NY Post: US government covered up Saudi role in 911

[Martinus]

http://nypost.com/2016/04/17/how-us-covered-up-saudi-role-in-911/

So how credible is NY Post?

[The Brain]

It's all I ever read.

[Tonitrus]

http://nypost.com/2016/04/17/how-us-covered-up-saudi-role-in-911/

So how credible is NY Post?

Probably like our version of The Sun.  But with less tits.

[Admiral Yi]

Normally I would dismiss a story like this out of hand, but I would like to know more about that $130K check Prince Bandar wrote.  Especially because I've always thought of him as the gung-ho pro-American in the royal family.

[Solmyr]

http://nypost.com/2016/04/17/how-us-covered-up-saudi-role-in-911/

So how credible is NY Post?

Probably like our version of The Sun.  But with less tits.

It's America, they censor tits there.

Also it's owned by Rupert Murdoch and has just endorsed Trump, which is all you need to know.

[Norgy]

NY Post? Murdercock paper and deeply right-wing. Seems like the perfect arena to slip something like this to. The NY Times would've been to leftist.

[Admiral Yi]

NY Post? Murdercock paper and deeply right-wing. Seems like the perfect arena to slip something like this to. The NY Times would've been to leftist.

It's an indictment of the Bush administration, so I don't see the right wing angle.

Also, my understanding is Murdoch papers run the gamut of respectability.

[Razgovory]

http://nypost.com/2016/04/17/how-us-covered-up-saudi-role-in-911/

So how credible is NY Post?

On net, New Yorkers consider THE NEW YORK POST to be incredible (as in not credible), by 39% to 44%.  Among the most recognized media outlets, only THE POST earns a higher negative than positive rating on the credibility scale.

http://appserv.pace.edu/emplibrary/pace_poll_061604.pdf

[mongers]

Take if from me, the Saudis had Absolutely nothing to do with 9/11.

[jimmy olsen]

Well, the Post says that 60 minutes uncovered this, and they're much more credible.

Did anyone watch that segment? What did they say?

[jimmy olsen]

I found this story about 9/11 more interesting

http://www.forbes.com/sites/timworstall/2016/04/17/saudi-arabias-threat-to-sell-off-750-billion-of-us-assets-over-911-bill-is-pretty-empty-really/#778cff4412b4

Saudi Arabia's Threat To Sell Off $750 Billion Of US Assets Over 9/11 Bill Is Pretty Empty Really

Tim Worstall
I have opinions about economics, finance and public policy.

Even among governments $750 billion is real money. But this, well, I suppose we should call it a, threat that Saudi Arabia would sell of $750 billion of US assets if a certain bill passes Congress isn't all that much of a threat. Yes, indeed, it's a large amount of money. But large in relation to what? This is wealth, assets, so we can't go comparing it even to GDP, which is a flow, we need to compare it to the stock of assets in the US. And at that it's perhaps 1% of the assets of the nation. Someone selling 1% of the stock of a company would be one of those things we would notice for sure but it wouldn't exactly be an existential crisis, would it? If the actions went further, to the Saudis moving the money they receive out of dollars and into, say, the euro, it's not immediately obvious that those markets would even see what is happening. Daily turnover in London alone is well over $2 trillion. This is thus more of an interesting thing to say than an important problem that has to be dealt with.

Some people aren't quite getting the news right:

The Barack Obama-led government has been warned by Saudi Arabia that it would sell off American assets worth $750 billion if the US Congress passes a bill declaring the latter responsible for the September 11, 2001 attacks.

No, that's not quite what is going on. No one is trying to get a bill through Congress which states that the Saudis were responsible. It's a much more tenuous connection than that. Rather, sovereign nations have certain protections against being sued in the US courts. The bill would lift a certain amount of those protections. This would then open the door to people to claim that Saudi Arabia was connected in some manner with 9/11 (yes, we know that certain Saudi citizens were but that doesn't prove that any part of the Saudi government or state was) and if that could be proven then the path would be open to claim some compensation possibly.

The bill, which passed the Senate Judiciary Committee earlier this year, would take away immunity from foreign governments in cases "arising from a terrorist attack that kills an American on American soil." The New York Times NYT +0.71%, citing administration officials and congressional aides, said "the Saudi threats have been the subject of intense discussions in recent weeks between lawmakers and officials from the State Department and the Pentagon."

That's a better reading of what is happening. The full report is in the New York Times:

Adel al-Jubeir, the Saudi foreign minister, delivered the kingdom's message personally last month during a trip to Washington, telling lawmakers that Saudi Arabia would be forced to sell up to $750 billion in treasury securities and other assets in the United States before they could be in danger of being frozen by American courts.

And that's the real point here. It's not so much that there is a worry that the Kingdom will be found responsible. It's that courts might freeze those assets for however many years it takes for the whole process to rumble through the courts.

The technicality here is interesting. Because it is almost certain in my mind that in order to get those assets out of the reach of the American courts they would have to not just sell those Treasuries and any other securities, they would also have to move the money out of US dollars. Because the US Government does indeed insist that movements of US dollars around the world (at least through the banking system even if not in cash) fall under US law. This is what tripped up a couple of foreign banks just recently. They were dealing in US $ with places like Sudan (from memory) and the US had sanctions against Sudan. Those banks said, well, we're European, in Europe, what do American sanctions have to do with us? The response being that dollar transactions clear through the US banking system and thus fall under US law whoever is doing them wherever. The same would presumably apply to US $ bank accounts around the world. The account itself might be outside the reach of those courts but transfers from them would not be (shades of Judge Griesa and the Argentine bond problem there).

But let us walk back through this and see whether $750 billion of assets fleeing would actually be a problem. It would be noticeable, yes, but would it actually be a problem? The foreign exchange markets are certainly deep and liquid enough to be able to deal with it. Obviously not as one transaction to be done in the next 10 minutes, that would cause chaos. But daily foreign exchange volumes around the world are some $5 trillion. That's per trading day. Not all of that concerns the US $ of course but well over 80% of it does include the dollar as one or other end of the trade. Done over a few weeks traders would notice it and prices would change but there wouldn't be any problem with being able to process the amount.

Walking one step further back, these are of course assets, not incomes or flows. So the amount needs to be compared with the total US assets, not GDP (GDP itself being an income or flow). Total US assets are up at $270 trillion and net assets are reportedly $124 trillion. That looks a little high to me as rolling around the back of my mind is the idea that the asset value is more like $70 trillion. But still, $750 billion is 1% of that total value, or rather less than that dependent upon which number you want to use. So, again, we've got something that would be noted but certainly wouldn't be any form of existential crisis. We might not want the Saudis to sell off but we could cope with it easily enough.

Then one step further backward: what if it's all Treasuries (it isn't, but what if?)? The Treasury market is the world's largest and deepest bond market but with the national debt (which is, of course, the same as Treasuries outstanding, given some fiddling for the Social Security Trust Fund) but at $14 trillion odd even that might choke a bit at having to absorb $750 billion of selling. Fortunately there's a very easy way out of that. The Federal Reserve could just step up its open market operations. Think of it as being akin to an increase in quantitative easing (which is itself really just a development of those open market operations). If that selling looked like making bond yields spike (yields move inversely to prices, so this is the same as saying Treasuries fall in value) then the Fed could simply create some more money on its computers and buy more Treasuries. Exactly as it has done with QE. And for the same reason too: they'd like interest rates to be at a certain level and they'll buy Treasuries until they are. That QE has already expanded the Fed's Balance sheet from the hundreds of billions to the trillions and there would be very little difficulty in expanding it again to cover this $750 billion. Especially as no one would be thinking that it would be a permanent expansion of the Fed's balance sheet. The market could absorb this sort of amount over a few weeks at most. OK, let's be pessimistic, a couple of months.

I don't say that it's desirable that the Fed does this, nor even that it is so that Saudi Arabia does this. Only that while the sums seem unimaginably large in comparison to an economy the size of the United States they're simply not threatening numbers. We could cope with this quite easily. In terms of this being a threat it just isn't much of one. Thus public policy should not be that it is much of a threat.

Please also note that this says nothing at all about whether Saudi Arabia was or was not responsible in any manner for 9/11, nor whether the law should be changed in the manner mooted so that the case could be tried. That's all well beyond my remit of looking at economics and also well outside my knowledge base. $750 billion isn't chopped liver for sure, but someone deciding to take that amount out of Treasuries and out of the US dollar isn't much of a problem.

[Martinus]

That Forbes article is in a bad need of editing.

By the way, Obama has been apparently campaigning very vigorously to kill the bill.

[Richard Hakluyt]

Take if from me, the Saudis had Absolutely nothing to do with 9/11.

Neither did Islam.

The whole thing was orchestrated by Methodists from Yorkshire.

[Duque de Bragança]

Take if from me, the Saudis had Absolutely nothing to do with 9/11.

Neither did Islam.

The whole thing was orchestrated by Methodists from Yorkshire.

So it's no longer the Irish, even for Little Englanders? 

[Norgy]

NY Post? Murdercock paper and deeply right-wing. Seems like the perfect arena to slip something like this to. The NY Times would've been to leftist.

It's an indictment of the Bush administration, so I don't see the right wing angle.

Also, my understanding is Murdoch papers run the gamut of respectability.

If some paper like The Guardian or the NY Times printed something bad about Dubya, it'd be business as usual. The NY Post would have more credibility in printing such an indictment.
Get my point?
Murdoch really owns such a variety of news outlets that not all are necessarily bad. But he does hold some sway over UK elections still. If The Sun says Cameron, it's Cameron.