Oct 16, 2018

Axios PM

By Mike Allen
Mike Allen

Situational awareness: Netflix crushed earnings, and its stock is up roughly 15% in after-hours trading. Go deeper.

1 big thing: The Saudi problem that won't go away

Illustration: Sarah Grillo/Axios

The U.S.-Saudi relationship survived 9/11 and is unlikely to end over the assumed killing of journalist Jamal Khashoggi, but the evidence against crown prince Mohammed bin Salman (MBS) is increasingly hard to ignore.

Driving the news today:

  • Turkey turned over the passport information of seven of the 15 Saudis suspected in Khashoggi's killing to the Washington Post, which blurred the photos and names before running them online.
  • U.N. human rights chief Michelle Bachelet has asked the Saudis to forgo usual diplomatic privilege in order to facilitate the investigation (neither the Saudis nor the U.S. are likely to have any interest in this request.)
  • Sen. Lindsey Graham said on Fox & Friends this morning that "toxic" MBS "can never be a leader on the world stage" and that sanctions are coming, no matter what Trump does.

Between the lines: President Trump has now twice appeared to take Saudi denials about Jamal Khashoggi's disappearance at face value:

  • Trump today: "Just spoke with the Crown Prince of Saudi Arabia who totally denied any knowledge of what took place in their Turkish Consulate. He ... told me that he has already started, and will rapidly expand, a full and complete investigation into this matter."
  • Trump yesterday: "[T]he King firmly denied any knowledge of it.  He didn’t really know.  Maybe -- I don’t want to get into his mind -- but it sounded to me like maybe these could have been rogue killers... All I can do is report what he told me.  And he told me in a very firm way that they had no knowledge of it.  He said it very strongly."

The big picture: The Saudis and Trump administration each have incentives to stop this from becoming a lasting crisis.

  • "Officials said the dilemma comes at a terrible moment for the Trump administration, which will reimpose harsh sanctions against Tehran on Nov. 5, with the intent of cutting off all Iranian oil exports." [NYT]
  • MBS is aggressively courting U.S. and western investments, hoping to diversify his country's finances beyond oil revenues.
  • And the Saudis are major importers of U.S. weapons, and will be wary of potential sanctions.

The bottom line: But this story is hurtling to a public conclusion, regardless of whether the Saudis decide to be forthcoming.

Go deeper: The companies who have backed away from Saudis

2. What you missed
  1. Sen. Heidi Heitkamp is issuing personal apologies to women for running a political ad about victims of domestic violence, sexual abuse and rape that misidentified some as victims and used others without their consent. Go deeper.
  2. There were a record 7.1 million U.S. job openings in August, the most since the Department of Labor began tracking the data in 2000. Go deeper.
  3. Morgan Stanley and Goldman Sachs have valued Uber at as much as $120 billion in IPO proposals. Notably, they are valuing UberEats at $20 billion. Go deeper.
  4. There is now a 12-point gap in support for the GOP tax cut law, according to a new pre-election poll conducted by Greenberg Research and Democracy Corps for the American Federation of Teachers.
  5. 2020 watch: Julián Castro, the former San Antonio mayor and former HUD secretary, told Rolling Stone that he is "likely" to run for president.
3. 1 pod thing

Boston Celtics co-owner Wyc Grousbeck joined the Axios Pro Rata podcast today to discuss the upcoming season, which begins tonight when the Celtics play the Philadelphia 76ers.

  • More topics: Legalized sports betting, how basketball operates in a digital media age, and yesterday's passing of fellow league owner Paul Allen.

Put on those headphones.

Mike Allen