It's such a common practice in the popular media, both entertainment and 'news'--the portrayal of Texans as rubes, fools, rednecks, sadists, hicks, farmers and ranchers with IQ's no higher than the Dallas Cowboy Cheerleaders. It's so common we simply become innured to it, and quietly assume it must be true, because after all it's 'common knowledge'. California, on the other hand, is the epitome of all that is cool, forward-thinking and praiseworthy.
Movies such as 'Best Little Whorehouse in Texas' and the remake of 'The Man Who Loved Women'(with Julie Andrews and Burt Reynolds, back in their day), provide particularly funny skewering of Texas life. Chuck Norris did the state no favors with stilted productions of his TV series set in the state. Add in clowns like Jerry Johnson, eccentrics like Willie Nelson, stir gently.
OS has visited the place a few times over the years, and one of his best friends is a proud Texan transplanted to points north. These people are different, to be certain, but they are no fools. Anyone notice that there is an ongoing migration of population of businesses and people from California to Texas? Might that say something about life in those two states?
So, this little gem from Bloomberg today was not surprising.
Dallas hedge-fund manager J. Kyle Bass helped advise the University of Texas Investment Management Co. on taking delivery of 6,643 gold bars, worth $987 million on April 15, now stored in a bank warehouse in New York.
Bass, who made $500 million with 2006 bets on a U.S. subprime-mortgage market collapse, said managers of the endowment, known as UTIMCO, sought board approval to convert its gold investments into bullion this year. A board member, Bass, 41, said he was asked to help with that process.
While Bass, a managing partner at Hayman Capital Management LP, said in an April 16 e-mail that “the decision to purchase and take delivery of the physical gold” was made by endowment staff members, “I helped where I could.” Gold futures touched a record $1,489.10 an ounce April 15 in New York before closing at $1,486.
There's all sorts of paper floating about, putatively backed by physical gold. Both the gold and silver markets have become massive shell games, because there isn't even a fraction of the metal needed to deliver to all the customers who could demand delivery. So, UTIMCO decided it was time to pick the chips off the table and leave the game. They demanded and took delivery last Friday, in physical gold.
It's theirs, and no one else's.
Wonder what happens when another twenty or so similar funds decide to follow suit? Rather like a deadly game of musical chairs: twenty players, nineteen chairs, and when the music stops, someone ends up on the floor. Repeat--nineteen players, eighteen chairs.
This could get ugly, unless you're the board of UTIMCO. Yep, them folks is just a bunch of rubes and rednecks, so don't pay them no attention....
Moral of the tale: Don't mess with Texas. (And take delivery while you can...)
(Disclosure--long gold and silver--in self defense, 'cuz the money printing will eat us all up before too long.)
Showing posts with label University of Texas. Show all posts
Showing posts with label University of Texas. Show all posts
Monday, April 18, 2011
Monday, August 30, 2010
Hmm...University Of Texas Begins To Hedge Its Portfolio With Gold
This peeks above the radar from Inside Higher Ed.
News that the investment arm of the University of Texas has started buying up gold is validating the concerns of some analysts who fear high inflation and increasing U.S. debt will wreak havoc on other more commonly held endowment securities, such as bonds.
The University of Texas Investment Management Company (UTIMCO) announced last month that it would move $500 million into gold. While that constitutes just 3 percent of the $22.3 billion in assets UTIMCO controls, it’s a marked shift in strategy for a management company that had no gold in its portfolio a year ago.
(and later in the article)
Given the fact that a gold investment strategy is predicated on the idea that the dollar is declining and the nation is too deep in debt, some have described the gaga for gold trend gripping the conservative movement – see Glenn Beck – as ideologically driven.
But you don’t have to be a conservative talk show host to see the merits of UTIMCO’s position, said Sandy Leeds, a senior lecturer of finance at the University of Texas at Austin’s McCombs School of Business. Leeds was so fired up by the news of UTIMCO’s strategy that he wrote an op-ed on the subject for The Houston Chronicle, which originally reported on a public meeting where the investments were discussed.
“While unstated by UTIMCO, we should consider the possibility that they are hedging against a U.S. meltdown,” Leeds wrote.
Leed's op-ed is well worth reading.
The financial problems we face are immense. In addition to our trillion-dollar deficit, our total debt is approaching 85 percent of gross domestic product. A recent academic study by Carmen Reinhart and Ken Rogoff suggested that a debt level above 90 percent of GDP is a tipping point that results in slower growth.
In reality, I would be ecstatic if our debt level was only 90 percent of GDP. The real issue is that we have approximately $50 trillion of unfunded liabilities - Social Security, Medicare and Medicaid. This is a daunting liability. Public investors such as mutual funds, pension funds, endowments, hedge funds, foreign governments and individuals have all combined to loan the United States approximately $8.5 trillion to fund our accumulated deficits. If we wanted to be fully funded in today's dollars, we would need to issue another $50 trillion of debt.
Now, if OS may break into the local patios:
Ya'll, these are grownups who have to be in charge of the endowments of major universities, unlike the clown circus who run the White House and Congress. University of Texas existed long before this crew ever got together, and intends to be in business long after they have left to write their mutually-incriminating biographies.
These people ain't no AstroTurf, or TeaParty TeaBaggers, or Glenn Beck devotees, or secessionists, or Klan members, or any of that stuff. These are serious, sober, boring respectable people who have to make sure the alma mater is still in business for their grandchildren.
They are voting with their investment decisions, and they ain't endorsing The One, TurboTax Timmy, and Helicopter Ben, Miz Nancy and Mr. Harry, and Rahmbo. They are distancing themselves from this crowd, and trying to keep their corner of the world intact when things begin to come unwound.
News that the investment arm of the University of Texas has started buying up gold is validating the concerns of some analysts who fear high inflation and increasing U.S. debt will wreak havoc on other more commonly held endowment securities, such as bonds.
The University of Texas Investment Management Company (UTIMCO) announced last month that it would move $500 million into gold. While that constitutes just 3 percent of the $22.3 billion in assets UTIMCO controls, it’s a marked shift in strategy for a management company that had no gold in its portfolio a year ago.
(and later in the article)
Given the fact that a gold investment strategy is predicated on the idea that the dollar is declining and the nation is too deep in debt, some have described the gaga for gold trend gripping the conservative movement – see Glenn Beck – as ideologically driven.
But you don’t have to be a conservative talk show host to see the merits of UTIMCO’s position, said Sandy Leeds, a senior lecturer of finance at the University of Texas at Austin’s McCombs School of Business. Leeds was so fired up by the news of UTIMCO’s strategy that he wrote an op-ed on the subject for The Houston Chronicle, which originally reported on a public meeting where the investments were discussed.
“While unstated by UTIMCO, we should consider the possibility that they are hedging against a U.S. meltdown,” Leeds wrote.
Leed's op-ed is well worth reading.
The financial problems we face are immense. In addition to our trillion-dollar deficit, our total debt is approaching 85 percent of gross domestic product. A recent academic study by Carmen Reinhart and Ken Rogoff suggested that a debt level above 90 percent of GDP is a tipping point that results in slower growth.
In reality, I would be ecstatic if our debt level was only 90 percent of GDP. The real issue is that we have approximately $50 trillion of unfunded liabilities - Social Security, Medicare and Medicaid. This is a daunting liability. Public investors such as mutual funds, pension funds, endowments, hedge funds, foreign governments and individuals have all combined to loan the United States approximately $8.5 trillion to fund our accumulated deficits. If we wanted to be fully funded in today's dollars, we would need to issue another $50 trillion of debt.
Now, if OS may break into the local patios:
Ya'll, these are grownups who have to be in charge of the endowments of major universities, unlike the clown circus who run the White House and Congress. University of Texas existed long before this crew ever got together, and intends to be in business long after they have left to write their mutually-incriminating biographies.
These people ain't no AstroTurf, or TeaParty TeaBaggers, or Glenn Beck devotees, or secessionists, or Klan members, or any of that stuff. These are serious, sober, boring respectable people who have to make sure the alma mater is still in business for their grandchildren.
They are voting with their investment decisions, and they ain't endorsing The One, TurboTax Timmy, and Helicopter Ben, Miz Nancy and Mr. Harry, and Rahmbo. They are distancing themselves from this crowd, and trying to keep their corner of the world intact when things begin to come unwound.
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