Here comes to dumbest news of the day - the New York State Comptroller, having forgotten that risk follows return courtesy of Bernanke and Obama's Global Put, has announced that the New York State Pension Fund will sue BP for the loss in BP shares. This is almost certain to lead to a massive surge in the troubled company's shares. According to recent 13F reports, the New York State Common Fund held 11 million shares of BP, at a end of Q1 value of $192 million. It is fair to say this value has been cut in half by now. If the NY fund is willing to sue a firm after it has lost about $100 million on a soured investment, things at the pension fund must be beyond bad.
We are paitently waiting for utterly trashed CalPERS to join the fray any minute. As the LA Times reported yesterday, the California pension fund lost $285 million on BP, while total US pension fund losses have totalled $1.4 billion.
After dropping a quarter of the value of its $200-billion portfolio during the recession of 2008 and 2009, the country's largest public pension fund is posting more big losses because of the massive 2-month-old BP oil spill in the Gulf of Mexico.
Since April 20, the 58 million BP shares owned by the California Public Employees' Retirement System lost $285 million, dropping from $586 million on April 20 to $301 million, according to an analysis by Bloomberg News.
BP-related losses for all U.S. pension funds totaled $1.4 billion as the value of BP stock tumbled 47%.
CalPERS, which invests broadly in nearly all publicly trades stocks in the United States and in foreign markets, "intends to engage BP on corporate governance issues," said Pat Macht, the pension fund's director of external affairs.
"BP is on our radar screen," she said. "With our long-term investment horizon and our well-diversified portfolio, we are managing this going forward."