Thursday, January 26, 2012

How about a (bigger) loan?

Down in Juneau today, the House Special Committee on Fisheries has a 5 p.m. hearing scheduled on two interesting items.

The first is House Bill 261, which provides for larger state loans to help Alaska residents buy commercial fishing permits.

This sponsor statement explains more fully what the bill is about.

The Bristol Bay Economic Development Corp. has sent in a letter supporting HB 261.

Cordova District Fishermen United also likes the bill.

The second item on the committee's agenda is this resolution seeking to designate one sportfish seat and one subsistence seat on the North Pacific Fishery Management Council.


Anonymous said...

Interesting concept - for those young Alaskan folk who are being sheparded to buy into a "lifelong" fishery career, the bill allows the kids to buy into the now predominately catch share based fisheries by borrowing up to $200,000 to get into Alaskan commercial fisheries.

How much of the loan is going to be directed towards the purchase of catch shares, which were "gifted" to the now aging grey beards, who now want to cash out from the catch share based fisheries for a nice retirement boost?

This is the fundamental issue of the long-term sustainability of the catch share scheme - the initial program shares were gifted - and now you need to get a slew of buyers in the next generation to keep the program running strong instead of running on fumes currently and ultimately out of gas.

However, it would be interesting to see a detailed breakdown in a report on how many of the loans, subsequent to the establishment of catch shares and that were used to purchase catch shares, are currently above water and how many are below water.

How many of the people pushing this program are grey beards looking for someone to buy their catch shares, which were gifted to them based on historical catch?

Is this program setting up young Alaskans for success, or failure with a ruined credit history for years to come when they can't pay off the cost of the loan for the catch shares and also a boat and all the other costs associated with the fishery?

The cost of the catch shares themselves are in a sense a long-term unproven ponzi scheme, and is only sustainable if you get enough of the younger generation to take on the very high burden of debt that the first generation of now grey beards did not have to contend with.

Long-term, the cost of the catch shares have to be priced into the overall cost of doing business, which means ex-vessel values have to increase to the point where it is economical to pay off the catch share loans along with all the start-up capital costs.

At this point, it is not demonstrated that the cost of catch shares have been adequately priced into the overall system.

There is an old time saying - a sucker is born every minute. Is this next generation being drawn into a sucker bet?

Anonymous said...


More financing programs just means the cost of entry goes up! Keeping the Maximum loan smaller is what kept permit prices from rising the way quota prices did. same thing happened with housing, more cheap money means costs go higher for all new entrants. No thanks.

Anonymous said...

maybe re-write the bill to include clawback provisions on those exiting?

Anonymous said...

seiners buyback list at under news/wx

Anonymous said...

Great points Anons #1,#2, and #3. Probably none of the Grey Beards would probably been boat owners if they had the barriers to entry imposed by quota share system. The catch shares of the grey beards should just automatically go back into a common pool when the quota holders turn 60 years old. This way the Future Alaskan fishermen do not have to be born into a system of feudalism where their only fishing option is to be a serf for the descendants of the gifted quota grey beards. Arni Thompson should resign from UFA and run the group United Quota Lessors of Seattle and Palm Springs.

Anonymous said...

u r forgetting the blood, sweat and tears that went into the earning of said quota and permits.

don't think a new guy can make it.

case #1. Troy Denkinger. No original quota, no earned permits. New guy. Bought in totally. Worth $50 million.

case #2 John Barry. Same Same. Net Worth. $10 million.

case #3 Dan Crome. Same Same. Net Worth. $10 million.

case #4 Jared Bright. Same Same. Net Worth. $2 million probably if not, it'll be there soon. he grossed $1.3 mill just on salmon last year.

many more to come. it's a young man's game.
these guys had no quota. new guys. no entitlements. no inheritance.

the new guys can do just fine under the current system. they just have to be kick ass m. fo's.

not lazy ass, why wasn't i here 2 decades ago.

i got no quota, i paid for my permits. i earned my money. and i'm making a living here. better than a doctor.

wha wha wha. quit crying.

new guys can kick ass. these opp's are probably a good thing

as for Arni T. BEst pres of ufa since thorstenson

Anonymous said...

se buyback list.

look under news/wx.

Anonymous said...

Arni T, BEst pres since Arni F, how many Arni's does it take to buy off the NPFMC, the CFEC, and a BEst prez of a Senate, named Ben Stevens too?


And you too can be a famous member of the Corrupt Bastards Club too.

High Flyers, from the BBEDC and CBC too!

Anonymous said...

Who is the guy at 11:03 their accountant? Those seiners sure like to keep score.

Anonymous said...

If it is such an up and coming valuable fishery (SE seine), how could you justify, or want to tax ourselves 3%, AND not decrease permitted effort.

This thing still stinks!

Anonymous said...

up and coming. that's why it will cause effort to decrease-- not from today's effort, but from what it will be if left unchecked. the processors already have a stranglehold. SBS paid 5-7 cents on 2010 se salmon. no one has even uttered a peep. yeah, when fishermen are getting too much and processors are going broke, then you know we've swung it too far in the fishers favor.

Anonymous said...

You'd have to be a moron to bet there aren't more boats re-entering the fishery if this plan doesn't pass. Think long term here. The under-utilization of those permits was caused by one thing only: low pink prices. Clearly that's over.

If you don't think the Buyback is going to reduce the competition, go call a permit broker and offer your permit for sale, they have buyers lined up to buy in...... That will make you a believer.

Remember, it's not about last year, it's about the next 10.

Anonymous said...

What's moronic is having a buyback because guys want to make MORE money, limiting the fishery more than CFEC did, and eventually having the CFEC issue new permits under public pressure (read constituents) to share the wealth. That's a moron move.

The problem is not with opportunity, the problem is the lack of equitable raw fish prices being paid relative to the final market values of the various market product forms.

I cannot believe how foolish this buyback is unless you are one of the few selling for the big bucks.

It will NOT eliminate ANY effort at current available permit numbers.



Anonymous said...

It wouldn't matter if the state GAVE out a bunch of new permits to residents, running a fishing operation is hard (and technical nowadays) and everyone is not cut out to make it. A boat does not fix or maintain itself. The native corps could buy all members permits and quotas but they don't because everyone is not skipper material. I mention this not as a racial point but for the fact that they privately have 10's (if not 100's) of millions of dollars in accessible funds. If you really want economic development, start investing in our futures.

Anonymous said...

11:03 "Blood, sweat, and tears that went into...earning of said quota..."

You don't have to earn quota. Just be a vessel owner during the qualifying years and NOAA will give you the quota for free so long as you don't complain too much about processor quota shares. Then you can just lease it out, or sell it, or give it to your heirs.

Anonymous said...

How about a bigger brain.

Anonymous said...

How about Barney Frank's(Mass.) Freddy Mac and Fannie May Home Loan Package Increase?

"FORECLOSED?" "Short Sale" and "Price Reduced Again?"

It's the best thing ever seen for the seller, however that buyer's remorse costing the nation billions, seems to be working out well for our Democrats from Dillingham, our Democrats from Illinois, and our Democrats from, well, you know best, Petersburg too.

I always thought the best model ever shown was the 0 down, 0 delivers, and the 125% loan to value ratio model?

The person who lost nothing, crying about themselves, when 8th grade reading class was also as confusing as 6th grade math.

How did these people buy permits for $1,000.00 or $300,000.00, with that current 100,000.00 limit?

It could be better, if bobbyt and friends could just get Bruce, and Barney to join into one of those new types of marrages that have become so popular as of late,
Hurry it up there Bruce, sounds like Barney's getting hitched up again, he always liked Freddy more than Fanney, and all you democrats need a bigger loan, just go ask bobbyt, loan expert to pay 250% of the true value of a SE Seine Permit too, don't ya just love them dem's just print more money $$$$$$$$$$$$$

Vote Obama too!