By Jacob Kornbluh & JI Staff
DEEP DIVE: “How To Lose $1 Billion: Yeshiva University Blows Its Future on Loser Hedge Funds” by Steven I. Weiss in TakePart: “What they couldn’t have known… a decade ago was that the real danger in Yeshiva’s new leadership was not to the school’s spiritual welfare but to its very existence. Over the years to come, the new leadership at Yeshiva would ramp up risk in the school’s investment portfolio, vastly increase spending, and do little to insure against a rainy day. When rainy days did arrive, with the global financial meltdown of 2008, Yeshiva was heavily exposed. Today, its finances are overwhelmed by a sea of red ink. According to a recent announcement by credit ratings agency Moody’s, the school will run out of cash next year.
“A two-year investigation by TakePart in association with The Jewish Channel reveals that the Madoff losses represent only a small fraction of far greater losses that were due to Yeshiva’s new investment and spending strategies. (DISCLOSURE: The author of this article attended Yeshiva University from 1998 to 2002, earning mediocre grades and a reputation for student activism, and was not invited to return for his senior year.) The school lost more than $500 million on its high-risk investment portfolio—after selling off nearly $500 million of ultra safe U.S. Treasury bonds when the new regime took over a decade ago, plowing the proceeds mostly into hedge funds and corporate stocks. Assuming the strategy of increasing risk in its investment portfolio would pay off with higher returns, the new president and the board that hired him took on a bevy of new expenses, spending down their cash reserves and resting much of Yeshiva’s fate on their hedge fund gambles.
“Now that those investments have proved to be losses, Yeshiva faces more than $550 million of debt, and it appears to have been tapping into the principal of its investment portfolio to cover annual deficits. On their own, any one of these changes—the half-billion-dollar hit to its portfolio, the diminution of liquidity, and the mass of debt—would be a significant, though bearable, difficulty for a university; together, their effect has been devastating.” [TakePart]
DAY 6: Abbas Criticizes Abduction of Israeli Teens: “Palestinian President Mahmoud Abbas on Wednesday defended his security cooperation with Israel against widespread criticism and said his forces are helping in the search for three Israeli teens missing in the West Bank.” [AP] — Israel re-arrests former Palestinian prisoners in hunt for teens: “Israel re-arrested 51 Palestinians freed in a 2011 prisoner swap deal, the army said on Wednesday, in the sixth day of a hunt for three missing teenagers believed abducted in the occupied West Bank.” [Reuters]
—AMERICANS STAND WITH ISRAEL: Tony Orlando Visits Missing Israeli Teens Families: “Tony Orlando, the popular 1970s American pop singer, said he visited the families of three Israeli teens missing in the West Bank, and called on his fans to hang three yellow ribbons in solidarity with the youths.” [AP] — Brooklyn Borough President Eric Adams led Tuesday night a candlelight vigil in support of the people of Israel and the families of the three boys kidnapped. Attended: NYC Public Advocate Letitia James, Councilwoman Laurie Cumbo, JCRC’s Michael Miller, Rabbi Joseph Potesnik, Crown Heights JCC’s Rabbi Chanina Sperlin and Rabbi Eli Cohen, BPJCC’s Yeruchem Silber, UJO’s Rabbi David Neiderman and community leaders. [JP Updates] — Related Events Today: NYC Comptroller Scott M. Stringer and the Jewish Community Relations Council will hold a press conference at noon, outside the Municipal Building, 1 Centre Street, New York, NY, to show New York’s solidarity with the people of Israel and the families of the three Israeli teenagers kidnapped. Ambassador Ido Aharoni, Consul General of Israel in New York will also attend… At 5:30PM, there will be a vigil across the street from the Embassy of Israel in D.C.
NYTimes Critiques #BringBackOurBoys Campaign: “Although the campaign’s Facebook page now has more than 90,000 followers, the hashtag has been used in just 8,044 tweets so far, according to data compiled by Brandwatch… While half of those tweets were posted from the United States, more than 10 percent have come from Nigerians who are, by coincidence, using that phrase to joke about their World Cup team performing so badly in its opening match in Brazil… Unlike the original Nigerian campaign, which was started by Internet activists frustrated by their government’s lack of action to find the schoolgirls kidnapped by Boko Haram militants, #BringBackOurBoys was started by graduates of the University of Haifa’s Ambassadors Online program, which was set up to train students to use the web for “hasbara,” a Hebrew term for public diplomacy…” [NYTimes]
Al Monitor: “Iran, world powers may start drafting nuclear accord” by Laura Rozen: “Iran and six world powers hope to start drafting the text of a framework for a comprehensive nuclear accord on June 18 and to complete a framework by the end of the talks here within the week, Iran’s Deputy Foreign Minister said June 17, as negotiations intensify even amid continued gaps on elements of a final deal… Iran had both a bilateral meeting with the United States and a trilateral meeting with the United States and EU on June 17.” [AlMonitor]
Congress Nears $43.3B Foreign Budget: “Senate appropriators on Tuesday advanced a $48.3 billion budget for foreign aid and State Department work next year. The funding would be slightly below this year’s but in line with that proposed by House appropriators. Like the House measure, the $48.3 billion Senate budget includes conditions on Egypt support. But it differs in not tightening restrictions on Palestinian aid after the formation of the recent unity government with Hamas.
“The Senate measure must be reconciled with the version that the counterpart House panel approved Tuesday night on a voice vote. A crucial issue will be the tougher conditions on aid to the Palestinians. “Israel cannot be expected to negotiate with a terrorist organization,” said Rep. Kay Granger, R-Texas, chairwoman of the House subcommittee. “Funding for the Palestinians is off the table until it is clear that the unity government is committed to peace and security.” Democratic Rep. Nita Lowey of New York said the money – some $400 million in economic and security aid provided annually – is in jeopardy.”[AP]
Jack Lew in Israel: “Iran’s nuclear program will remain peaceful”: “While the US will not allow Iran to obtain a nuclear weapon, US Treasury Secretary Jack Lew said Wednesday that sanctions will lead to an agreement that will “ensure that Iran’s nuclear program is entirely peaceful,” a step short of the complete dismantling Israel has urged.” [JPost]
2016 WATCH: Clinton: ‘Not prepared’ to back working with Iran: “Hillary Rodham Clinton expressed caution Tuesday about the United States working with Iran to combat fast-moving Islamic insurgents in Iraq, saying the U.S. needs to understand “what we’re getting ourselves into. “I am not prepared to say that we go in with Iran right now,” said the former secretary of state.” [AP] — Over 5,000 Iranians ‘sign up to defend Iraq holy sites’ [Yahoo] — Iran Warns U.S. Against Intervention in Iraq [FreeBeacon]
TOP-OPS: WSJ Editorial – “Our Friends the Mullahs: Tehran and the U.S. don’t have a shared interest in the Mideast” [WSJ] —- Michael Doran and Max Boot OpEd: “The United States Should Not Cooperate With Iran On Iraq [WashPost] — Cruz: ‘Under No Circumstances Should We Be Partnering With Iran’ [FreeBeacon]
HAPPENING TODAY: At 10:30am, JINSA’s Gemunder Center for Defense and Strategy will host a panel discussion for its Iran Task Force on the prospects for a final deal on Iran’s nuclear program featuring Ambassador Dennis Ross, Ambassador Eric Edelman, John Hannah and Ray Takeyh [JINSA]… At 7pm, EMET’s (Endowment for Middle East Truth) 8th Annual Dinner takes place at the Hyatt Regency in D.C. This year’s honorees/speakers include Dr. Charles Krauthammer, former Arkansas Governor Mike Huckabee, Deputy Majority Whip Congressman Peter Roskam, Congressman Dan Lipinski, and Dr. Ashraf Ramelah…. At 7:45, Crown Heights Young Entrepreneurs hosts ‘Shark Tank’ where members of the Crown Heights Jewish community will have the chance to sell their venture to potential investors David Schottenstein, Shmuel Gniwisch, Daniel Wolfson and Esriel Rapoport, with the opportunity to raise between $50-250,000 in seed money.[CHYE]
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HAPPY BIRTHDAY: Scooter Braun turns 33 today
BUSINESS BRIEFS: Paul Singer – Argentina’s nemesis is a tenacious tactician [FinancialTimes] Argentina Could Default After Supreme Court Ruling [TheCable] — NYTimes interviews, Urban Compass founder and new owner of a professional Israeli basketball team, Ori Allon [NYTimes] — Acadia, Benjamin Ringel face off over Food Emporium deal [RealDeal] — Casino battle royale brewing between Leon Black and David Tepper over Caesars sell-off plan [NYPost] — Kushner, LIVWRK grab big Gowanus development site [RealDeal] — Israel Englander buys French ambassador’s residence for record $70M [RealDeal]
STARTUP NATION: Google Chairman Eric Schmidt in Israel tells Israeli CEOs to stay close to their development centers [Globes] — Israeli mobile phone company Cellcom to offer TV over Internet [Reuters] — Michigan, Israel sign deal for economic projects [ToI]
WSJ: At Museum of Jewish Heritage, a Passing of the Torch: “Robert Morgenthau, nearing age 95, is passing the torch. The former Manhattan district attorney, who retired from that role five years ago, is handing stewardship of New York’s Museum of Jewish Heritage to real-estate developer Bruce Ratner. Mr. Morgenthau was the founding chairman of the museum, tapped by former New York Mayor Ed Koch in 1982 for a commission to create a New York City Holocaust memorial. The mission of the museum, which opened in 1997, is to memorialize the Holocaust and celebrate Jewish culture.” [WSJ]
Met won’t broadcast opera amid anti-Semitic fears: “The Metropolitan Opera has pulled the plug on its live global broadcast of an opera based on the terrorist murder of Leon Klinghoffer out of fear it could fan a wave of anti-Semitism across the world. The move to cancel the simulcast of “The Death of Klinghoffer” comes in response to pressure from the family of the victim, a Jewish New Yorker murdered by Palestinians during the 1985 hijacking of the Achille Lauro cruise ship.” [NYPost]
Presbyterian Panel Backs Israel Divestment Measure: “A proposal to divest stock in protest of Israel’s treatment of Palestinians is moving forward at a national Presbyterian meeting. A committee at the Presbyterian General Assembly approved a resolution Tuesday that would direct the church to liquidate its holdings in three companies whose products are used by the Israeli government in the occupied territories. The full General Assembly will vote on the proposal later this week.” [AP]
NYTIMES A1: Due to Lack of Yiddish Translation, Mistrial is Declared in Malcolm Smith Corruption Trial: “Malcolm A. Smith, at times one of New York’s most powerful political officials as the majority leader and the minority leader of the State Senate, was granted a mistrial on Tuesday by a federal judge in his trial for bribery and wire fraud. And the proceedings fell apart because of Yiddish.”[NYTimes]
Ex-Official at Met Council Gets Jail Time for Fraud: “The former chief financial officer of the Metropolitan Council on Jewish Poverty was sentenced Tuesday to pay $775,000 and serve four months in jail for his role in a decade long kickback scheme that defrauded the social-services agency of some $9 million. Herbert Friedman, 80 years old, admitted in May that he received $250,000 from the grand larceny and kickback scheme, which centered on submitting inflated invoices for the nonprofit’s insurance premiums.” [WSJ]
SPORTS BLINK: David Blatt is hot NBA prospect after 33 years in Israel: “The Cleveland Cavaliers, Minnesota Timberwolves, Atlanta Hawks and Golden State Warriors are all believed to be interested in hiring Blatt as an assistant, at least. He said various reports about him have been “mostly correct.” A subsequent Yahoo! Sports report said Blatt will interview for the Cavaliers’ head coaching job this Wednesday… Last month, he led Maccabi to an upset win over Real Madrid in the Euroleague finals… “I am leaving here not because I was asked to. The opposite is true, I was asked to stay, and offered the best possible conditions for such an event,” Blatt said. “But I just felt it is a move I wanted to make. It has been a dream of mine for almost forever to go and join a team in the NBA in some capacity. I wish I could have done it as a player. I wasn’t good enough. But now perhaps I’ll have that opportunity as a coach.” [NYPost]
That’s all folks, have a great Wednesday!
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