Saudi Arabia Postpones ‘Davos in the Desert’ After Houthi Attacks

The episode begins with news that Saudi Arabia has postponed its flagship investor conference, originally scheduled for next week, until the following year. The postponement is attributed to escalating conflict with the Houthis, including multiple attacks on Riyadh’s airport, which created safety concerns for high-level executives expected to attend. Notable attendees such as Jamie Dimon and Jane Frazier have been considering cancellations, with some already cancelling meetings, indicating the impact of regional instability on Saudi Arabia's economic plans. Stephen Kalin, WSJ foreign correspondent, explains that the conference, organized by Saudi Arabia’s Public Investment Fund (PIF), is a major event for the kingdom's economic ambitions under Crown Prince Mohammed bin Salman. The conference has been a symbol of Saudi's efforts to attract foreign investment and showcase their economic transformation plans since 2017. Its cancellation signals a significant setback, highlighting how regional geopolitical issues like the Iran conflict and the Yemen conflict with the Houthis are disrupting even the most prominent economic initiatives.

The program discusses a separate legal case involving Abdul Rahman Al-Fazan, a Saudi national accused of bugging an OpenAI conference room. During proceedings in a California court, prosecutors revealed Al-Fazan had been in contact with a member of the Saudi royal family regarding job opportunities in Saudi Arabia before his arrest. Prosecutors argue that he poses a flight risk, which has led to his continued detention, while his lawyer plans to address this argument in court. The Saudi Embassy in Washington declined immediate comment, leaving an uncertain diplomatic response. This segment illustrates ongoing legal tensions linked to Saudi nationals, possibly connected to broader issues of privacy, espionage, and diplomatic sensitivities.

In a notable move, Elon Musk announced on X (formerly Twitter) that he intends to give each of the approximately 73 million children in the U.S. one share of SpaceX stock next year. He described this as the "first of many" such actions, potentially amounting to around $10 billion based on SpaceX's current share price. The initiative follows gestures by other tech billionaires, such as Anthropic, and seems to leverage government programs aimed at channeling wealth into children's accounts. Musk’s announcement is viewed as a philanthropic effort to distribute wealth and perhaps foster interest in space and technology. The mention of a government program for donations suggests he is planning to utilize official channels to facilitate this large-scale giving.

The episode covers the pharmaceutical industry's investment in a new class of drugs called protein degraders. These drugs work differently from traditional treatments by destroying target proteins in disease cells without requiring a nook or cranny for attachment. Approved for certain cancers, these drugs are being tested for autoimmune diseases and neurological conditions like Parkinson's. Lizzie Lawrence explains that most major pharma companies are involved, but uncertainties remain regarding their most effective use and safety risks, such as inadvertently killing healthy proteins. Researchers are aware of these risks but endorse ongoing monitoring. This segment underscores a significant pharmaceutical innovation that could expand treatment options but also involves substantial unknowns regarding safety and efficacy.

Markets reacted positively with tech stocks recovering and the NASDAQ closing up over one percent after a recent decline, while the S&P also rose moderately. In contrast, the Dow and oil prices remained largely unchanged. In Europe, stock indexes declined amid protests in France that resulted in extensive damage and injuries, prompting the government to impose partial curfews and deploy additional police forces. These protests, driven by widespread inflation and economic unrest, are expected to continue, affecting regional stability and financial markets. This segment illustrates the global economic ripples from local unrest and the resilience of the U.S. stock market, especially within the tech sector, amidst geopolitical tensions.

Nicholas Miller explains that the US housing market is diverging, with high mortgage rates above 7% suppressing entry-level home sales, leading to slower or falling prices in that segment across major metros. Homebuyers are seeking lower prices or concessions to offset high monthly payments, resulting in decreased profits for builders focused on cheaper homes. Conversely, the luxury housing market is thriving due to buyers' access to large cash reserves, home equity from previous sales, and less sensitivity to rate hikes. Regions like San Francisco, boosted by AI-related wealth, see luxury prices rising, while Midwestern cities such as Cleveland and Pittsburgh see an influx of first-time buyers, with starter homes’ prices increasing faster there. Builders are adapting by shifting focus toward the luxury market or trying to reduce costs on entry-level homes to stay profitable.

The program concludes with a discussion of the new documentary 'You Can See Everything,' which explores Elizabeth Holmes' rise and fall with new insights. Hosted by Esther Zuckerman, the segment highlights the film's remarkable success, with a sold-out opening weekend across hundreds of theaters, scoring the second-best opening for a documentary since 2004. The film's appeal is attributed to the pairing of comedian Nathan Fielder, known for his documentary-style comedy shows, with Elizabeth Holmes, creating a fascinating and unpredictable narrative. Esther Zuckerman describes the documentary as captivating, with a runtime of three hours that viewers find engaging without feeling the length. The buzz and secrecy around the film’s twists contribute heavily to its popularity, making it a cultural phenomenon.