Wednesday, June 09, 2010

Why does the US hate NJ's Teachers and California's Cops?

Of course, the government doesn't hate teachers and cops, but as the talk of a possible dividend cut at BP increases, it continues to crush the stock which has been roughly cut in half over the past seven weeks.

I mention NJ and California because the pensions in those states are listed as owning 51 million and 36 million shares of BP. That's a hit of $1.53 billion and $1.1 billion respectively. However, that pales in comparison to the hit that UK pension participants are facing.

"The share collapse means a £15,000-a-year pension will be cut by up to £400 a year with possibly worse to come."

However, I've seen estimates that indicate up to 1 pound out of every 6 pounds paid by the UK pension system is derived from the BP dividend. If they eliminated their dividend a pensioner that had a 15,000 pound pension could see it fall to 12,500 pounds immediately.

Cheers!

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