Comments on: What Larry Summers did to Harvard’s finances http://blogs.reuters.com/felix-salmon/2009/07/02/what-larry-summers-did-to-harvards-finances/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: Abdulaziz S Al-salem http://blogs.reuters.com/felix-salmon/2009/07/02/what-larry-summers-did-to-harvards-finances/comment-page-1/#comment-3686 Sat, 04 Jul 2009 06:23:46 +0000 http://blogs.reuters.com/felix-salmon/2009/07/02/what-larry-summers-did-to-harvards-finances/#comment-3686 All it proves that despite the fancy technical jargon they use, the fancy lifestyle and pay packets they cant spend, it proves that they are bigger morons than we are lead to believe. I am an investment banker for thirty years who lived a very normal life. I left the business believe or not because I saw the tsunami in November 2006 and put all my money in bank deposits.
If you think you got morons working for Harvard come and see our gang in the GCC.

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By: Ken Houghton http://blogs.reuters.com/felix-salmon/2009/07/02/what-larry-summers-did-to-harvards-finances/comment-page-1/#comment-3668 Fri, 03 Jul 2009 16:08:05 +0000 http://blogs.reuters.com/felix-salmon/2009/07/02/what-larry-summers-did-to-harvards-finances/#comment-3668 By my calc, MichaelB inverted something, and the service cost is somewhere just above 8.6%.

Which is still =not= representative of a AAA rating.

I assume–without evidence, of course–that they are using the term “debt servicing” as a proxy for both their interest and principal payments.

Otherwise, as MichaelB noted, the market clearly doesn’t believe Harvard has a AAA credit rating. The average coupon for Bloomberg’s current HIGH-YIELD corporate bond rates is 7.44%. The optimistic version of an effective yield of 8.6% in an environment where inv-grade rates average around 5.8% and h-y ones average 11.75 should be somewhere around BBB- or BB+, iirc.

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By: happyfeet http://blogs.reuters.com/felix-salmon/2009/07/02/what-larry-summers-did-to-harvards-finances/comment-page-1/#comment-3629 Thu, 02 Jul 2009 20:48:49 +0000 http://blogs.reuters.com/felix-salmon/2009/07/02/what-larry-summers-did-to-harvards-finances/#comment-3629 Harvard is placing a big ivy league bet on hyperinflation I think.

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By: rgoalierob http://blogs.reuters.com/felix-salmon/2009/07/02/what-larry-summers-did-to-harvards-finances/comment-page-1/#comment-3624 Thu, 02 Jul 2009 19:53:02 +0000 http://blogs.reuters.com/felix-salmon/2009/07/02/what-larry-summers-did-to-harvards-finances/#comment-3624 I hope all of these Preppy places go “out of business”. Summers, and everyone of his ilk are cancers.

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By: Gregor http://blogs.reuters.com/felix-salmon/2009/07/02/what-larry-summers-did-to-harvards-finances/comment-page-1/#comment-3618 Thu, 02 Jul 2009 19:11:28 +0000 http://blogs.reuters.com/felix-salmon/2009/07/02/what-larry-summers-did-to-harvards-finances/#comment-3618 I’ll never forget the Jack Meyer witch-hunt and fiasco. The fee structure at HMC was really not well understood or paid much attention to by the Harvard community, in the years leading up to the time Meyer started produces enormous capital gains for the university, and himself. Once he and his team got very successful, that’s when the trouble began.

At most universities, the old 2/20 structure was of course enjoyed by all the hedge fund managers of outsourced capital. It was, imo, appropriate to pay Meyer similarly. Though, that’s not how the community saw it. As I recall, Summers tried to defend Meyers and the fee structure. But an enormous wave of alumni and faculty were outraged by the salaries of Meyer and his team. Meyer was bounced by the community.

G

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By: dianeb http://blogs.reuters.com/felix-salmon/2009/07/02/what-larry-summers-did-to-harvards-finances/comment-page-1/#comment-3609 Thu, 02 Jul 2009 18:49:50 +0000 http://blogs.reuters.com/felix-salmon/2009/07/02/what-larry-summers-did-to-harvards-finances/#comment-3609 What Harvard (and many other institutions) forgot as HMC piled up the endowment money is that it is a non profit, and the privileges that come to it are becaue of that status and not because of some innate divinity that elevated it above the rest. I don’t think Summers/Faust et. al realized that the animosity they faced and continue to face(from Grassley on down) came from their own hubris regarding the endowment and the way it was portrayed both by Harvard and by others. Meyer never seemed to realize, or else wasn’t told, that working for a non profit means not having the large salaries that are a tradition in the private sector. And that was a flashpoint as well, and rightly so. All around, Harvard seems to be the non profit equivalent of AIG, with the same arrogance and stupidity that are breathtaking.

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By: MichaelB http://blogs.reuters.com/felix-salmon/2009/07/02/what-larry-summers-did-to-harvards-finances/comment-page-1/#comment-3598 Thu, 02 Jul 2009 18:10:53 +0000 http://blogs.reuters.com/felix-salmon/2009/07/02/what-larry-summers-did-to-harvards-finances/#comment-3598 $517 million to service just over $6 billion in debt? Unless I’m missing something they’re paying interest in the ballpark of 12%! No kidding AAA doesn’t buy you much anymore.

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By: Felix Salmon http://blogs.reuters.com/felix-salmon/2009/07/02/what-larry-summers-did-to-harvards-finances/comment-page-1/#comment-3596 Thu, 02 Jul 2009 17:58:05 +0000 http://blogs.reuters.com/felix-salmon/2009/07/02/what-larry-summers-did-to-harvards-finances/#comment-3596 Yeah, GD, I’m really bad at finding that. So bad I actually blogged it in May.
http://blogs.reuters.com/felix-salmon/20 09/05/31/harvard-datapoint-of-the-day/

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By: G.D. http://blogs.reuters.com/felix-salmon/2009/07/02/what-larry-summers-did-to-harvards-finances/comment-page-1/#comment-3585 Thu, 02 Jul 2009 17:28:20 +0000 http://blogs.reuters.com/felix-salmon/2009/07/02/what-larry-summers-did-to-harvards-finances/#comment-3585 This is not exactly news. See article in Boston Magazine from about a month ago.

http://www.bostonmagazine.com/articles/d rew_gilpin_faust_and_the_incredible_shri nking_harvard/

So maybe Summers isn’t so good at swaps, but bloggers are not so great at getting fresh news, either

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By: Dieselm http://blogs.reuters.com/felix-salmon/2009/07/02/what-larry-summers-did-to-harvards-finances/comment-page-1/#comment-3583 Thu, 02 Jul 2009 17:24:03 +0000 http://blogs.reuters.com/felix-salmon/2009/07/02/what-larry-summers-did-to-harvards-finances/#comment-3583 Assuming their rate of return is greater than their debt service costs, this could be net positive thousands per student.

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