Why Saudi Arabia Keeps Losing Billions and What It Teaches Us About Smart Investing

The ‘Muppet’ Problem Is Real and It’s Bigger Than You Think

Goldman Sachs employees were caught writing emails calling their own clients muppets. Not a rumor. Not a conspiracy theory. It happened. The idea was simple: certain clients are so unsophisticated, so disconnected from what they’re actually buying, that you can push anything on them and they’ll take it. On Wall Street, I heard the same thing about physicians and surgeons. They called those deals dumb doctor deals. The attitude was the same: find someone with money who doesn’t know what they don’t know, and sell them whatever you can.

Saudi Arabia, despite having sovereign wealth and geopolitical leverage, has become one of the biggest muppets in global finance. And the reason is actually straightforward once you understand it.

Why Having a Money Faucet Is a Financial Curse

The Saudis have something almost no other investor has: a commodity the entire world must buy. Oil revenue flows in regardless of how badly they deploy capital. That means there is almost zero pressure to become disciplined investors. When you can just turn the faucet back on, losses don’t sting the way they should.

This creates a dangerous dynamic:

• Wall Street smells the easy money. If a client won’t hold you accountable for losses because more money keeps flowing in, you have every incentive to pitch your worst ideas to them first.
• Accountability disappears. Discipline in investing comes from consequence. Remove the consequence and you remove the incentive to do better.
• The relationship becomes predatory. Advisors stop acting like partners and start acting like salespeople pushing product they know is flawed.

Sandy Weill, one of the most powerful names in American finance, was photographed sitting in a tent in the desert with Saudi royalty. I don’t need to spell out what was happening there. He was drinking their milkshake, and he was going to take their capital and lose it.

The Track Record Speaks for Itself

Look at the actual history here:

• The Saudis poured significant capital into Credit Suisse shortly before it collapsed in the banking crisis that also took down Silicon Valley Bank. That money evaporated.
• LIV Golf, the Saudi-funded professional golf league designed to compete with the PGA Tour, just canceled its grand finale because Saudi funding began to dry up. A sports league built on essentially unlimited petrodollars couldn’t sustain itself.
• Across multiple decades and multiple sectors, the pattern repeats. Big investment, flashy announcement, quiet implosion.

What This Means for the Average American Investor

You don’t have an oil faucet. I don’t have one either. That means the lessons here are critical for regular investors who can’t afford to keep absorbing bad advice and bad products.

• Ask who benefits from the recommendation. If your advisor is pushing a product enthusiastically, find out how they’re compensated for selling it.
• Understand what you’re buying. Not the brochure version. The actual mechanics, the fees, the exit strategy, and the realistic downside.
• Accountability is your protection. Unlike sovereign wealth funds, you have the ability to fire an advisor, report misconduct, and demand transparency. Use that leverage.
• Track records matter. LIV Golf looked like a disruptive force backed by unlimited capital. The fundamentals were never there. Flashy money doesn’t change bad math.

The Core Lesson

Wall Street will always find its muppets. The goal is to make sure you are never one of them. Discipline, skepticism, and a willingness to ask hard questions are the only real defenses an investor has against an industry that has proven, repeatedly, it will take your money if you let it.