Hubris: Harvard Investment Strategy Disaster-down 11 Billion? Larry Summers implicated

[terisan]

Forbes Analysis of the Harvard U financial mess--may have lost 1/3 of its 30 billion endowment --PLEASE- NO BAILOUT FOR HARVARD!!!!


For a long while Harvard's daring investment style was the envy of the endowment world. It made light bets in plain old stocks and bonds and went hell-for-leather into exotic and illiquid holdings: commodities, timberland, hedge funds, emerging market equities and private equity partnerships. The risky strategy paid off with market-beating results as long as the market was going up. But risk brings pain in a market crash. Although the full extent of the damage won't be known until Harvard releases the endowment numbers for June 30, 2009, the university is already working on the assumption that the portfolio will be down 30%, or $11 billion.

The strain of market turmoil is visible in staff turnover at the management company, which axed 25% of its staff recently and is on its fifth chief in four years. Mendillo, 50, came to Harvard last July after running Wellesley's small endowment. She declines to comment. But how much blame she should get is unclear; the big bets on derivatives and exotic holdings were in place before she got there. The bad bet on interest rates--a swap in which Harvard was paying a high fixed interest rate and collecting a low short-term rate--goes back to a mandate from former Harvard president Lawrence Summers.


see more at

<http://www.forbes.com/forbes/2009/0316/080_harvard_finance_meltdown.html>

[FrenchieCat]

1. Everyone lost money!

TO make it seem that Harvard would be immune, and if it wasn't, Summers should be blamed is fucking ridiculous. But, oh....it's Forbes! Whatever! :eyes:

[terisan]

2. Summers has a long history of financial mismanagement. nt

[FrenchieCat]

3. Sure he does.......

Or is it that you are so smart,
but he's got Barack Obama fooled....
Or is the New President just in on it or a total dupe?

Why don't we just Blame all of Harvard's administration, the current as well as the one prior! Why be selective, since we are into no degrees of seperation. :shrug:

[terisan]

6. I don't understand your post. Is it an ad hominem argument?

[barb162]

8. From the article, do you have a view he didn't screw up?

BTW I think he does have Obama fooled.

[kohodog]

4. Larry Summers, my Hero

I've been very impressed with Obama with two exceptions: Iraq and his financial team. The budget looks great, if he can get it passed, but the financial "rescue" seems out of whack. (Not that I'm an economist). Can people who created the box think outside of it?

[terisan]

5. American Prospect article -bearish on Larry Summers

<http://www.prospect.org/cs/articles?article=the_summers_bubble>

[kohodog]

9. Great article, Thanks. Also check out this:

http://www.truthout.org/021609J

Foxes in the hen house! Look Out Everyone!

[barb162]

7. Hey, 20 billion aint peanuts. I hope they can manage on that. n/t

[leftofthedial]

10. Summers, Geithner, et al play for the other team.

Obama should replace them before the flush another trillion down the Wall Street rathole.