Yale and Harvard Announce Major Endowment Losses

Thanks for the link. This is happening everywhere. Even the NAIA college in our town are losing their main contributors. Don't know much about economics but the word here is they have decided to hang on to their money so they can pay their anticipated tax bills.

Correct me if I am wrong, but weren't some of the ivie's singled out as victims of the Bernard Madoff ponzi scheme?

Now I know what to do with that extra change I have laying around. I am sure that these universities could use it. Forget the Salvation Army, get those professors out there ringing the bell.

I don't know . AIG doesn't have an issue with bonuses. No freeze there. I wonder if some of the Profs will move to AIG that that they know they have a sugar daddy.

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ivie's singled out as victims of the Bernard Madoff ponzi scheme?

.....I think this indirectly/partially answers that question:

http://money.cnn.com/2008/12/16/news/madoff.hedges.fortune/index.htm

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Correct me if I am wrong,

Here's some of the text from HaverDad's link:

certain types of investors seem to be absent -- so far, anyway -- from the casualty list.

That's no accident, argues James Hedges IV of LJH Global Investments, a boutique firm that invests in hedge funds and private equity for high-net-worth families. In other words, score one for the big institutions that stick to standard rules rather than allowing their managers to invest on personal connections or hunches.

"There's no Duke Endowment [among the list of Madoff investors]," Hedges says. "There's no Harvard management, there's no Yale, there's no Penn, there's no Weyerhauser, no State of Texas or Virginia Retirement system."

AIG's insurance biz (where trips and bonus'occured) is completely seperate from the smaller companies in trouble under it's umbrella who mismanaged their investment strategies. All a result of the bear market, which has a history of repeating itself every 7 years.

Here, Madoff did a number on many wealthy investors in Palm Beach, many of the rich and famous are broke.

It is not our custom to announce the mid-year status of our endowment portfolio, but these unusual circumstances call for a departure from custom. Thanks to the outstanding work of David Swensen and his colleagues in the Investments Office, our endowment has declined significantly less than market indices. Taking into account only the value of marketable securities, our investment return from July 1 through October 31 was a negative 13.4%. But this does not tell the whole story. Our endowment is invested in both marketable securities (chiefly stocks and bonds) and “illiquid” assets, such as real estate and private equity investments that are not traded on a daily basis and are difficult to value with precision.

Harry Markopolos, an accoutant for a rival Boston investment firm, had been warning the SEC about Madoff for years:

http://www.independent.co.uk/news/business/news/wall-st...r-years-1203850.html

Which makes claims by Madoff investors in the second article linked by Haverdad (quote below)seem like a lot of bullcrap:

"Certainly many of the institutions that turned to Madoff will challenge Hedges' views, as many will face litigation from their own clients. So far, two of the large fund-of-funds with the largest sums under Madoff's control, Tremont and Fairfield Greenwich, have already asserted that they conducted extensive due diligence before investing. Many others will take the same position"

So now, because the SEC did not do its own due diligence sufficiently, we taxpayers are on the hook for billions of dollars through the fund that reimburses investers for portions of their losses from certain fraudulent activities.

FO,
I misread that statement the first time, thanks for the correction. Reading is a skill...some of us (insert CPLZ here) need more practice.

Fungo Real Estate doesn't fall under liquid assets especially today. I just watch a documentary on Foreclosures in a few US cities and the sherif stated he was doing 50,000 this year.
Also losses are only losses when they are realized and I would be careful taking estimates verbatum.
These fraud situations are becoming quite common. There are no heros in this field and if you throw common sense to the wind you will get bit down the road. My very smart brother bought some tech shares from a genious. His description. A Pshycologist who lived accross the street was living with this guy. She talked him into buying shares in this venture. It was supposed to go public a month ago. Lo and behold the guy dumped the lady accross the street. He had been living there on her dime. Now when I warned him back when he 1st got involved he just fluffed it off. I believe the scam is almost on the table. He got burned once before and he never listened then.

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Madoff did a number on many wealthy investors in Palm Beach, many of the rich and famous are broke.

yikes, the guy runs a business based on the "business model" of his own Government's Social Security retirement system - and folks label him a criminal
go figure

.

How 'bout the fact that Congress this week approved a $4700 pay raise for themselves? I would normally say... "what are they thinking?"

Instead, I'll say... "what are WE thinking?"

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And on the Madoff deal.... my former business partner lives in Palllm Beach, and told me that this week he actually saw several neighbors washing their own RR's... ba dum ba dump....

cadDAD

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re: Congress this week approved a $4700 pay raise for themselves.

I almost posted that as a thread-starter the other day, but seasonal good humor kept me from it.

Still, the raise was breath-taking. It seems the obvious front runner for 2008's "worst timed display of total insensitivity by elected officials" award.

quote:

yikes, the guy runs a business based on the "business model" of his own Government's Social Security retirement system - and folks label him a criminal
go figure

If it weren't so true that would be more then funny

In CA, Board members can be held liable for losses if they didn't excercise due diligence. I wonder if Speilberg is on his foundations board? WOuldm't that be ironic, put 50 million into a foundation, invest it in a ponzi scheme and then be sued by the California Attorney General to make good on the 50 million

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Fungo Real Estate doesn't fall under liquid assets especially today. I just watch a documentary on Foreclosures in a few US cities and the sherif stated he was doing 50,000 this year.

BHD, I was just posting a portion of the letter written by Yale President Richard Levin. It explains where the losses came from. I know real estate isn't a liquid asset ---- it's an illiquid asset (which is how it was described in President Levin's letter and my subsequent post) Don't know but possibly you read "illiquid" as "liquid") illiquid in investment terms means "not easily converted to cash". I said I didn't know much about economics --- that doesn't mean I don't know some of the basics.
Fungo

quote:

by fungo: I said I didn't know much about economics --- that doesn't mean I don't know some of the basics.

me thinks ya know more than you're letting on


I'll pass along this feel-good tidbit re illiquid assets


as many are aware many banks outside the US have been hit hard by the "troubled assets/securities/mortgages" crisis that basicly originated here, then spread ...

Credit Suisse, a pretty large Euro Bank is taking an interesting approach -

they do value their high level management - sooo, generous bonuses will be awarded as usual - - however ...

a) their bonus account will be funded by those "packaged troubled assets" at the face value for which they were acquired.

b) if they are worthless, managers need only look in the mirror to find the guy who is responsible

c) they'll surely pick better investments in the future


We should insist that our US House & Senate take some of those "troubled assets" as their salary too

Bee>
Are you sure you wanna use the swiss model?

Those Credit Suisse bonuses include a nice gift for management spouses.

Here is the Madoff list of losers:
(Tufts seems to be the only unversity listed.)

http://s.wsj.net/public/resources/documents/st_madoff_victims_20081215.html