Word: bonding
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Dates: during 1980-1989
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...President Lane Kirkland says that the proposed budget "may have psychological value for the bond market and for bankers" but "places most of the burden on those suffering worst under the present economic conditions." The Congressional Black Caucus, a group of 17 Representatives, is no less worried. Representative Parren Mitchell, of Baltimore, has advised his fellow blacks to use every parliamentary tactic available to block budget cuts that would hurt their constituents, such as reductions in job-training programs and aid to cities. Says Mitchell: "The President has got to run the risk of losing another whole block of votes...
Skyrocketing interest rates have just about destroyed the bond market, once a pillar of stability and the source of most of the cash that corporations, states and cities borrow to build factories, schools and waterworks (see box page 14). Unable to raise cash by selling bonds, businesses have been turning to short-term bank loans. That is very expensive; the bank prime rate rose twice more just last week, by a total of three-quarters of a point, to as high...
Thomas O'Brien, vice president for financial affairs, said earlier this week that the declining bond market will only slightly affect the endowment and that "it takes years for the effect to work" on things like the Faculty's budget...
...ironically, the Faculty's income may suffer while the endowment continues to grow. Putnam said that alumni giving often hinges on fluctuations in the market--if people lose money because of a failing stock market, they tend to give less. And a bottoming bond market can "psychologically" cause potential donors to save up instead of putting out, Putnam added...
Since alumni donations--especially to the five-year $250 million Harvard Campaign that is in its first stages--directly affect the Faculty's budget and tuition levels, stock and bond market downfalls may mean steadily decreasing funds despite a rising endowment...