Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

How Norway spends its $882B global fund

economist.com

Post reply on HN
Print view View original

131–140 of 159 posts

Re: How Norway spends its $882B global fund

#131

Post by dogma1138 »

cpach wrote: post #96
dogma1138 wrote: post #15

Earlier quoted context omitted.

Not bad, but not enough to cover the current levels of household debt in Norway, while a large portion of the debt is tied to mortgages the mortgage debt in the Norway have been increasing faster than income for quite a few years now. http://www.tradingeconomics.com/norway/households-debt-to-gd... This isn't a problem unique to Norway, Norway is just one of the biggest offenders, even in the Nordic countries there is…

"Sweden capped the mortgage term to 105 years" Do you have any other citations for this? I have never heard about this in the Swedish news and I'm quite curious where The Telegraph got that information from.

Swedish financial authority:

http://www.fi.se/upload/43_Utredningar/20_Rapporter/2013/bol...

There are also reports from various global banks and financial organizations, google is your friend.

Re: How Norway spends its $882B global fund

#132

Post by boulos »

hiddencost wrote: post #49
tormeh wrote: post #23

Earlier quoted context omitted.

People have done it before. It has always turned out to be luck. Fantastic track record until they cease being lucky. So, cynicism and economic orthodoxy aside, that sounds like a really cool company. Has anyone tried just tossing a big dumb neural network on stock data and investigated whether it can make money? It sounds very obvious, but a quick googling returns little. But I guess the investment industry is prett…

> Has anyone tried just tossing a big dumb neural network on stock data and investigated whether it can make money? ... yes.

One of our Solutions Architects wrote this up for amusement: https://cloudplatform.googleblog.com/2016/03/TensorFlow-mach...

Re: How Norway spends its $882B global fund

#133

Post by dogma1138 »

ckinnan wrote: post #64
dogma1138 wrote: post #40

Earlier quoted context omitted.

Different sovereign/public funds have different regulations, they are usually split between equity and fixed income, Norway splits it to 60% equity, 5% real estate, and 25% fixed income. As far as the fixed income goes most of it is invested in treasury bonds, while the equity is invested in primarily the international stock markets. Overall the Social Security Act does disallow prefunding of the fund with marketable…

Actually the state funds do hold real assets but the federal system does not, there's no $3 trillion dollars to invest, the Social Security Trust Fund is just a non-marketable claim on the U.S. Treasury. It is an accounting placeholder-- a promise if you will-- there are no assets of any kind backing it. When the IOUs come due the Treasury will have to cut spending, raise taxes, or borrow new funds.

This isn't exactly the case, "real assets" is a tricky term. There is a difference between the SSA and the Social Security Fund, the SSA is funded through the budget "independently" of the fund, in some years the SSA have been funded at a deficit.

Yes you can say that the fund is an "accounting placeholder" just like many other economic tools, when you take a loan from a bank it doesn't give you money, it effectively gives you a tradeable IOU against yours even tho you treat it as currency.

To put in in a simpler terms the year to year budgetary deficit of the SSA against the payout claims should be treated as a separate thing to the actual Social Security Fund, if the US government or any other institution with sufficient means and credit would make a commitment to pour 3bln dollars into a bucket, said bucket is now worth 3bln dollars even if it is empty.

Re: How Norway spends its $882B global fund

#134

Post by Vinkekatten »

webbore wrote: post #29
netcan wrote: post #26

Norway's oil money story is one of the weirdest. Are there any examples in history where a country has saved up such a big stash? Are they planning to retire young, as a nation?

I live in Calgary, Alberta which is pretty much the exact counterpoint to Norway with a very similar historical starting point (size, population, dynamics). It doesn't matter who's in power, all our governments spend like drunken sailors on shore-leave, no sales tax to even out the boom/bust (and counter low-ish taxes), A savings fund that is now empty going into an incredibly rough period. I'm not says one is better…

Not sure if relevant, but in Oslo today a half-foot sub-of-the-day with no drinks runs you $5.50 canadian. A big mac with a menu is $14.50

Re: How Norway spends its $882B global fund

#135

Post by blahbap »

terda12 wrote: post #79

Visiting Norway, I always thought it is kind of a weird country. On one hand it's one of the richest countries in the world. On the other hand, I've seen so many young Norwegian women work hard cleaning toilets and hotel rooms. Such jobs would be considered "low rung" at in the US but in Norway they treat their low rung jobs as something to be proud of.

I am not saying it needs to be young, Norwegian women, but who would you expect to see cleaning toilets?

Re: How Norway spends its $882B global fund

#136

Post by Vinkekatten »

terda12 wrote: post #79

Visiting Norway, I always thought it is kind of a weird country. On one hand it's one of the richest countries in the world. On the other hand, I've seen so many young Norwegian women work hard cleaning toilets and hotel rooms. Such jobs would be considered "low rung" at in the US but in Norway they treat their low rung jobs as something to be proud of.

A full time shift job with no overtime at a normal grocery store (40 hrs/week) should earn you about 350 000 - 400 000 nok, or usd 42-48k

Keep in mind the cost of living is high in Oslo.

Re: How Norway spends its $882B global fund

#137

Post by Broken_Hippo »

dogma1138 wrote: post #15
harryh wrote: post #2

882 B / 5.2 Million ~= $170k for every citizen of Norway. At 4% a year that's $6,800 each in annual income. Not bad!

Not bad, but not enough to cover the current levels of household debt in Norway, while a large portion of the debt is tied to mortgages the mortgage debt in the Norway have been increasing faster than income for quite a few years now. http://www.tradingeconomics.com/norway/households-debt-to-gd... This isn't a problem unique to Norway, Norway is just one of the biggest offenders, even in the Nordic countries there is…

I'm not certain about some of those mortgages: From everything I've learned since I've been in Norway, after the whole financial crisis they took steps to minimize some of the housing stuff.

Housing is expensive where I'm at: It is much cheaper outside of the city. There is debt tied to the house, if you own a house.

The average mortgage is 20-30 years - what you are stating isn't the average. This isn't actually all that much outside of the rates in the US, and part of the reason is to keep housing affordable for people. What is different is that people tend to stay at a job for a much longer time frame.

In addition, housing comes with a required down payment, depending on your age. I think for folks under 23, they have to have 10% down payment: Everyone else should have 20% (or possibly 25%), capped at something like 3.5 times income.

As far as debt goes, you can't really inherit debt here. You can inherit a bit of debt through inheritance - ie, tax on a house that had value. The other way to have that is for parents to co-sign on a loan, but that isn't the same sort of thing. There are some laws to prevent children inheriting debt from what I understand.

Re: How Norway spends its $882B global fund

#138

Post by jsmthrowaway »

MarkMc wrote: post #123
Havoc wrote: post #20

Earlier quoted context omitted.

I'd venture that at that scale you don't really have much of an option except going active. Passive is essentially swimming with the stream, but what if you're big enough to affect the stream...you're kinda active in a way already right there.

They are still only 1% of global stocks - hardly 'big enough to affect the stream'

It's nearly a trillion dollars. Yes, a trillion dollars is market-making. If it all moved at once world economies would shit themselves for a time.

Even beyond that, there are only about 200 sovereign states in the world. I'd say a country like Norway, with fewer citizens than the state of Washington, controlling 1% of global anything is noteworthy and undeserving of scoff.

Re: How Norway spends its $882B global fund

#139

Post by xyzzy123 »

cheriot wrote: post #104
xyzzy123 wrote: post #75

Earlier quoted context omitted.

Which is funny because BH have literally the opposite bet: http://longbets.org/362/ It seems a bit contradictory, but BH is a holding company versus a hedge fund.

It's not that contradictory. As long as the market for stock pickers overcharges, people can be good at it and a bad deal at the same time.

Right but if you follow the theory if you had alpha greater than fees then you could essentially control all funds available for management (up to the scale where your atrategies stop working). Which is sort of its own reductio ab absurdum.

Re: How Norway spends its $882B global fund

#140

Post by shiven »

Gustomaximus wrote: post #70
shiven wrote: post #18

Earlier quoted context omitted.

For example, there are US based asset managers with private funds that generate 20-30-40% per annum, for over 20 years. Pure Horseshit. Plain and simple. Or, in other words: "Pics. Or it didn't happen."

I dont have pics, but insight. Typically these are funds exclusively for high net worth individuals. They are not advertised. They select who they let in and have limited pools of investment given they invest in areas/business that dont scale to trillion dollar levels type thing. They get to invest in business etc before the open market via their relationships which is I assume why they can get these returns. My sour…

So, by its very nature, investing based on access to privileged opportunities. Who's to say it is not based on leveraging privileged information too? In other words, a type of insider trading. Or market pre-loading.

Guess public sentiment hasn't caught up to such practices, yet, so they can get away with it.

What is the failure rate for such private funds? Obviously, we may never hear of their failures, just as we don't hear of their successes.

Post reply on HN