Billions in Debt, Stanford University “Divests” from Coal Stocks

Stanford v Duke

Great plan.

Stanford University announced Tuesday that it would divest its $18.7 billion endowment of stock in coal-mining companies, becoming the first major university to lend support to a nationwide campaign to purge endowments and pension funds of fossil fuel investments.

The left’s financial geniuses have done it again. Because having $4.8 billion in debt just isn’t enough. Especially when your debt doubled between 2005 and 2009. And it’s now at a quarter of your endowment.

So Stanford is dumping those nasty coal stocks and investing in renewables which stop being profitable the nanosecond that taxpayers are forced to stop subsidizing them at crony capitalist gunpoint.

Not a problem for Stanford. Neither is having to sell taxable debt because your endowments are falling.

Top U.S. universities, whose endowments have been hit hard by fallout from the global financial crisis, are selling bonds to raise money to shore up their financial positions.

Stanford University became the latest top university to sell taxable debt to make up for recent losses in its endowment, the third largest of any U.S. university.

Stanford on Thursday sold $1 billion worth of debt in a sale led by Goldman Sachs, JP Morgan, and Morgan Stanley.

Meanwhile Standord’s endowment has increased far more slowly than its debt.

So sure, let the divestment movement roll. Ivy League colleges don’t need profitable stocks anyway. They just need to do whatever student agitators demand. And then issue some more tax exempt bonds.

It’s worked out so well for the rest of California. Just look at CALPERS where socially responsible investing resulted in a huge boom.

CalPERS leaped into “social investing” at exactly the wrong time. That trend had gained currency in the 1990s with an emphasis on buying into environmentally “clean” companies. Tech firms were high on the list, so the 1990s Internet start-up boom made social investing seem like a sound financial strategy. But when CalPERS debuted its Double Bottom Line initiative in 2000—so called because it would supposedly produce both good returns and good social policy—the tech bubble had already popped.

Many socially conscious investors then turned their attention to another industry that didn’t pollute: finance. One social-investing research firm named Fannie Mae the leading corporate citizen in America from 2000 through 2004. Other finance firms that attracted big cash from social investors included AIG, Citigroup, and Bank of America, according to an analysis by American Enterprise Institute adjunct fellow Jon Entine. When the market for shares of these firms imploded in 2008, so did the performance of social investors.

Desperate for higher returns, CalPERS also bought the riskiest portions of collateralized-debt obligations, accumulating $140 million of them by 2007. These were the packages of debt, largely subprime mortgages, whose defaults helped trigger the 2008 financial meltdown. According to a 2007 story by Bloomberg News, CalPERS bought these investments, known as “toxic waste” on Wall Street, from Citigroup, one of the sinking firms that the government later bailed out.

Not a problem, unless your pension depended on it. And then there will be a bailout. Because CALPERS and Stanford are all too big to fail. And California is too big to fail.

But the United States isn’t.

  • PDK

    Perhaps their coal stocks were kept so long against the environmentalists ideology because they were coal burners themselves.
    -
    You know what I’m talking about, the apostate whites doing the liberal thing, miscegenating.
    -
    An education today is actually an indoctrination of our white youth into the extinction of the white gene pool/race of liberal ideology.
    -
    Save your dough and your child, find an alternative to a liberal University.
    -
    The school of Hard Knocks, my alma mater, is the best bet I know of.
    -
    From the Sanctuary, @ http://the-pdk.blogspot.com/
    I’m PDK: Thank you.

  • DogmaelJones1

    Stanford University. Once worked there in the Graduate School of Business, about the time the Soviet Union collapsed, and when Gorbi paid a visit to the school everyone turned out to welcome him (this was before he set up shop in the de-militarized Presidio), faculty and students. Stanford is listed as another “Ivy League” school, but I think it and its fellow elitist schools should be renamed “Kudsu League Schools.” Kudsu is a vine-like growth that crawls up trees, creates a canopy, and suffocates vegetation below it of sunlight and even rain. Not the same as “ivy.”

    • Nabukuduriuzhur

      I like that name “Kudzu League”. That fits well.

      People joke about the Ivy League. Some really silly “studies” of late coming out of them.

      • DogmaelJones1

        Sure, go ahead use it.

  • CowboyUp

    Ironic, considering Stanford was founded by a railroad magnate.

    • objectivefactsmatter

      That was a long time ago.

  • Jakareh

    Hopefully, all of these compromised institutions will go belly up. I’m all for education, but there’s precious little of it going on in modern universities. Mostly what they’re doing is produce precisely the kind of individual who supports “divestment” from evils such fossil fuels and Israel.