Harvard ignored warnings about investments - The Boston Globe

   "Summers had a huge influence over Harvard money matters during
    his tenure, according to several people who worked with him.
    Known for his love of intellectual debate, he would hear out the
    opinions of others but ultimately was forceful in his own views.
    He was more financially sophisticated than most other Harvard
    presidents, and more deeply involved in decisions, from how to
    maximize returns on Harvard's cash to using financial instruments
    called swaps, to hedge against the risk of rising interest rates
    - a hedge that would ultimately backfire"

   ""In the years after Summers left, market conditions and Harvard's
    liquidity changed dramatically. The university's financial
    strategies could have and should have changed with them"

   "Members of the financial staff, a broader financial advisory
    committee, and the university's elite six-member board all
    weighed in. But Summers was a powerful advocate, and with the
    returns so good for so long, there was little support for
    exercising caution"

   "The power is just in the hands of too few people with too little
    accountability"

   "The very thing that the former endowment chiefs had worried about
    and warned of for so long then came to pass. Amid plunging
    global markets, Harvard would lose not only 27 percent of its $37
    billion endowment in 2008, but $1.8 billion of the general
    operating cash - or 27 percent of some $6 billion invested.
    Harvard also would pay $500 million to get out of the interest-
    rate swaps Summers had entered into, which imploded when rates
    fell instead of rising. The university would have to issue $1.5
    billion in bonds to shore up its cash position, on top of another
    $1 billion debt sale. And there were layoffs, pay freezes, and
    deep, university-wide budget cuts"

   "Even with the losses, Rothenberg said, the cash strategy has
    earned Harvard returns averaging 8.9 percent over the past 10
    years. He and other university officials say the cash pool is
    still ahead of where it would have been, if invested more
    conservatively all along. But no one could be specific about what
    that net gain has been"
 
 - Harvard ignored warnings about investments - The Boston Globe
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