Alaska Permanent Fund drops $5 billion
Published Thursday, October 9, 2008
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Stumble It!ANCHORAGE, Alaska -- The Alaska Permanent Fund has dropped $5 billion since August and is now worth less than $30 billion.
Fund managers say the drop could affect the amount in permanent fund dividend checks next year.
Checks are based on a five-year average of the fund.
Fund managers say they're concerned about recent market drops but look at the fund as a long-term investment.
Community Discussion
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Lets divey it up and get off this rock!
When the stock market crashes we get NOTHING, that would be disaster.
People, the government has every intention to use the fund some day to pay for government. The legislators vote every year if the people will get a share. This year you have seen the last of the large checks, how many of you were around when it use to be $300 a year? Now don't you wish you had spent the money on re locating? You haven't seen anything, till you see what is like living in Fairbanks when the economy is down the drain.
human resources are valued, none a worth millions
What don't you understand that one of the original intents of the fund was to pay for government when oil money dries up. It's $86 a barrel and the break even point for the State bidget is $70 a barrel. Do you think 700,000 people could ever pay enough income tax to cover the cost of the State budget?
it would have been better if miss sarah had kept the 1200 extra in the Permanent fund instead of handing it out prematurely?
The DOW dropped almost 700 today, closed below 9000. How much has today cost the fund? So much for a "bailout."
There are only 342,200 jobs in Alaska as of last month. Let's do some math $10 billion dollar state budget/342,200 workers = $29,222 per worker.
The dividend could get us an extra three years at the current operating costs of the state government.
i thought the extra $1200 was given out of the state's surplus; not the permanent fund.
Citizen: It was, but it was money that could have gone into the Fund, or better yet, used for capital improvements that will be impossible when there is no surplus.
Watching Perm Fund Corp head Mike Burns smugly assert "he felt" the bottom was near on last night's Channel 2 News (I'm in Cordova) I was struck by the fact of how close a resemblance there is between him and the rest of the Wall Streeters.
Essentially he and the rest of the Board are playing with other peoples' money so "What, me worry? is the result.
These guys are the ones who insisted we would be well served by playing with hedge funds, the least accountable and highest risk investments out there, but running with the big dogs is where they wanted to play.
Just how much do we pay and even more so how much have money managers world-wide made off of our Permanent Fund relative to the payments dispersed to Alaskans?
The beauty of hedge funds (including those in which we have invested) is they do not have to account to the people of Alaska for how much they have earned or lost and our legislature is complicit in allowing this to happen.
Hedge funds have sued states whose pension funds are invested in HF's
to keep things as arcane as possible, it is a pre-established pattern and our PF Board led us willingly to the slaughter.
We had a great chance to invest in state-wide natural gas infrastructure with that -$10 billion and instead have a state program for temporary energy relief that cost $1.2 billion and only feeds the oil companies for another winter at exorbitant prices.
The governor and legislature are just as bad and responsible for this fiasco.
The warning flags were raised the winter of 2006 and we were rebuffed and ignored.
Remember this: Less than 1 year ago we were pushing $40 billion in our Permanent Fund Corpus.
Today we are dropping with the rest of the market and will have achieved a 25% loss shortly in less than 1 year.
Heads need to roll and investigations begin while we can still afford it.
Or conversely, do you think we can get a bail out, perhaps like Wall Street?
More likely we will share the fate of Iceland which was just told no by Russia.
Nice job, PF Board members.
PEOPLE RELAX, THE MARKET WILL GO BACK UP, IT ALWAYS HAS AND ALWAYS WILL.
IT IS JUST ASHAME THAT ALL YOU MARKET EXPERTS AREN'T IN CHARGE OF THE PFD. WOW, LOTS OF BRILLIANT MINDS BEING WASTED HERE ON THIS BLOG. SECOND GUESSING WHAT BOARD MEMBERS SHOULD HAVE DONE IS EASY AFTER SOMETHING BAD HAPPENS.
AND PEOPLE ARE FREE TO DO WHAT THEY CHOOSE WITH THEIR PFD, IF NOT, TELL US WHAT YOU INVESTMENT EXPERTS DO WITH YOURS.
DOOM! DOOM! DOOM!
The last time I checked the APFC site, the fund was down to 30.5 billion. Earlier this year it was almost 40 billion- so the headline is deceptive. We've really lost about 9 billion.
Could've invested in Alaska and built a gasline with the money we've lost.
RELAX, may be more believable without the CAPS.Now I am scared(and I'm fearless).Now it's time for some quiet,angry drinking or as I call it, Thursday Night.
Right on mackie1, maybe a little over the top with the caps, but at least someone read it. I agree, it is Thursday and I will toss a few back myself tonight. Hope I didn't scare you to much, just trying to let these folks know it will be alright and not to jump anytime soon.
The same people whining now were the same people whining in 2000 when the dotcom bubble burst and the market faltered. They are the same people who whine every time the market drops by a large margin.
I prefer to think of them as just really stupid people.
My 401k is getting crushed. My personal investment account is getting crushed, as is my sons college savings investment account. It stings to see all that red. But I invested in solid companies with strong dividends that will eat up weaker competition and gain market share throughout this plunge. I can sleep at night.
The people who manage the PFD are not stupid people. They know this isn't a short term game, it is a long term strategy. They also know how to sue the pants off an investment company that loses our money with overly risky investments (they've done it before).
The market has tanked like this before and believe it or not the market has tanked worse then this before. Each time it recovers and moves higher. Each time it put great companies on sale for great prices. I only wish I had more money to invest right now.
I don't doubt that things will get better (after getting much worse) but the point comes where the Fund itself becomes this shimmering untouchable big steaming pile of POOF!...oops, there went $10 billion we could have really used for infrastructure had it been in a more conservative investment.
The bleeding is far from over and the signs have been evident for well over a year that the rock and the hard spot were on a collision course yet "let's just take some lumps" because until the investments actually become something concrete they remain just numbers on a glossy Department of Revenue report.
Complacency wrought this and if we actually enter a depression (distinct possibility) that missing money represents options no longer available to do good works.
I say we're getting a little too used to throwing big numbers around as if they lack consequence.
Absolutely right that the PF was meant to fund government in hard times but even more we intended to save to keep it out of government's hands so they couldn't piss it away.
Allowing it to be looted from the stock market was not and is not a viable option to the former scenario.
Sell, Sell, Sell, Sell, Sell, Sell, Sell, Sell,
NOW!
As a potential investor in the markets for over 20 years, I have been watching the market closely as the Fed proposed the bail out. When the proposal failed in the House the market bounced up. When the Senate passed it, the marked sank. When the House passed it, and the President signed the Bail out, world markets tanked.
If the biggest bank (the United States Treasury) just doubled it's debt to income ratio, then the markets have good reason to worry. We have a credit problem, so instead of reducing our credit debt and reasuring the markets that the US is solvent, we borrow more money. As a potential investor, that scares me. Why would I invest in an overextended market that is secured by bonds from a government that just overextended it's own credit. That action made every stock market in the world nervous. Without a solvent America, there is no safe harbor in the storm. I think it will get below 7000 by the end of the month. Then maybe it will bounce back slowly at first, and after the innaguration it will climb out of the toilet.
Expect nothing, and you won't be disappointed.
Expect nothing, except to make it through hard times by the sheer force of your own will, and anything extra will seem like a gift from God.
I forget who, but a few months ago, a "regular" who posted here at the DNM said something along the lines - in reference to those us who, with "rightful" indignation, expected the state to share its oil profits windfall among the populace - that person had the incredible courage to ask whether we'd be equally willing to share our own individual bounty should the state fall far short of a break-even point, and fall on hard times.
I don't know how everyone else will answer that question. All I can say, now, is that it was an incredibly insightful question to ask. In retrospect.
These are hard times for everyone in the U.S. It'll only be a matter of time before we, who live in a wealthy, oil-producing state, feel the pinch as much as everyone else in the lower 48.
Let's face the facts. We're all going to have to sacrifice, we're all going to have to make do without in order to get through the hard times ahead.
I love Alaska. I've lived here for more than half of my life. It's all about survival, up here. That's what it's always been about. And we'll do just fine. We always have.
We'll make it through this. And just about anything else.
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