Arthur E. Sowers arthures at
Sat Apr 6 22:42:01 EST 1996

On 6 Apr 1996, Marc Andelman wrote:

> >Hi Bert and Art.  I think the term Art was looking for was
> "Derivatives".  The universities do not want to spend the principal
> on their endowments.  They want uncle sam to pay as much of the
> tab as possible.  This makes good sense to bean-counters.  The
> correct word, as Art said, is leverage.  I just hope they hang
> on to that wad of cash until the day my confederate dollar is
> worth something ( it never was worth anything, as it says, not
> redeemable until victory over the North, or something like that).
> Marc


That was the word, "derivatives," I just couldn't think of it at the
time. I'd say that that word was used as a label for what wiser folk would
call "smoke and mirrors", but a lot of "administrator/manager types" were
"taken in" by the flowery platitudes of quick and large profits, as the
fairy tail was cooked up by fast, smooth talking broker-types. Another
good trick was the hedge funds (where you had to dump in at least half
million, to get in the running for 50-200% return on principal) but they
were cruising along for a while and then, like the titanic, some big funds
took a hit in the wallet and, a lot of rats abandoned ship just before it
sank. Now, Marc, I'm thinking of some big mother brokerage firm (again,
being really bad at names, I can't think of it) that went under about,
what, 1-2 years ago and the investors all took a bath except the upper
level management (with obscene golden parachutes). Its on the tip of my

Leverage.... ah yes. How to get faculty and instruments and publications
and patents for almost free? And not pay taxes? Start a university or
private research institute! Its interesting that at my place, the fraction
of the operating budget that comes from state sources is very close to the
sum you would get if you add up the actual and estimated salaries of all
of the administrative level people. Aw.... it must be a coincidence.

Art S.

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