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Save Alabama PACT Discussion Forum » Posts by Interested Parent
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A report card for each legislator should be posted here, with contact information,the last commitment from the legislator, and his actions in support or opposition (including quiet opposition) to a relief bill.
Remember this--it is never as it seems at the Legislature. Rarely does someone come out and honestly say they are against a bill. More often, a bill dies for failure of affirmative votes, or a failure to get high enough on the special order calender, or a failure for a committee to obtain a quorom.
I support reasonable efforts to achieve a negotiated solution regarding the PACT, simply because it might provide the best possible outcome. If that doesnt work (and I dont think it will) a resolution through one of the lawsuits against the state, and the fiduciaries, appears to be the next best option. An amended version of the pending Montgomery lawsuit might work.
I read a note of thanks to Paul Hubbard for supporting using the Ed. Trust Fund under certain circumstances to help fix the PACT. I would be shocked, however, if Hubbard would in reality ever allow the Educ. Trust Fund to be used.
I would also be surprised if the timing of Lucy Baxley's comments were accidental. They fit perfectly with the state's defense against paying the contracts, and are a boost to AEA and others to kill a PACT rescue.
The only legislative chance for this bill is a very organized, concerted effort, in which each legislator is made to feel as if his seat is in jeapordy if he dosnt vote a particular way. That is not happening at present.
The action today kills the PACT unless there is judicial intervention requiring payment. There will be no voluntary legislative funding. This is all a joke, and the insiders know it.
If this was a normal situation involving a non-profit corporation, the insurance carriers for all of the fiduciaries would be kicking in to help offset the losses caused by the mismanagement.
The majority of the resopnsibility here falls on Ms. Ivey. She was in charge when the critical decisions were made and maintained that resulted in an entirely inappropriate risk profile for this fund, and failed to seek a fix before the crash.
I have a legal and finance background, reviewed many of the financials, and are familiar with the RSA report.
Statements like "The stock market collapsed last year the worst in 4 generations and Kay Ivey is getting the blame for an investment fund decreasing in value" is a canard. Its the type of statement that has confused and delayed a true resolution of this problem.
Of course the market tanked. But most other large educational endowments incurred much lower losses over the same period. The risk profile, and assumptions, adopted by Alabama PACT was inappropriate for a fund it its outflow horizen and profile. The state treasurer made it worse by being slow to address the issues publicly, and then making broad brush statements like "everybody lost money in the stock market".
Now the State Treasurer is making things worse, by publicly opposing certain types of state financial support for the PACT, and continuing to blame the entire problem on overall market conditions and rising tuition. Sure, these factors are a major contributor. But PACT is in the sorry state that it is in because the administrators were unwilling, or unable, to address this risk in a responsible fashion up front. They were chasing too high returns because the PACT business model in Alabama became unsupportable several years back. That increased the risk and volatility of the fund.
Kay Ivey isnt a bad person. We have all screwed up in our lives, and many of us have made bad decisions in our money management, regardless of whether we used professionals to carry out our decisions. Her problem is that she refuses to admit any culpability for PACT's state of affairs. Her efforts to defend her own reputation have hindered a resolution.
If PACT was a booming success, don't you think she would be taking credit for it? In such circumstances, she certainly wouldnt be saying "everyone made money in the stock market."
Its all about leadership.
I am much more sympathetic to some of the PACT Board members. Several are new, and all relied to a large degree on reporting from the State Treasurers office. To my knowledge, none have made any statement opposing any type of state support.
Am I the only person outraged? I have never encountered someone like this in office.
She keeps misrepresenting facts; most recently implying that PACT had a good last fiscal year when it continued to trail other similar funds in returns.
She also continues to sell PACT parents down the river, by publicly opposing any public funding source.
Unbelievable.
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Save Alabama PACT Discussion Forum » Posts by Interested Parent