<p>"Yale will lay off up to 300 employees, but the University will double severance benefits for people laid off in the next six months, Vice President for Human Resources and Administration Michael Peel said in a letter to Yale managers today. </p>
<p>The grim economic outlook has forced the University to cut deeper into staff salaries, eliminating the equivalent of 500 to 600 positions. But Peel said in the letter that the typical annual rate of attrition and turnover is only between 300 and 500, so the gap cannot be closed by simply leaving open positions vacant. The difference will have to be made with some involuntary layoffs, administrators said."</p>
<p>"The boost to severance benefits means the University will not immediately see the savings from the layoffs, Provost Peter Salovey explained. But it still helps, he said, because the budget gap resulting from the endowments 25-percent plunge will widen over time. </p>
<p>As for fiscal year 2010, the University-ordered 7.5 percent cuts in staff and non-personnel costs will save an additional $37 million on top of the cost-cutting measures announced in December. Still, Yale still has not balanced the entirety of its $100-million budget deficit for fiscal year 2010."</p>
<p>They are so full of crap still pitching that 25% decline that it’s coming out their ears.</p>
<p>Yale wouldn’t even have to bat an eyelash at a 25% decline. Follow along at home. They spent 3.8% of endowment last year. So for every million in endowment, that’s $38,000.</p>
<p>So each million of endowment has fallen by 25% (hold it, let me stop choking with laughter) and is now worth just $750,000. </p>
<p>OK, so Mr. Yale, just go to the top of your approved endowment spending range (6%) and, voila, you’ve got $45,000 to spend – a substantial INCREASE over last year’s $38,000. In fact, all you would have to do is increase endowment spending to just 5%. </p>
<p>So why the layoffs? Could it be that you’ve been lying all along about the 25% decline in endowment? Could it be that when you sent your investment manager on his self-serving book tour where he trash talked Harvard and every other endowment manager not as brilliant as he is, that your guy was LYING?</p>
<p>Please explain how your endowment can be 80% invested in private equity, hedge funds, natural resources, and other non-liquid assets and you are only down 25%?</p>
<p>BTW, Yale had $8.7 billion in outstanding cash call commitments on June 30th. That’s about half of what Yale claims their endowment to be worth at the end of the year.</p>
<p>Anticipating the next question, Yale said that, if they had liquidated every dime of cash, bonds, and marketable asset on June 30th, they could have raised between $4 and $5 billion cash. That was before the market crash.</p>
<p>Money managers were clueless. Who needs brains when there is a bull market? Then the bull market ends and Warren Buffett was right. We see who was swimming naked in the ocean. Turns out almost all the big shot money mangers were swimming naked. </p>
<p>Yale is not alone. As a society, we are in for very tough times.
A good friend’s father said to me today, “I can’t believe I am going to live through two depressions. I thought I would never see another one.”</p>
<p>"Billionaire Warren Buffett says he made at least one major investing mistake last year by buying a large amount of ConocoPhillips stock when oil and gas prices were near their peak.</p>
<p>The famous investor recounted his errors in his annual letter to Berkshire Hathaway shareholders released Saturday morning.</p>
<p>Berkshire increased its stake in ConocoPhillips from 17.5 million shares in 2007 to 84.9 million shares at the end of 2008.</p>
<p>Buffett says he did not anticipate last year’s dramatic fall in energy prices, so his decision cost Berkshire shareholders several billion dollars."</p>