Discussion about this post

User's avatar
Peter Yastrow's avatar

I worked at Cantor Fitzgerald for many years. During that time I had some key insight into Howard Lutnick; he was an egomaniacal doofus. He was a tennis instructor before he wooed Bernie cantor into signing his firm over to him. Bernie’s widow sued Howard for the move, as Bernie was on his death bed and Howard shoved documents in his face-

Employees were exploited and intimidated. Howard lorded over the firm like he was a royal.

Now I have heard 9-11 changed Howard. He lost thousands of employees and his own brother, and if he had been in the office that day, he too would have died. That would certainly change most men-

But I don’t trust anyone with power of the magnitude a SWF would create-

Look at social security- FDR created a “piggy bank” for all of us, and now it’s possibly going to bankrupt us all…..the road to hell is paved with good intentions. Our government needs to stick to the basics and not be so high flying with their plans.

Expand full comment
Jeffrey L Minch's avatar

We actually have a sovereign wealth fund in the US. It's the State of Alaska's Permanent Fund.

Bit of history: The gigantic Prudhoe Bay oil field was discovered in 1968 and the state passed a constitutional amendment in 1976 creating the Alaska Permanent Fund and allocated 25% of state energy revenues to the APF.

In 1980, the State of Alaska created the Alaska Permanent Fund Corporation to oversee the APF and began paying dividends in 1982 ($1000 to every Alaska citizen).

The APF distributes annually 5% of its average value over the last 5 years to be allocated to state government (makes up 40% of budget) and dividends to citizens.

That allocation between the state budget and dividends has become a political controversy as the allocation is set every year. In 2024, it was $1702 per citizen.

The APF holds its wealth in the normal instruments: stocks, bonds, and other equities. The fund is $76B today and grows from both revenues and investment return.

In this instance, the source of funding is substantial and regular.

The State of Alaska has less than $500MM in General Obligation bonds, so the APF is an absolute surplus to the state coffers.

In many ways, public employee pension funds are similar to sovereign wealth funds -- I state this as to the ability to oversee the public good.

I can see an argument for a creatively and carefully structured US sovereign wealth fund as a means of imposing financial discipline, but then I think about the lousy stewardship of the Social Security Trust Fund (which was never supposed to have been commingled with the general acc't) and the fact we're $33T in debt.

I think we can wait on the US Sovereign Wealth Fund for a bit more.

JLM

www.themusingsofthebigredcar.com

Expand full comment
13 more comments...

No posts