03/29/the-disappeared-china-r...

Umm.China does indeed kidnap people off foreign soil. They just do so more efficiently and far more smartly than the incompetent House of Saud.


Where's the pushback against Russian funding?

Russia is no longer the large funding source they were during the days in which a young Facebook was hoovering up their money. There's an actor ~50 times larger than Russia - and even worse on human rights - when it comes to venture capital.

Where's the push-back against Chinese funding? That money is sloshing all over the valley right now, nobody cares in the least. There are no protests, no outrage, no fake performances by politicians and business persons. They've routinely disappeared journalists, human rights workers, etc. over the last decade.

Most of the world is absolutely terrified to push back against China on anything at any time. There isn't a single major player in Silicon Valley with the nerve to stand up to China these days.

Saudi Arabia is a convenient target (and not in any manner undeserving of the negative response they're getting), that's all that is going on. The aggressively selective outrage, magically showing up now, is how you know it's shooting at something larger.

To give the readers a sense of proportionality, Russia has about the same GDP as Italy (About 2 trillion USD). Saudi Arabia is about 10% less at 1.8 trillion USD (PPP 2017 numbers), but an estimated oil reserve of 35 trillion USD, which is approximately thrice as much as what is available in Russia.

Interesting numbers! Thanks!

One question: Why are you quoting the estimed oil reserve in USD? Wouldn't that number fluctuate a lot due to changes in oil price during the years of extraction? Wouldn't it make more sense to quote it in barrels?

May be you are correct, but as a hydrocarbon-plebe, USD makes more sense to me :)

Morals are flexible when they're offering you $100 million or more. Mine would be. And it's not directly doing something immoral, just turning a blind eye to an investor's government's actions - like one would when working with a US based investor.

I don't think it's quite equivalent to compare a US investor to a Chinese investor. The Chinese government has proven to be quite involved in the actions of its citizens and has been making moves to nationalize their tech sector (They also have a long history of nationalizing other sectors).

While the US has meddled from time to time in private business, the rights of citizens to avoid such action are pretty well laid out. Can you imagine a Chinese company taking their government to court to refuse revealing customer data to the government like apple and other us companies have?

So I think you can easily ignore the actions of the US government while taking investor money. But taking Chinese money is essentially like taking money directly from the Chinese government.

Then they really aren't morals, are they?

Magnitsky act? The ongoing investigation into money laundering by senior Republican campaign officials?

Allow me a nitpick:

SA generally refers to South Africa. It's either KSA, or Saudi Arabia.

ZA is the ISO Code for South Africa. SA is the ISO code for Saudi Arabia.


My mistake. I leave it there, thoguh, to not break the flow.

And South Australia :)

this does not change in any way my willingness to take money from softbank. they are an investor in my current company and i will be delighted to take them in the next.

i am really not sure why anyone would consider the interests of their company's fundraising strategy to be less important than that a certain investor has a large LP that is a country that had someone killed.

this will blow over.

Some companies can choose their investors.

and they will still choose them. on material things like terms and governance, as smart companies do. not on irrelevant things like this Khashoggi story.

I'd feel bad if this were any other crew about to be gutted.

But with the Silicon Valley crowd - well now I know the true definition of scha·den·freu·de!

>But with the Silicon Valley crowd

Yep, the SV crowd thinks they're the enlightened ones, saving the planet. Between billion dollar valuations based on blood-money, the massive financial inequality and the state surveillance apparatus they built to put us in, I doubt the proletariat think too fondly of the place.

So in other words, tens of thousands of Silicon Valley tech employees at companies that took investment or could be bought out by a company that took investment from a fund that took investment from anything related to Saudi money stand to lose a trenemdous amount because the Saudis murdered someone? Yeah, sounds like those employees should definitely pay the price for something they had nothing to do with.

>Yeah, sounds like those employees should definitely pay the price for something they had nothing to do with.

Oh, it's grand to read these sorts of comments from one of the most righteous communities now that the scandal is in their backyard.

Yeah, who cares if the guy signing your paycheck is hiring death squads to murder journalists! My photo app deserves to sell for millions!

Can it really be called "paying the price" or "taking a loss" if tech employees are losing ephemeral wealth which was dependent for its existence on the continued good behavior of a feudal autocrat halfway around the world? Just because a company reaches a certain valuation thanks to an infusion of dumb Saudi money doesn't entitle it or its employees to that valuation in perpetuity. Perhaps that valuation is the mistake, now in the process of being corrected.

I work in tech, and threads like these make me eager for a crash.

Buy low. :)

So you’re self destructive?

You're a benefit-at-all-costs kind of guy?

I think this is just an early stage of the "fuck you, got mine" mindset, where OP can't quite plug his ears yet...

I don't understand your post. Why should they be isolated from the effects of what happens in the real world? It's unfortunate for them, of course, but in every situation ever things that happen have knock on effects that you can't control.

That happens to basically everyone who doesn't have enough power to be responsible for everything that happens to them. A factory worker losing his job due to the company going under isn't his fault. The CEO losing his job is responsible for failing to keep up or pivot. Camera crews lose their job after the star goes on a racist tirade. The star however totally deserved it.

The world isn't inherently just - we need to build our own systems to change or mitigate them if we want it.

Seriously? I'll order some violins.

Yes, the causal web of our actions is obscure, yet we are gifted with reason to overcome this.

So you’re saying you looked at all of the LPs of every fund and then every LP of those LPs (and so on) when you took your current and past positions and are sure you’ve never been paid a dirty dollar in the past? And you will do so in the future and would decline offers from companies that had “compromised” investors?

"Do the best you can until you know better. Then when you know better, do better."

-Maya Angelou

Isn't it borderline popular nowadays to turn down Facebook, despite what they can offer you? Or to quit at Amazon/Microsoft if your tools are, say, helping ICE detain children or track peaceful protesters?

We've all had a BIG wakeup call about these tech gigs, and we're slowly building the conscience to match. Slowly.

Yes, that is basically what will happen. For those tech companies, it is live or die at this point. Assuming SA doesn't reverse course, it will mean for many companies they simply won't get more funding. It will be either start making money or seek out other forms of funding like maybe an IPO or something. Other VC firms will get flooded with companies to invest in and of course they will just go with whatever companies they feel are most worthwhile but going forward less companies will get the funding they need.

So you don’t feel bad for the employees at these companies?

This is basically the "contractors on the Death Star" from Clerks. I feel a bit bad about their situation, but 1. There's no shortage of tech jobs, (and we've been talking about SV being a bubble for a decade or so now, why not have a plan for that case?) 2. People should be aware where their wages come from. If you know your money ultimately comes from crimes... maybe reconsider your job.

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