« This way to the egress | Main | The foursquare gospel »

Gatekeepers facing eviction?

By Owen Paine on Thursday December 11, 2008 12:28 AM

A fellow-member of one of my lefty mailing lists passed along a begging letter he received from Alfred H Bloom, the president of his atra mater, the formerly very self-satisfied Swarthmore College:

Swarthmore has benefited from a continuing tradition of generous philanthropy and has over the years enjoyed exceptional investment success. The College has held prudently to a conservative spending rate on its endowment during years of excellent return so that it would be well positioned in years of disappointing performance....

Nevertheless, the almost 30% decline in the endowment from its June 30 value of $1.4 billion has been much steeper than anyone anticipated....

Effective immediately, the College will pull back from all non-essential construction work, refrain from initiating any new programs, and stringently evaluate any faculty or staff hiring....

Over the coming semester we will develop a contingency plan for more significant reductions in the budget, which the College will begin to implement if by this time next year the College's financial situation has not improved.

It's an ill wind that blows nobody good. Wouldn't it be wonderful if the "current decline in financial assets," as Bloom old-maidishly calls it, ruined every elite private college and university in the nation? Low Library converted to low-rent housing!

Oh I'm licking my chops here. The spirit of '68 walks again, wearing the stolen clothing of Efficient Markets.

Comments (7)


i'll tell ya
something very quizzical here

a portfolio conservatively invested
ought not to suffer much income drop
despite the paper value flux in the underlying securities
payments by aaa bonds are stable
so despite folk intuition
are the likely stock dividends
of blue chip outfits

so what's up here ???

maybe private giving will suffer
as wealthy alums pull back their giving

or maybe the fuckers goit caught rolling
the loaded dice
you know the alphabet soup of synthetic frauds
cooked up
by the good followers
of the ever fertile
wealth magician
senior jay gould ponzi-nosferatu

i read and i reread this bulletin and ...
is this about expansion plans only
or does the loose lingo outcrop-ings
reach into existing budget numbers ???

i hear a "poor mouth " con rolling out here

and lets hope its a two fer

hitting the student sat princess
with huge tuition
and housing hikes
at the same time
pressing the tenured cone caps
back into full time service
while clipping their frills
fees fringes royalties
and egregious sabbaticals

the old minor birds
with a heavy dose
of elementary level teaching hours
and as to the two year contract
adjunct players may they all get
"processed out of the system"

i agree father S
the free market verdicts are in

invisible hand i summon you
to squeeze these merit creeps
till their eyes pop out

Al Schumann:

Harvard lost 22% off the value of its endowment. Other gold star university endowments are doing equally poorly. Given the illiquid nature of most of their investments, I suspect the cuts in spending reflect an effort to bring it in line with the actual, bedrock income from the solid performers in their portfolios -- on a dollar-in/dollar-out basis, with no short or long term term leverage against assets, regardless of their Blue Chip quality, thanks to the punitive rates and terms offered by panicked bankers.


al you're being ever so kind

harvard was not investing conservatively

fiduciary cavaliers they've been
these past 26 years
and this speed bump
turned cliff edge tumble off
for high risk plays
has em freaked

glory be

after years of super "returns"
and amazin disgrace
the loaded dice finally done in
the button down rubes
from the yahhhd


i agree with the reverend father
to hell with the liberversity mind monks
i say force em to raise the tuitions
and lower the scholarships

re erect the class walls of 1890

against those hallowed walls
illusions may shatter
and after all that is our mission

we have a pour soi prole class to rebuild


for the record its obvious
i owen dendrite paine
could not possibly have a friend from swathmore or be part of an elite list
of lefty savants
or for that matter write such a suave squid as the post ends with

t'is obviously the work
of our fearless mage manque
and bare foot genius

doctor snuffingtom l smiff
of beetle briar kentucky

the l is not as his enemies claim
for lachrymose but for

Al Schumann:

To be clear, I agree with you (at least in part) about the risky nature and cavalier approach. Illiquid doesn't necessarily mean conservative, just hard to convert. When the good times were rolling, I imagine hedge fund and private equity gambles seemed like the smartest possible thing to the managers. The paper increase meant big bonuses for them. The risk was offset by confidence that they'd have advance notice that it was time to exit the asset bubble game of musical chairs. Someone else was supposed to be left standing, with a fatuous grin turning to dismay. That's how it had worked for years: last man standing gets ratfucked.


al i agree completely

illiquidity is not the problem in itself
so long as you retain credit lines
and or adequate cash

just writing down values and meeting cash calls oughta be okay
unless your over leveraged already
or the write downs are too uncertain and open to wild risk guess shifts

my point beyond bashing the gowned geese

is whats inside the black box
components of their portfolios ????

investments in forests are not the problem
i suspect

something aweful and prolly synthetic
must be loudly ticking
if not
already exploding inside the fuckers

bottom line if they had stuck to
blue chip stocks and aaa bonds
where they belong
yields and cash flow
would now be stable
even as principal values swooned

of course as you suggest chief investment officers would have way smaller compensation histories these last 25 years

Post a comment

Note also that comments with three or more links may be held for "moderation" -- a strange term to apply to the ghost in this blog's machine. Seems to be a hard-coded limitation of the blog software, unfortunately.


This page contains a single entry from the blog posted on Thursday December 11, 2008 12:28 AM.

The previous post in this blog was This way to the egress.

The next post in this blog is The foursquare gospel.

Many more can be found on the main index page or by looking through the archives.

Creative Commons License

This weblog is licensed under a Creative Commons License.
Powered by
Movable Type 3.31