Josh Sigurdson talks with author and economic analyst John Sneisen about the most recent losses at the Norwegian Wealth Fund.
We last reported on the fund last year as we saw a vast level of euphoria and the clear signs of a bubble growing on a great scale.
Well now Norway’s 1 trillion dollar piggy bank, the world’s biggest sovereign wealth fund announced that it just reported its first quarterly loss in two years as it dealt with a global selloff in equities in the first three months of the year.
The fund’s CEO Yngve Slyngstad says,
“The most important expression of risk in the fund is that the strategic equity share is set to 70 percent. This means that fluctuations in the fund’s value are predominantly determined by the development in global stock markets.”
Well over all, the global stock market going forward does not look good over all. That’s a whole other bubble, but of course it’s a domino fall.
The global pension fund in Norway booked negative returns of 1.5 percent for the first quarter of the year, or a loss of US$15.1 billion (171 billion kroner).
Their stock return was negative 2.2%.
The fund held $75 billion in U.S. Treasuries at the end of the first quarter, $22 billion in Japanese government bonds and $14 billion in Germany’s debt. Its bond position fell 0.37% in the quarter.
This news comes a month after the fund warned that it could lose US$420 billion from its value, or 40% this year alone if the market crashes and the Norwegian Krone strengthens.
Now, the Norwegian Sovereign Wealth Fund controls close to 1.5% of global stocks. They are a massive player in global markets and for them to go down is to cause everything else to go down and vice versa. The power they wield cannot be understated.
As always this goes back to why we need to be self sustainable, financially responsible and independent. We must take it upon ourselves to reject the debt that consumes us and insure our wealth for the future.