Posted on 10/17/2009 4:02:09 AM PDT by Daffynition
Harvard University last year lost nearly $2 billion in the cash account it uses to pay for daily operations, by investing the money with its endowment fund instead of keeping it in safer, bank-like accounts.
The loss, disclosed today in the university's annual financial report, resulted from Harvard financial executives taking the unusual step of placing a large mount of the university's cash with Harvard Management Co., the entity that runs the school's endowment and invests in stocks, hedge funds and other risky assets.
Typically, companies and institutions manage their cash accounts conservatively in order to have funds readily available, by keeping that money in bank-like accounts and other low-risk investments such as money-market mutual funds.
Harvard, however, said it lets its endowment managers invest the cash in order to get higher returns, a move that paid off in previous years when the stock market was rising, said the university's chief financial officer, Daniel S. Shore. But that turned out to be a disaster when the financial markets collapsed last year, causing huge investment losses. The $26 billion endowment reported a 27 percent loss for its last fiscal year.
Shore would not say exactly how much cash the university had with Harvard Management last year, but it was more than in prior years, he said.
"We were invested fairly heavily with them and that's what led to the losses,'' Shore said in a Globe interview. "The problem as much as anything was we weren't as diversified as we could've been."
The disclosure sheds new light on the cash crunch the university experienced in the fiscal year that ended June 30, and the sudden and urgent warnings that Harvard president Drew Faust sounded last December about the plummeting value of the endowment. [snip]
(Excerpt) Read more at boston.com ...
And the ***-d*mned idiot nearly destroyed America and the Republican Party with his socialist policies. His insistence that banks give mortgages to illegal aliens (based on a legal interpretation from Clinton, to be fair) is what caused a huge portion of the mess we’re in.
Yep, the very same. As the captain of the Titanic said,
“Trust me, I’ve had a lot of training”.
We've established they know nothing about law and now finance. What other Cracker Jack box degrees are they scamming tuition for?
Harvard should close and sell the campus as an ornate whore house. That's all it is now anyway.
Meh. Anyone ever associated with Boston college life would know the "tie-on-the-door knob" signal ... but now days, I understand they just use a condom. 8-D
When the dorm room's a-rockin, don't come a-knockin?
or
When the temporarily-assigned college-affiliated student housing sleeping quarters are presenting quasi-harmonic(*) motion, please refrain from striking the usually wooden, but sometimes likely to be metal or metal-and-wood, hinged entryway in a rhythmic, but such rhythm not necessarily in resonance with the harmonic motion of the room, fashion, in order to gain the attention of the occupants? /Harvard>
Cheers!
(*) or hormonic, actually.
HAHAHAHA!
Nah, I don’t think it makes us bad people at all. Besides, laughter is really good for your health, and I’ve been laughing about this all morning.
Heck. I’m so pumped up by Harvard’s good luck, I’m going out to buy a PowerBall ticket.
I agree, as noted above. ;-D
They should have hired a team of Harvard MBA’s and finance professors to manage their money. Oh, wait...
All the *good* ones have been recruited as czars in the Zero administration. Harvard was left with the dregs. ;)
I’m crying a river for Harvard—NOT!!
A liberal and his money are soon parted.
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