The Oil Crash Has Caused a $1.3 Trillion Wipeout

05-Aug-2015

It’s the oil crash few saw coming, and few have been spared as it erased $1.3 trillion, the equivalent of Mexico’s annual GDP, in little more than a year.

Take billionaire Carl Icahn. When crude was at its peak in June 2014, the activist investor’s stake in Chesapeake Energy Corp. was worth almost $2 billion. Today, oil has lost more than half its value, Chesapeake is the worst performer in the Standard & Poor’s 500 Index and Icahn has a paper loss of $1.3 billion. The S&P 500, by contrast, is up 6.9 percent in that time.

State pension funds and insurance companies have also been hard hit. Investment advisers, who manage the mutual funds and exchange-traded products that are staples of many retirement plans, had $1.8 trillion tied to energy stocks in June 2014, according to data compiled by Bloomberg.

“The hit has been huge,” said Chris Beck, chief investment officer for small- and mid-capitalization companies for Delaware Investments, an asset management firm in Philadelphia with $180 billion in assets under management. “Everybody was thinking that oil would stay in the $90 to $100 a barrel range.” (by Asjylyn Loder, Bloomberg Business)