> Obama Regime Report < Obama Regime Report: Harvard's Bets On Interest Rate Swaps DUMB Idea !!!

Today's world headlines

Sunday, October 18, 2009

Harvard's Bets On Interest Rate Swaps DUMB Idea !!!

And these people are supposed to be turning out the best of the best, and you can believe me when I say I believe they do most of the time, having a younger brother who's a Cornell undergrad and HBS  grad and seeing what he's accomplished in his life not to mention the endless line of America's brightest and best in business, politics, Nobel Laureates (yes that guy too,.. and many more ) and high finance who are also Harvard Alumni.

They're doing most things right.

However, people running the show over there could use a little more conservative financial advice when it comes to gambling with the worlds largest college endowment coffers..(check this graph here:)

.....thus costing the school at least 500 MILLION DOLLARS on 1.1 Billion dollars of what are called "Interest Rate Swaps" in order to hedge their  variable-rate debt for capital projects, ....which in layman's terms in this case means gambling usually a motherload of money on interest rates rising and falling,  in which one party exchanges a stream of interest payments for the other party's stream of cash flows.

It's used by larger investors  to hedge, speculate, and manage risk. ...got it?  ;>) lol

It's obviously all part of all these crazy Wall Street derivatives involving high finance risk that helped the rich get richer and the democrats bring down the world economy,  the latter by their forcing the U.S. banks to give home loans to illegals, the homeless and unemployed practically for all we really know, with both occurring at the same time.

This and who knows what else basically caused the perfect storm of world financial misery we're now experiencing that the dems in this 111th congress should all be eventually prosecuted and hung if guilty along with a FEW rogue Wall Street unsavory peeps like Bernie Madoff and a couple others.

The FEW bad apples.

However, sadly for we the people, thanks to the liberal voters giving these crooked democrats unfettered power,  there's no one minding the #@#%$%^$^$ store in DC BUT THEM to begin hearings and prosecutions which they obviously will NEVER do!!!! ..

But that's another story for another time.
Oct. 17 (Bloomberg) -- Harvard University’s failed bet that interest rates would rise cost the world’s richest school at least $500 million in payments to escape derivatives that backfired.

Harvard paid $497.6 million to investment banks during the fiscal year ended June 30 to get out of $1.1 billion of interest-rate swaps intended to hedge variable-rate debt for capital projects, the school’s annual report said. The university in Cambridge, Massachusetts, said it also agreed to pay $425 million over 30 to 40 years to offset an additional $764 million in swaps.

The transactions began losing value last year as central banks slashed benchmark lending rates, forcing the university to post collateral with lenders, said Daniel Shore, Harvard’s chief financial officer. Some agreements require that the parties post collateral if there are significant changes in interest rates.

“When we went into the fall, we had some serious liquidity management issues we were dealing with and the collateral postings on the swaps was one,” Shore said in an interview yesterday. “In evaluating our liquidity position, we wanted to get some stability and some safety.”read more


The urge to save humanity is always a false front for the urge to rule it. H. L. Mencken

No comments:

Post a Comment

Some rules: No leftwing attacks nor Obama supporters so don't waste you're time & especially mine. All 99% others welcome to have your say.

Web chicagoray.com

One last thing...Fair Use, Photoshop Usage, Legal

Statement on Fair Use

This site may contain copyrighted material the use of which has not always been specifically authorized by the copyright owner or may be authorized or licensed for publication at this site only. Permission to copy, republish or reproduce such material must be obtained from the original copyright owner PHOTOSHOP STUFF.....When the photoshops appear on this site they either have my name on them becuase I made them or tweaked an original in which case I link to the original by clicking the pic. Please take all you want, that's why they're here, just leave the name as is like I do, and I would be eternally grateful. Ask and I'll tweak it for your site if you need it... More here

Back To The Page Top