FOR LIBERTARIAN NATIONALISM: ANTI-CORPORATIST, ANTI-COMMUNIST, ANTI-GLOBALIST...PRO-SOVEREIGNTY, PRO-POPULIST, PRO-FREE ENTERPRISE
Monday, November 30, 2009
How Larry Summers, Obama's National Economic Council director, ran Harvard's economic condition into the ground
Harvard ignored warnings about investments
Advisers told Summers, others not to put so much cash in market; losses hit $1.8b
(Boston.com) -- By Beth Healy
It happened at least once a year, every year. In a roomful of a dozen Harvard University financial officials, Jack Meyer, the hugely successful head of Harvard’s endowment, and Lawrence Summers, then the school’s president, would face off in a heated debate. The topic: cash and how the university was managing - or mismanaging - its basic operating funds.
Through the first half of this decade, Meyer repeatedly warned Summers and other Harvard officials that the school was being too aggressive with billions of dollars in cash, according to people present for the discussions, investing almost all of it with the endowment’s risky mix of stocks, bonds, hedge funds, and private equity. Meyer’s successor, Mohamed El-Erian, would later sound the same warnings to Summers, and to Harvard financial staff and board members.
“Mohamed was having a heart attack,’’ said one former financial executive, who spoke on the condition of anonymity for fear of angering Harvard and Summers. He considered the cash investment a “doubling up’’ of the university’s investment risk.
But the warnings fell on deaf ears, under Summers’s regime and beyond. And when the market crashed in the fall of 2008, Harvard would pay dearly, as $1.8 billion in cash simply vanished. Indeed, it is still paying, in the form of tighter budgets, deferred expansion plans, and big interest payments on bonds issued to cover the losses...Cont'd...LINK