[careinke]

Another one bites the dust.

Cliff (Start a rEVOLution, grow a garden)

[smallpoxgirl]

God. I can't believe it's that predictable. Every one of those "we're doing fine nothing to worry about" letters is followed within 48 hours by bankruptcy. It's amazing.

[Falconoffury]

I am reminded of a euphemism. "Don't attribute to wickedness what can be more easily explained by stupidity." Sometimes I truly have to wonder, are they THAT stupid?! More likely they have been planning this for months. Wachovia and Citigroup must be really depending on the promise of a bailout, because they don't have ground to stand on. Get your money out now because two weak banks "does not a strong one make".

[hope_full]

Well, I gotta say - thank you!

Tonight, the incredulous man (my husband) was watching the news and they talked about Citibank buying up Wachovia and I laughed out loud.

"Is it really a surprise that Wachovia went down?" I said out loud.

Hubby replied, "I never heard a word about them being in trouble from anyone - but you."

And then came the magical mystical moment when he asked, "So, who's next?"

For four months, I've made predictions based largely on the info I've read here and for four months, he's scoffed and doubted and even said I was "dead wrong." Now he wants me to look into my crystal ball and tell him what the future holds.

Finally.

I think we're finally approaching what could be called "a teachable moment." However, he still doesn't like my stock market predictions. His 401K is being bludgeoned and beat about the head and shoulders.

[jasonraymondson]

$this->bbcode_second_pass_quote('hope_full', 'W')ell, I gotta say - thank you!

Tonight, the incredulous man (my husband) was watching the news and they talked about Citibank buying up Wachovia and I laughed out loud.

"Is it really a surprise that Wachovia went down?" I said out loud.

Hubby replied, "I never heard a word about them being in trouble from anyone - but you."

And then came the magical mystical moment when he asked, "So, who's next?"

For four months, I've made predictions based largely on the info I've read here and for four months, he's scoffed and doubted and even said I was "dead wrong." Now he wants me to look into my crystal ball and tell him what the future holds.

Finally.

I think we're finally approaching what could be called "a teachable moment." However, he still doesn't like my stock market predictions. His 401K is being bludgeoned and beat about the head and shoulders.

[Dreamtwister]

$this->bbcode_second_pass_quote('Falconoffury', 'I') am reminded of a euphemism. "Don't attribute to wickedness what can be more easily explained by stupidity." Sometimes I truly have to wonder, are they THAT stupid?!

[Sixstrings]

From the Chronicle of Higher Education:

$this->bbcode_second_pass_quote('', 'W')achovia bank has frozen the accounts of nearly 1,000 colleges, leaving institutions unable to access billions of dollars they depend on for salaries, campus construction, and debt payments.

The freeze, which affects most institutions that invest their endowment income and other assets through Commonfund, has some colleges worried that they won’t be able to make payroll this period, said Verne O. Sedlacek, president and chief executive of Commonfund, which manages investments for nonprofit institutions. Many colleges use the organization's short-term investment fund for operating expenses, “almost as a checking account,” he said.

As of last Friday, the Common Fund for Short Term Investments managed approximately $9.3-billion in assets for 900 colleges and roughly 100 private schools.

Wachovia, which agreed to sell its banking operations to Citigroup this week, announced on Monday that it was resigning as trustee of the fund and would allow plan participants to withdraw only 10 percent of their assets—the value of the securities that had reached maturity. That percentage grew to 26 percent on Tuesday as additional securities reached maturity, and is expected to reach 57 percent by the end of this year and 74 percent by the end of 2009.

But unless the credit markets thaw, enabling a new trustee to sell more of the short-term securities in the fund, colleges won’t be able to access all their money until at least 2010.

Conveying Bad News

Yesterday, representatives of Commonfund held a two-hour conference call with rattled college investors. John S. Griswold, Jr., executive director of the Commonfund Institute, Commonfund's research arm, said the organization empathized with the colleges but had no control over Wachovia's decision.

“Obviously, it couldn’t come at a worse time, at the end of the month and the end of the quarter,” he said in an interview. “So we can understand why people are upset.”

The freeze could have the biggest effect on smaller institutions like Bethany College, in Kansas, which has $700,000 invested in the fund. President Edward F. Leonard III said his institution has enough money to cover costs for now because students just paid tuition, but he’s worried about the second semester, when the college typically dips into its short-term funds to pay for a variety of operating expenses.

“All colleges ride a cash roller coaster,” he said. “But the smaller colleges, like Bethany, we feel those bumps more than others do.”

On Tuesday, Mr. Leonard wrote to his congressman, Rep. Jerry Moran, a Republican, to urge him to support federal legislation intended to rescue the financial sector. Mr. Moran voted against the $700-billion bailout bill, which had been backed by the Bush administration, on Monday.

“I just e-mailed his legislative assistant saying, ‘Hey, its starting to hit home,’” he said. “If you think this is something confined to New York City and Washington, D.C., its already hit one of your campuses in Kansas.”

Concerns About Making Payroll

Minnesota’s private colleges are worried as well. On Monday, the state’s independent-college association sent a letter to its Congressional delegation, warning that some colleges would be unable to make their payroll obligations this week.

“The failure of the House to adopt the recovery plan this afternoon has immediate implications for private colleges in Minnesota,” the letter reads. “As a result of the frozen capital markets and the failure of Congress to adopt a reasonable recovery plan, many of the members of our association are at the edge of their abilities to adapt. Any further delay by Congress or the administration will have immediate devastating effects on these institutions and the families they serve.”

Colleges with larger endowments, like the University of Vermont, may find it easier to adapt. Daniel M. Fogel, the university's president, said his institution has “tens of millions of dollars” invested in the short-term funds, but he expects that it will be able to make do.

“We may need to rely on some other liquidity sources, but if so, very briefly, because then we’ll be collecting the spring tuition,” he said.

Russell K. Osgood, the president of Grinnell College, in Iowa, said his institution has a “modest amount” invested in the fund and did “not foresee any impact.” But he said he feared for some of his colleagues.

“I’m scared thinking about others who are more dependent on it,” he said.

Reeves Wiedeman contributed to this article.

[lowem]

Next in line for continuing bailouts (parts 2, 3 and so on) - the colleges, their students and then the guy who sells the textbooks.

Over here, my wife reports that the private universities have been seeing record intakes recently and they are even looking toward expansion, as the folks here take cover from the ongoing gloomy economic conditions by trying to study for higher degrees, and hoping to emerge when this blows over.

As a peakoiler - I wonder what happens when 3 or 4 years later ... they emerge blinking into the sunlight with their freshly minted degrees or diplomas ... it's still not over.

Or putting it another way, it's *all over*, one way or another

[Leanan]

The NY Times covered this story here.

[Cashmere]

$this->bbcode_second_pass_quote('lowem', 'O')ver here, my wife reports that the private universities have been seeing record intakes recently and they are even looking toward expansion, as the folks here take cover from the ongoing gloomy economic conditions by trying to study for higher degrees, and hoping to emerge when this blows over.

[DantesPeak]

$this->bbcode_second_pass_quote('', 'T')his is a fund that has been in operation for over 35 years, and is invested in ... corporate paper

[ubercrap]

I just went by a local Wachovia branch and the parking lot was packed full of vehicles and cars waiting to get in lines, people standing around, etc... Is this happening in your neck of the woods? Irrelevant at this point?

[Cashmere]

Definitely relevant.

Wachovia is still a functioning entity. Remember, it officially did not "fail."

So if 89% of deposits are pulled out, then they'll have to make it official.

[RdSnt]

We're going to find out soon, since you're buying it. Oh wait, we'll know cause Lehman, WaMu, etc. are going to tell you how much they are worth, and you are going to agree.

$this->bbcode_second_pass_quote('DantesPeak', '')$this->bbcode_second_pass_quote('', 'T')his is a fund that has been in operation for over 35 years, and is invested in ... corporate paper

[3aidlillahi]

I never set up my university ID with Wachovia as a Freshman despite having an account with them. Then last year, so I could buy some Au and Ag, closed my account with them. Good riddance.

Lowem,

I'm the guy that sells the books. And I can say pretty confidently that we'll be the last ones in line for a bailout. I've gotten 3 raises over the past 2 years that I've worked here. Roughly 20%, which is enough to keep up with the inflation I've been seeing.

Also, it won't be too bad if it's "all over" in 4 years. At least they spent their remaining years getting drunk and having fun, at least they'll think that.

[Newfie]

Here in Philadelphia we just went to ours to make a deposit.

Nothing unusual what so ever.

[Cid_Yama]

<i>I'd advise 80% of the idiot factory graduates in the U.S. against going to college. 70% of degrees are worthless anyway, and the other 10% are going to see their market share whither away.</i>

Liberal Arts Universities(as in NOT technical schools), are usually the first place most Americans are exposed to Logic and Epistimology.

Just learning Critical Thinking skills makes the experience worthwhile.

Living in the dorms puts a roof over your head with utilities paid and meals provided, not to mention hundreds of 'bedrooms' stocked with the opposite sex.

I found living in the dorms as close to Paridise on Earth as you can find.

What a wonderful port to weather an economic storm. I wish I was young again, so I could do it all over again.

[ubercrap]

The area is busy and maybe it was close to closing (if they have Sat. morning hours), but still, never seen it like it before and I'm usually by there every weekend. Suntrust and B of A nearby busy, but nothing abnormal...

[MrBean]

$this->bbcode_second_pass_quote('lowem', 'N')ext in line for continuing bailouts (parts 2, 3 and so on) - the colleges, their students and then the guy who sells the textbooks.

Over here, my wife reports that the private universities have been seeing record intakes recently and they are even looking toward expansion, as the folks here take cover from the ongoing gloomy economic conditions by trying to study for higher degrees, and hoping to emerge when this blows over.

As a peakoiler - I wonder what happens when 3 or 4 years later ... they emerge blinking into the sunlight with their freshly minted degrees or diplomas ... it's still not over.

Or putting it another way, it's *all over*, one way or another

[Niagara]

As long as you don't get one of those dreaded letters:

Dear Valued Customer:

Everything is fine. Nothing to worry about folks.

Blah blah blah

Sincerely,
The CEO