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
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