MONTGOMERY, AL (WSFA) - So, what does all the volatility on Wall Street really mean to folks like you and me? Thursday, we sat down with a man who's arguably the state's leading expert on the stock market to get some answers. And, state retirement systems CEO David Bronner didn't mince words in describing what's happening and who's going to pick up the tab.
He began by saying "It's extremely scary." Even the professionals who deal with big, money numbers everyday are fearful about what may happen next. "In the national economy right now - the last three days wealth or money in people's hands has gone down roughly three trillion dollars - not a billion dollars, not a million dollars, not 500 million dollars but three trillion dollars."
Most of those losses are in the stock market - stocks with companies that also took on some bad or toxic loans. Bronner explained what that means to you and me. "That's the value of your stock or your portfolio. When you go look at your 401 and it went from, let's say just make up a number, went from 50-thousand to 30-thousand. That's where it came from. It came from your hide. It came from everybody's hide in America that owns stock."
Those financial institutions that are asking for help have become quite familiar lately; however, there are more fears that those money troubles may spread to other financial institutions even regional banks like for example Regions.
"Regions is a good regional bank. The problem is that all banks are under pressure right now because of all these loans that were created for about an eight year, ten year period in which we don't know how toxic they are," says Bronner.
And, with the stock market on a rollercoaster, Bronner says the pension fund is losing money like everybody else, but teachers and public employees even taxpayers don't have to worry. "The Retirement Systems is in a little different position than a lot of other things because we diversified over the last thirty years. I was a big believer in not getting beat up totally, all the time, or be a captive totally of Wall Street."
Despite the economy, state workers and teachers will get their retirement benefits because they're guaranteed. If there's not enough money in the pension fund, then the employer, meaning the legislature, will have to put more in. Bronner says there's plenty of money there.