Last Call For The Saudi Shuffle

Our good friends the Saudis are in the middle of a major government overhaul as the reality of long-term $45 oil settles in, and its effects on the economy in Riyadh.

Saudi Arabia replaced its central bank chief and long-time oil minister as part of sweeping economic changes led by Deputy Crown Prince Mohammed bin Salman to reduce the nation’s reliance on hydrocarbons.

King Salman appointed Ahmed Alkholifey to head the Saudi Arabian Monetary Agency, as the central bank is known, succeeding Fahad Al Mubarak, who had been in the role since 2011. Also out is Oil Minister Ali Al-Naimi, the architect of the 2014 switch in OPEC policy that’s since roiled crude markets, replaced by Saudi Aramco Chairman Khalid Al-Falih.

Saudi Arabia is undergoing its biggest ever economic shakeup, led by the the deputy crown prince and second-in-line to the throne, as it prepares for the post-oil era following the plunge in crude prices that started in 2014. The kingdom’s energy industry, as well as its central bank, will play a “critical role in the economic transformation” plans, said Simon Kitchen, head of macro-strategy at Cairo-based investment bank EFG-Hermes.

“The deputy crown prince has now put his stamp on both institutions,” he said.

Al-Naimi, 80, retired after heading the oil ministry for almost 21 years. His departure is another sign of Prince Mohammed’s growing influence.

At the April 17 meeting in Doha where producers discussed a possible output freeze to curb the global glut, al-Naimi lacked the authority to complete any deal, according to his Russian and Venezuelan counterparts. The view of Prince Mohammed, who had insisted that no accord was possible without Iran, eventually prevailed and the talks collapsed.

As part of Saturday’s royal decrees, the name of the oil ministry becomes the Ministry of Energy, Industry and Mineral Resources, and will undertake tasks and responsibilities related to electricity.

Prince Mohammed’s plans, outlined in the so-called “Vision 2030” blueprint announced on April 25, include setting up the world’s biggest sovereign wealth fund, transforming Aramco into an energy and industrial conglomerate, and generating an additional $100 billion in non-oil revenue by 2020.

Prince Mohammed is the future of Saudi Arabia, or at least the future of the House of Saud. Whether or not diversification away from oil will work is anyone's guess at this point, but it's clear that the man who believes that the country doesn't have a choice is now the man in charge, and King Salman has spent a lot of political capital getting the Deputy Crown Prince into that position.

The more pressing issue is Saudi's central bank, and whether or not it will keep its currency pegged to the US dollar.  Dropping the dollar peg would cause havoc with oil prices and certainly make things more difficult here in the US, just in time for the elections.

In other words, if you think the Saudis might be sore at us for crashing the price of oil, they could cause a lot of damage come this fall.

Just sayin'.

Pick Up Your Ride And Go Home

Whiny techbros don't like being told what they can and can't do in the Age of Disruption, and Austin, home of SXSW, decided that yes, ride-sharing drivers for services like Uber and Lyft need tougher background checks.  The companies spent nearly $8 million to force a ballot measure repealing the background check ordnance, and voters went to the polls on Saturday.

On-demand ride companies Uber and Lyft suffered an embarrassing defeat in a Saturday election in Austin as voters backed a measure requiring fingerprint background checks for drivers.

The two companies spent more than $8 million to repeal a city ordinance requiring the fingerprint-based criminal checks and launched what turned into the most expensive race in the Texas capital's history. Voters said by a margin of 56 to 44 percent they wanted the fingerprint checks to stay.

The companies outspent their opponents by 80-to-1 and when the votes were tallied their campaign contributions broke down to being more than $200 for each vote in favor of their position.

"Disappointment does not begin to describe how we feel about shutting down operations in Austin," Uber's Austin general manager Chris Nakutis said in a statement.

The stakes were high for the privately held Uber and Lyft, which say their background checks are already rigorous and ensure safety.

"Unfortunately, the rules passed by City Council don't allow true ridesharing to operate," Lyft said, adding it will suspend operations in Austin as of Monday.

That's right, both Uber and Lyft have long threatened to shut down their services if the repeal failed, warning that the city will lose tens of millions in business and that hundreds of drivers will lose their jobs.

Which isn't true, as the cost of the tougher background checks in Austin would have been less than the $8 million they spent lobbying for the repeal, but they figure they can force the city to come crawling back to them eventually.

Most likely I see a Republican-backed statewide measure that repeals the Austin ordnance soon.  In the meantime, the techbros will continue to whine.

Moose Versus Zombie

It seem Sarah Palin (who has been blessedly quiet these last few months because she actually looks sane next to Trump) is injecting herself into faux relevance again by going after GOP House Speaker Paul Ryan.

Sarah Palin will work to defeat House Speaker Paul Ryan by backing his primary opponent in Wisconsin, the former Alaska governor told CNN's Jake Tapper. 

Palin said in an interview that airs Sunday on "State of the Union" that her decision was sparked by Ryan's bombshell announcement to Tapper last week that he wasn't yet ready to support Donald Trump, the Republican presumptive nominee. Palin endorsed Trump back in January. 

"I think Paul Ryan is soon to be 'Cantored,' as in Eric Cantor," Palin said, referring to the former Republican House majority leader who was ousted in a shocking upset in 2014 when challenger Dave Brat ran to his right in a Virginia primary. 

"His political career is over but for a miracle because he has so disrespected the will of the people, and as the leader of the GOP, the convention, certainly he is to remain neutral, and for him to already come out and say who he will not support is not a wise decision of his," Palin continued.

I didn't even know who Paul Ryan's primary opponent is, and I kind of thought Wisconsin's primaries were over, but it turns out the primaries for congressional districts are on August 6, and the only other Republican in the race is a guy by the name of Paul Nehlen. Nehlen it turns out is the newest Tea Party hero of the Breitbart crowd after Paul Ryan's comments on Trump.

When House Speaker Paul Ryan said Thursday he wasn’t ready to support Donald Trump, the presumptive nominee of the Republican Party, his Wisconsin primary opponent saw an opening.

Following the Trump campaign’s lash-out on Friday, Paul Nehlen seized that opening, suggesting he will do what Ryan won't: support Trump.

“If Mr. Trump is the nominee, I will support that decision, because it will have been the will of the voters that got him there,” the Republican challenging Ryan for Wisconsin’s 1st Congressional District seat in the state’s August primary said in a statement.

Nehlen is seeking to gain an edge in the primary against Ryan, who won his 2014 primary by nearly 90 percentage points. This time around, the Trump campaign and allies have aggressively attacked the House speaker and Republican National Convention chair, with Trump spokeswoman Katrina Pierson intimating that Ryan is unfit for his role if he can’t support the presumptive nominee.

Nehlen now has Moose Lady on his side, for better or for worse.

This is going to be fun.

Sunday Long Read: The Perfect Drug

America's long opioid abuse crisis continues, and no drug is more responsible for the abuse of prescription painkillers the way Oxycontin is.  A new major LA Times investigation into the company that developed it, Purdue Pharma, is a frightening look at to what lengths Big Pharma will go to when it knew it had a $20 billion drug on its hands.

Over the last 20 years, more than 7 million Americans have abused OxyContin, according to the federal government’s National Survey on Drug Use and Health. The drug is widely blamed for setting off the nation’s prescription opioid epidemic, which has claimed more than 190,000 lives from overdoses involving OxyContin and other painkillers since 1999.

The internal Purdue documents reviewed by The Times come from court cases and government investigations and include many records sealed by the courts. They span three decades, from the conception of OxyContin in the mid-1980s to 2011, and include emails, memos, meeting minutes and sales reports, as well as sworn testimony by executives, sales reps and other employees. 

The documents provide a detailed picture of the development and marketing of OxyContin, how Purdue executives responded to complaints that its effects wearoff early, and their fears about the financial impact of any departure from 12-hour dosing.
Reporters also examined Food and Drug Administration records, Patent Office files and medical journal articles, and interviewed experts in pain treatment, addiction medicine and pharmacology. 

Experts said that when there are gaps in the effect of a narcotic like OxyContin, patients can suffer body aches, nausea, anxiety and other symptoms of withdrawal. When the agony is relieved by the next dose, it creates a cycle of pain and euphoria that fosters addiction, they said. 

OxyContin taken at 12-hour intervals could be “the perfect recipe for addiction,” said Theodore J. Cicero, a neuropharmacologist at the Washington University School of Medicine in St. Louis and a leading researcher on how opioids affect the brain. 

Patients in whom the drug doesn’t last 12 hours can suffer both a return of their underlying pain and “the beginning stages of acute withdrawal,” Cicero said. “That becomes a very powerful motivator for people to take more drugs.”

The bottom line is that Oxycontin was designed to addict patients, to hook them and reel them in and line Purdue's pockets with billions of dollars.  They knew full well that the drug wore off sooner than 12 hours and left patients in crippling pain and suffering from withdrawal symptoms, and millions were turned into addicts because of it.  They pushed this poison on to doctors and patients to deal with chronic pain of all types and counted the cash rolling in.

So yeah, don't tell me that the bad guys are street corner pushers and small-time hustlers when Big Pharma is the biggest drug kingpin of them all.