Did Harvard Divest from Israel? Do You think They're Crazy?

There's an interesting story out in the ozone about how Harvard supposedly 'divested' from Israel. Even Drudge fell for this one.

Here's the skinny, direct from some people who ought to know.

What actually happened is that this is a developing country fund, Israel has just graduated into the OECD developed country status and the portfolio managers are simply making technical adjustments.It is NOT a divestment - even Hah-vahd isn't that stupid.

There's been no change in policy. Harvard has not divested from Israel. They simply moved Israel from the MSCI, an emerging markets fund to the EAFE index because of its successful growth. Harvard also has a number of other investments in what they refer to as developed markets including Israel, through outside managers.

OECD status, by the way is a major advantage for Israel. It means that Israeli debt and corporate equities are now going to be eligible investment vehicles for a number of new portfolios.

As an interesting sideline, Israel has something like an $60 billion in currency reserves and most of itis invested in US government debt.Meanwhile, the Israeli government’s foreign debt stands at a credit balance of -$32 billion. Or in other words, the Israelis are financing America’s debts – not the other way around.

Israel is doing the exact same thing for the US economy China is doing, although on a smaller scale.And given the hits the dollar is taking, I have no doubt that at least part of the reason Israel is backing the dollar is on the basis of our alliance with them.

Remember that the next time some cretin tells you the fairy tale about how 'the US never gets anything out of supporting Israel.'

(hattip memeorandum

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