Mick Weinstein The Week's Best Stock Blogs

"As bad as you think it is, it's worse... unemployed people can't spur economic growth." That was Diane Garnick of Invesco's grim outlook yesterday for the U.S. economy through early 2009. And while those macro skies continue to darken, the market bear seems to drag a big, fresh, bloody institutional victim back to its cave every week or so. Banks, insurers, hedge funds, automakers - and now America's premier institute of higher education, Harvard University, is bleeding (crimson) red.

Officials in Cambridge announced this week that "Harvard's endowment - the largest in higher education - fell 22 percent in four months from its June 30 value of $36.9 billion, marking the endowment's largest decline in modern history." Now, endowments have been a darling of the finance world for the past few years, closely observed and often emulated as stars such as Yale's David Swenson used alternative investment strategies and heavy bets on particular asset classes to post remarkable returns. So market bloggers were anxious to weigh in on the significance and lesson of this loss:

• Portfolio manager Roger Nusbaum: "There is a fascination with these funds (I too am fascinated) but I think a line needs to be drawn between learning from them and trying to emulate them... The guys running these funds are smarter than we are, but no one is 100% correct all of the time."

• Felix Salmon reminds us that despite the posted loss, Harvard remains extremely rich: "Yes, a 22% drop in 4 months is pretty gruesome. But Harvard's endowment is still ginormous, by any standards, even those of the relatively recent past... if you're big enough to lose $8 billion on mark-to-market investment losses, you're certainly big enough to find $1.6 billion to spend on your stated purpose of helping to run the university."

• Nadav Manham suggests Harvard's managers were simply too aggressive for their mandate: "I suspect that the real problem Harvard faces is a simple cash crunch. It committed to spending a large percentage of its operating budget -- i.e. predictable, recurring, difficult-to-take-back obligations -- with endowment income, but chose to fund those obligations not with similarly predictable and recurring cash flows but with their polar opposite -- hedge fund, PE and VC fund LP interests."

• A few weeks ago, FT Alphaville provided a peek into what exactly Harvard was investing in.

• Mark Hulbert sees broader lessons in Harvard's loss regarding the downfall of hedge fund strategies.

• Conservative blogger Bill Quick found an opportunity to share his personal vision of how Harvard can save money: "if both enrollments and endowments are dropping, colleges may find themselves having to pare back on departments that don't actually teach things that are helpful in gaining their students useful employment. Things like ethnic and gender studies, radical liberation theory, religious science, and transgressive literature."

Big Three Bailout

While executives from Detroit's automakers came hat in hand to Congress this week, bloggers provided the color commentary:

• Daniel Gross at Slate: "Here we go again. The CEOs of General Motors, Ford, and Chrysler are headed back to Washington to ask for congressional help.... The sad fact is that the U.S. auto industry has essentially failed."

• Megan McArdle: "So GM wants $18 billion just for itself. Words fail. Or rather, I don't think I can print the words that immediately come to mind. This is a family blog... The real question is whether creditors are willing to ride out uncertainty until the Democrats can craft something."

• Economist James Hamilton has some ugly figures to show just how bad things are for the domestic automakers.

• John Cole has a clever history of the auto industry as a three-act play - Mitt Romney gets the last (wrong) word.

• Fund manager Jeff Matthews finds Ford's sudden declaration that it's committed to making greener cars way, way overdue, but concludes: "The Not So Big Three will get a bailout, because it's hard to explain to a powerful union that Wall Street bankers and bond dealers ought to be bailed out, but not Flint line workers."

• Rick Newman delivers a report card to each of the Big Three for their bailout plans. Chrysler gets a D.

• Michael Steinberg still a packaged bankruptcy as inevitable: "A streamlined bankruptcy with the government providing debtor in possession financing would actually improve customers' confidence. Uncertainty is GM's worst enemy."

• Evan Newmark at DealJournal thinks Congress will kill Detroit: "A reborn Detroit requires a radical, harsh restructuring for which neither Detroit nor Washington really has the appetite.

• Michael Moore (yes, that Michael Moore) in Daily Beast: "Let me just state the obvious: Every single dollar Congress gives these three companies will be flushed right down the toilet."

• DealBreaker has 7 fictions and colored facts from the Big Three.

Sadly, one of the finest and most prescient financial bloggers - who I've linked to often in this column - died this week. Here's the NY Times' obituary for Doris Dungey (aka Tanta), a statement from Tanta's partner at the outstanding blog Calculated Risk, plus a short eulogy from Steve Waldman.

And finally, look who has just joined the econoblogosphere - none other than Elliot Spitzer. Daily Beast welcomes the former New York governor aboard: "Since he's become the punch line of hooker jokes, it's easy to forget that Eliot Spitzer was once the bane of Wall Street and his expertise might be handy right now."