<p>Why</a> the University of Michigan is now a safer investment than U.S. government</p>
<p>
[quote]
"The University of Michigan has a very positive balance sheet, more assets than liabilities, and I guess thats the opposite of the U.S. government," said Don Grimes, a U-M economist.</p>
<p>At the same time, the university, which plans a $1.6 billion core budget in 2011-12, is still investing selectively. It's continued its massive building boom, expanding, renovating and adding facilities, including the $175 million North Quad complex and a forthcoming $116 million facelift for East Quad.</p>
<p>In addition, U-M paid $108 million in 2009 to acquire the 174-acre ex-Pfizer complex in northern Ann Arbor and plans to add 3,000 employees to staff the site by 2019.</p>
<p>Collectively, the actions underscore the broader point: U-M is more powerful financially than it's ever been before, despite the financial crisis
[/quote]
</p>
<p>i lol'd. go blueeeeeeeeee</p>
<p>I’m surprised people still listen to the rating agencies/care about their ratings after all of the crap ratings they gave to the CDO’s back before the financial crisis.</p>
<p>But it is still kind of funny.</p>
<p>It better be… I mean… when I’m investing 200k+…</p>
<p>When 10 year UM bond yield less than 230bps… let me know. If you actually believe Michigan bond is safer than treasury… I have some real estate to sell you…</p>
<p>The most ironic thing was on the day of the downgrade, 10 year treasury yield fell by almost 10 bps. Essentially investor’s were so worried the treasury got downgraded, they decide to go into a risk-off mode and move their money from equities to buy more treasury…go figure that one out…</p>
<p>Also, an AAA rated entity (other than multinationals like Johnson and Johnson etc) within a AA+ rated country is moronic at best. What do you think is going to happen to AAA UM bond value if US defaults? </p>
<p>A lot of municipalities and universities have already been downgraded after the US downgrade… so don’t be too happy just yet… UM is probably under review and will be next very soon. Watch for yield/borrowing cost to go up for UM.</p>
<p>"I’m surprised people still listen to the rating agencies/care about their ratings after all of the crap ratings they gave to the CDO’s back before the financial crisis.</p>
<p>But it is still kind of funny. "</p>
<p>No one really listens to S&P/Moody. We rate bonds/FI instruments ourselves. However, these companies exist because the government says they have to. Think about it. Pension funds and life cos have regulations forcing them to only buy assets rated IG by at least 2 rating agencies…guess who get paid to rate these junk… oh yea…S&P and Moody…</p>
<p>Funny S&P had Ireland and Greece both rated A- all the way up to early 2010 (couple months before **** hit the fan)… go figure</p>