Harvard’s Big Donors Dropping Like Flies

The schiesse has hit the fan. Or to put it more politely, the fallout from Lawrence H. Summers's resignation as president of Harvard University has now hit the school's pocketbook, impairing the biggest fund-raising operation in higher education.

At least four major donations to Harvard, totaling $390 million, have been scrapped or put on hold since Mr. Summers announced his resignation in February, according to people familiar with the matter.

Three of the withheld gifts would have been the largest in Harvard's history. They included $100 million from media mogul Mortimer Zuckerman to fund a neuroscience institute that has generated intense interest among Harvard researchers, and $100 million from Richard A. Smith, a former member of Harvard's governing board, to fund a 500,000-square-foot science complex planned for a new campus in Boston's Allston neighborhood.

At least one of the contributions was to be announced this spring: $75 million from David Rockefeller, the banker and philanthropist, to fund study-abroad trips for every Harvard undergraduate in need of financial assistance, a key element in Mr. Summers's plan to expand Harvard's global scope. Instead, Mr. Rockefeller downgraded his gift to $10 million, announced in May, for Harvard's existing Rockefeller Center for Latin American Studies.

The donors, who were supportive of Mr. Summers and elements of his vision for Harvard, have separately indicated that they won't contribute while the university is without a permanent leader.

http://online.wsj.com/article/SB115275908764105412-search.html?KEYWORDS=summers&COLLECTION=wsjie/6month

Told You So, Told You So!

Average Corn, Wheat Prices at 10-Yr. Highs

Wheat and corn prices have reached 10-year highs, the U.S. Agriculture Department reported Wednesday. Season-average prices are $3.70 to $4.30 a bushel for wheat and $2.25 to $2.65 for corn, the department said in its monthly crop report. The last time prices were that high was 1996.

That is good news to farmers who had a decent wheat crop but provides little comfort to those whose wheat was ravaged by drought.

Conditions improved slightly with rainfall last month in the central Great Plains. Still, as of June 25, nearly half the winter wheat crop, 46 percent, was rated in poor to very poor condition, compared to 17 percent last year.

The forecast for winter wheat production is 15 percent below last year, analysts said. The forecast for winter wheat production is 1.28 billion bushels, up 1 percent from last month's forecast.

The amount of wheat going into animal feed has dropped a little, and as a result, carryover estimates rose by 22 million bushels to 568 million bushels, chief economist Keith Collins said. He said price forecasts rose because prices have been strong.

http://www.foxnews.com/wires/2006Jul12/0,4670,CropReport,00.html

Everything you wanted to know about Warren Buffett and were afraid to ask

Buffett fans must think they've died and gone to heaven. Tonight, PBS' Charlie Rose begins Warrren Buffet - the mini-serieds, a three-part series about the legendary financier that looks at all aspects of one of the world's wealthiest men.

• Tonight: The Man. What is Warren Buffet really like — and what are his interests beyond finance and philanthropy?

• Tuesday: The Business. Buffett discusses his keys for successful investing — but does not make specific investment recommendations.

• Wednesday: The Gift. A closer look at his friendship with Bill Gates, which led to the recent combining of much of their vast fortunes for charitable ends.

"This is Warren Buffett in his own words," says Rose, who interviewed Buffett on-and-off for this series since 2004. Rose also is working on a documentary about Buffett. "He's a friend," Rose says. "This is not an analysis of his investment record. It's his story."

"This is a man who has a passion for his work as deep as anyone I've ever seen," says Rose, in a phone interview. "He is a living testament to the fact that the happiest among us are those who shape their lives in a way that satisfies their own values and passions."

Passions? In Omaha, of all places? We thought all Nebraska passions were extinquished at the local Dairy Queen.

http://www.usatoday.com/money/2006-07-10-buffett-usat_x.htm

The Hedge Fund No-See-Ums

They are Wall Street's version of the squee-gee people. And if former Mayor Rudy Giuliani could get the squeegee people off the streets of New York, why can't the U.S. Securities and Exchange Commission sweep their counterparts from the gutters of Wall Street?

This week, we'll look at the SEC's continuing failure to police the lawless new world of e-mail-based investment fraud, in which billions of dollars have been flagrantly stolen from everyday investors while the SEC remains fixated on its pointless pursuit of hobgoblins like the so-called "naked short-seller" menace.

The e-mail spammers of Wall Street are more than just a symbolic challenge to the rule of law in the white-collar world of high finance. Increasingly, they are emerging as a market-moving force in their own right, creating huge, multibillion-dollar market valuations for worthless penny stock companies that in many cases exist as nothing more than corporate shells.

Hedge funds have lately become players in this game as well, scrambling in growing numbers to load up early on the shares of e-mail spam stocks to build the "beat the market" performance numbers they have to show their investors at the end of each quarter.

And since big institutions ranging from banks and insurance companies to corporate and public sector retirement plans are handing over more and more of their assets to be managed by the hedge funds with the best performance numbers, it is easy enough to see how e-mail spam is developing into a whole new dog-wagging tail on Wall Street.

How has the SEC responded? By doing nothing. So what else is new?

http://www.nypost.com/business/sec_no_see_ums_business_christopher_byron.htm

Vice is Nice: Drink, Smoke and Gamble, and This Fund Soars

Over 150 funds call themselves socially responsible, investing only in companies that meet a series of ethical standards set by their fund managers. Then there's the Vice Fund. Gambling and casino stocks have risen steeply this year, in another sign that candy is dandy, but among other things, liquor is quicker.

Its prospectus says it favors "products or services often considered socially irresponsible." The fund has fulfilled that promise under several different fund managers, investing mainly in companies involved with alcohol, tobacco, gambling and military contracting. This politically incorrect approach has helped the Vice Fund outperform the Standard & Poor's 500-stock index from its inception in 2002. But the fund has had more than its share of management turmoil. A special monitor appointed by a federal court remains in place for Mutuals.com and all its affiliates, including the Vice Fund, to ensure compliance with securities laws.

The Vice Fund, now managed by Charles L. Norton, 32, and Michael J. Henry, 26, has stuck to its knitting. Both funds depend on the insight that stocks that exploit the dark side of human nature are a natural for Wall Street, particularly during economic downturns.

The Vice Fund returned 9.2 percent this year through Thursday, compared with 3.1 percent for the S.& P. 500. Over the last three years, the fund's return has been 20.6 percent, annualized, outpacing the 10.9 percent of the S.& P. 500. The fund has no load, or sales charge, and has an expense ratio of 1.75 percent. Its allocations as of May 31 included roughly 27 percent to casinos, gambling and lotteries; 24 percent to aerospace and defense; 24 percent to alcohol; and 21 percent to tobacco. From inception in March, the Gaming and Casino fund gained 0.8 percent through Thursday.

We're just getting started. Check out the rest at:

http://www.nytimes.com/2006/07/09/business/yourmoney/09vice.html?ex=1152590400&en=bbf348cef53b84cb&ei=5087%0A

You just can’t keep a bad scheme down

Some of our very favorite people, bluebloods from Texas and smart money from New York were sucked into investing in a classic penny-stock "pump and dump" ploy, according to a lawsuit filed in Texas federal court. Dobi Medical International, a Mahwah, N.J.-based company in the cancer-detection field, attracted a stellar roster of investors, including publishing scion Barbara Hearst and former National Security Agency chief Bobby Ray Inman.

Hearst, Inman and 26 others charge that Dobi duped them into ponying up cash by claiming it had a viable breast-cancer detection machine, which could detect cancer nearly three years before mammograms and at a fraction of the price.

"It was a scam," Hearst told The Post in a phone interview from her Sag Harbor home. "All the studies they had, the contracts they showed us for business overseas, were all fake."

One of the Dobi contracts - a $5.6 million deal with an India-based concern - was a "wash sale," in which the purchase price was refunded, the lawsuit charges.

A longtime activist for a cancer cure, Hearst said the presentation she attended in 2003 prior to investing was "good - very well done," and that she invested $250,000.

The fleeced plaintiffs, while pursuing an investment aimed at a greater public good, did ignore some warning signs. One red flag - first reported by the Austin-American Statesman - was that its "outside medical director," Dr. David Li, apparently never had the Harvard affiliation Dobi claimed.

Dobi did not return a call seeking comment. We have a sneaking suspicion that we saw him at Cru, our favorite corner winebar, enjoying a glass of two of Bois de Nassau Street: Blanc

http://www.nypost.com/business/scam_snared_gentry_business_roddy_boyd.htm

G.O.P. Gets More of Wall Street’s Moolah

On Monday, Goldman Sachs’s Hank Paulson, a longtime Republican, is expected to be sworn in as the next Treasury Secretary of the United States. His successor, Lloyd Blankfein, has already taken over as Goldman’s chief executive, putting a Democrat in charge of the world’s largest securities firm. Given the strong and shifting ties between Wall Street and Washington — not to mention the upcoming midterm elections in Congress — it seems a good time to ask: What are the political leanings of the major financial firms?

To gauge this, we looked at the contributions by the financial firms’ political action committees, both in the latest election cycle and the one of 2004. The data, which include donations to individual candidates but excludes contributions to other political action committees, party organizations and the groups known as 527’s, come from the Federal Election Commission, as compiled and posted to the Web by PoliticalMoneyLine.com.

Of the companies we examined — Goldman, J.P. Morgan Chase, Morgan Stanley, Citigroup, Merrill Lynch, Bear Stearns and Lehman Brothers — all have donated more money to Republicans than Democrats in the latest election cycle, a result that will probably surprise no one.

But there was another, more counterintuitive, trend: The data suggest that most of the bulge-bracket firms are betting even more heavily on Republicans in this election cycle compared with 2004. This shift to the right comes even as many political pundits say they expect Democratic lawmakers to fare better in the upcoming elections than they have in a decade.

There’s more. Check out http://dealbook.blogs.nytimes.com/?p=4834

Hedge funds: Playing dice with the universe

In every decade, certain cultural archetypes arise to become the avatars of their time. In the 1950s, there was the corporate "organization man" in his gray flannel suit; in the '60s, the tie-dyed flower-power hippie. In the '70s, there was the polyester-leisure-suited big-lapeled "est" sensitivity trainer. In the '90s, we had the perpetually casual-Friday-looking 'Net entrepreneur.

And for this decade? It can be none other than the international hedge-fund manager, who "bestrides the world like a colossus" (as William Shakespeare's Cassius described Julius Caesar just before assassinating him), from offices looking out over Long Island Sound in Greenwich, Connecticut.

But has pride come before a very big fall? Recent events in the financial markets suggest that the answer could be yes. On the real-estate pages of the New York Times, any story about the latest outrageous selling price of some co-op on the Upper West Side, or on the beach in St Barts, or the slopes of Vail is bound to have some reference to a hot hedge-fund manager as the purchaser. A new off-Broadway play, Burleigh Grime$, celebrates the wild ways of the title character, a hedge-fund manager who, in one of his more legitimate profit-making schemes, has dead fish dumped on the beaches of California to try to profit from an El Nino market panic.

Perhaps most cheeky of all, early last month, a manor estate just north of London became the venue for "Hedgestock", a psychedelic '60s-themed hedge-fund networking event, complete with groovily painted Volkswagen vans, and millionaire hedge-fund managers dressing as penniless tie-dyed hippies. In contrast to the original Woodstock (whose famous moniker of "three days of peace, love and music" was morphed into Hedgestock's "three days of peace, love and money"), where commerce was limited to trading in home-made jug wine and bad grass, the Financial Times reported that attendees at Hedgestock had to be satisfied with equally intoxicating Moet and Breitlings.

http://www.atimes.com/atimes/Global_Economy/HG06Dj02.html

Should Citi be carved up? Prince says no way, Jose!

That is the question posed in the latest cover story from Barron’s, which suggests that shareholders of Citigroup may demand radical change, including a possible dismantling of the company, if its stock continues to languish. A money manager at a small firm suggests that Citi might be worth $66 per share, or nearly 40 percent above its current value, if it were split into a United States-based retail bank, an international bank and a global investment bank.

But Citigroup’s chief executive and newly installed chairman, Charles Prince, thinks the notion is absurd on its face. He tells Barron’s:

“Breaking up Citigroup is the dumbest idea I’ve ever heard of,” says Prince, who wears cufflinks with the emblem of Citigroup progenitor First National City Bank, which traced its roots back to 1812. “You would take a franchise that people have worked almost 200 years to build, and break it up into two or three parts, only to see the parts acquired by others. The real question is: What would our competitors pay to be able to duplicate what we have?”

Saudi Arabia’s Prince Alwaleed Bin Talal, Citigroup’s largest shareholder, is also quoted as saying he opposes the idea of a breakup.

On his blog on Wednesday, Chad Brand of Peridot Capital Management, a small money management firm, said that Mr. Prince’s “blatant dismissal of the idea doesn’t bode well for investors.” Pretty swift on the uptake, Sherlock.

http://dealbook.blogs.nytimes.com/?p=4950

Morgan Stanley: Whole Lotta Shakin’ Goin’ On!

Shake ‘em, but don’t break ‘em! Morgan Stanley shook up the leadership of its Italian and Swiss units, with a focus on growth in Italy's midcap corporate sector.

The New York-based firm said Dante Roscini will become chief executive and country head of the bank's Italian business. Mr. Roscini, who will report to Jonathan Chenevix-Trench, chairman of Morgan Stanley International, will keep his role as head of investment banking for Italy.

Roscini succeeds Galeazzo Pecori-Giraldi as CEO and country head. Mr. Pecori-Giraldi will remain chairman of Morgan Stanley's Italian business and will become chairman of the Swiss private-banking unit.

Pecori-Giraldi will "lead a new initiative directed at capturing the substantial wealth management and investment-banking growth opportunities in the [Italian] midcap corporate sector," Morgan Stanley said.

http://online.wsj.com/article/SB115203945240297580.html?mod=googlenews_wsj

Hedge Fund-er tops Long Island’s Rich List. Guess who?

Ask his friends, and they'll tell you that James Simons, manager of a hedge fund based in East Setauket, is a private guy. He's been called the richest Long Islander, and not a lot of people know who he is.

At an estimated $2.6 billion, James Simons' net worth is greater than Cablevision's Charles Dolan. A few times more than Computer Associates founder and Islanders owner Charles Wang. Other Long Islanders you'd consider? Not even close.

In fact, Simons is one of only three Long Islanders on Forbes Magazine's annual list of the world's richest people, and he's No. 278 (Dolan is 355 and Home Depot co-founder Kenneth Langone is 548).

In May, the 68-year-old former math chairman at Stony Brook University gave the college $25 million to improve studies in math and physics, one of the largest gifts in its history. He also was named by the Bush administration to the National Mathematics Advisory Panel to suggest ways to improve the teaching of math.

In January he raised $13 million to keep a major nuclear physics experiment running at Brookhaven National Laboratory after it lost some of its government funding. And last year, Math for America, a foundation overseen by Simons, provided $25 million to recruit and train 180 math teachers over the next four years in the New York City public schools.

Simons' public call to improve America's math and science training seems a distinct departure for him after three decades of quietly building up a fortune in the mostly unregulated world of hedge fund investing.

http://www.newsday.com/business/ny-bzsimons0705,0,3996439.story?coll=ny-homepage-mezz