UA hit by financial crisis

On October 2 we pointed to a possible exposure for UA, UAB and UAH in a liquidity crisis involving Wachovia. We couldn’t get anyone at UA or the UA System to comment on the financial situation. In Monday’s Birmingham News we finally found out the University of Alabama System was heavily exposed to the market crisis.

The University of Alabama system was the most directly and immediately affected by market turmoil when, last week, a money market fund managed by Wachovia limited withdrawals. The UA system had $175 million in the Commonfund, which was used by 1,000 colleges nationwide.

That money was used for daily operating expenses at UA, the University of Alabama at Birmingham, the University of Alabama in Huntsville and UAB Hospital, according to UA spokeswoman Kellee Reinhart. The university was able to withdraw $61 million and expects to get the rest back as the underlying assets mature. In the meantime, the system raised cash from other investments.

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Thankfully, the Birmingham News got confirmation about the exposure of this major public entity to the market crisis. What is sad is that it took a major daily newspaper to get any comment out of the people in the UA System. And the story didn’t publish until October 13—over ten days after we first asked UA the question.

Is UA still living in the stone age? The Internet moves much faster than daily newspapers—something everyone involved with the University should learn. While daily newspapers aren’t irrelevant, UA should also consider answering questions from other outlets too. It shouldn’t take that long to get a major story like this published.

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  1. 4
    finebammer

    bullshit. our financials had issues no doubt. but fannie mae and freddie mac pushed us (and the world) over the cliff.

    the government (congressional democrats) thru freddie man and fannie mae pushed lending institutions to loan money to those who couldn’t and didn’t prove they could pay the money back. they did this with a r m s. (adjustable rate mortgages) they tell you down the road you can refi to a fixed. millions got caught before they could refi because interest rates went up. the markets crashed because fannie and freddie bought these loans, repackaged them and sold them to other institutions. then these institutions INSURED this bad paper thru companies like aig.

    and on and on and on. but the FACTS are that republicans have been raising red flags about these bad financial practices since ’02.

    alan greenspan testified before congress in ’04. he sounded like a prophet.

    in ’05 the regulator over fannie and freddie testified to the questionable practices and was ripped by the likes of maxine waters, barney frank, artur davis and MANY others, ALL DEMOCRATS.

    and how do i know, danny??? it’s all a matter of public record, danny. john mccain wrote a letter warning of the impending disaster. look it up, danny. can you google? ever heard of it?

    but for the common sense i inherited from my parents, i could be in the same boat.

    i wanted dream home property on the edge of the mountain where i live. getting the money to buy it, no problem. but after assessing the risk, i decided paying the money back might be a problem, despite what the lender told me.

    hey danny, i had to tell my kids (and grandkids) no on helping them finance a house just last year. that’s right danny. adjustable rate mortgage.

    danny, i don’t do arm’s. bad business. and i didn’t need to see the market crash to know it.

    but now thanks to your “american crisis” (translation: fannie mae and freddie mac encouraging criminally negligent lending practices, congressional DEMOCRATS paid, not only to look the other way but DEFEND them, dumbasses lying, cheating and engaging in numerous crimes to get the easy money) me and others like me, danny, those who played by the rules danny, have got to foot the bill to bail these criminals out.

    and the kicker? my 401k is trash.

    social security? what a joke. i’ll never get a dime of that money back.

    how you liking that “psychological effect” that SEVEN HUNDRED BILLION DOLLAR bailout is having on the market?

    american problem?

    the founders of the nation had a unique way of solving these type problems, danny.

    pick up a weapon.

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