Tis the threshold of Autumn, and as such, time to don the colors and cheer for Alma Mater. Given that the football season is underway, as are classes, it is perhaps natural that my mind turns towards leafy green quads and brick buildings graced by the names of ancient philosophers, but annoyingly bereft of anything that resembles carpeting.
What further focuses my attention is the release of a couple of academic ranking reports, an exercise, which, as is the case with mock NFL drafts, now seems to have extended into the infinite. Time was that these realms were dominated by “U.S. News and World Report” Magazine. But that era has long since passed. Now, everyone appears to have gotten into the act, and, if it might be fair to state that we are perhaps rendered no worse for this proliferation, we are most certainly none the better.
The one that really caught my eye was published, improbably, by the Wall Street Journal, whose ratings topped out, at 1 and 3, by perennials Princeton and Stanford, but which surprisingly sandwiched in tiny Babson College, nestled as it is in Wellesley, MA at number 2. I know a couple of Babson Beavers, to whom I extend my congratulations. Nice job, Beavs!
My issues, though, are fixated further down the trough. One must migrate to Page 4 to locate my University of Chicago Maroons, who clocked in at 75. My undergraduate alma mater can be found almost adjacently – at 77. These recipients of my hard-earned tuition dollars thus trail significantly behind such Academic Edens as Loyola Maryland (23), Towson College (40), and, for careful readers of this space, the Institution Formerly Known as Manhattan College (52).
I remind myself, by way of consolation, that Dartmouth College (which should be in the Top 15 simply for its having been the model for “Animal House”) rates by the Journal at 62.
All things considered, the other venerable ivies made a decent showing. Harvard ranks 7th, and one can only envision their alums responding with condescending pity at this atrocious, uniformed, jealousy- driven judgmental folly. Columbia, their campus now an armed camp notwithstanding, is 14th.
However, and as if to remind us that the world as we once knew it has not dissolved entirely, Harvard and Columbia continue to rank, according to the Foundation for Individual Rights and Expression (FIRE), at the bottom of the Free Speech tables. Harvard, to its infinite credit, received a rating of 0.0 – ironically equal to Flounder’s GPA in Animal House (to which Dean Wermer admonishes him: “fat, drunk and stupid is no way to go through life, son”).
But to add a little zip to the Columbia figures, its “sister” school Barnard College, across Broadway (and please take it from someone who knows – if one traverses to the west side of 116th, it is best to keep a zipped lip there rather than risk offending any of the fair but perpetually triggered matriculating damsels, because them bitches will cut you), comes in 4th from last.
The University of Chicago, perhaps the GOAT due to its instituting a free-speech manifesto called The Chicago Principals, has slipped a little, but still ranks at a spiffy 13th from the top.
One can perhaps extrapolate the oddities in the longstanding college ranking protocol of the world’s leading financial industry daily to the confusions we are experiencing in the markets. Equity indices suffered their worst week in, well, in quite a while (OK; 18 months). And the punishment cruelly focused on some of my paying clients. I am not terribly sure what caused any of this, but the common pattern is one involving sated investors pushing away from the risk table. And one can hardly blame them on that score. Perhaps perversely, a putrid Friday session was catalyzed by an Employment report from the proven-to-be-perfidious Bureau of Labor Statistics, which not only missed on job creation estimates but also featured yet another downward revision to previous months.
And this in the near aftermath of the announcement of a rather alarming decrease in Jobs Openings:
As the labor picture weakens, there are further indications that the economy might indeed be rolling over. Crude Oil is in free fall, and speculative buyers are fleeing like rats from a sinking barge:
All of which is implies a pattern of diminished demand (as opposed to surging supply) which convinces me that when the FOMC meets Wednesday week, they will throw down a 50 bp cut, as catalyzed by the following motivations. They plainly wish to reduce rates, and apart from their no doubt laudable desire to do right by the economy, they have politics and their image to consider.
These factors induce them to go big. The totality of the data suggests that the economy would benefit from lower rates. If they wish to assist their political paymasters this November, .50 would provide significantly more succor than .25, and my read of the financial press suggests that their image now bears more risk to accusations of being too tardy, rather than too hasty, with the wielding of their axes. So, yes, I think they’ll lay down 4 bits, but it’s not in the bag. Yet. This week we must first endure, in addition to those annoying University of Michigan (22 on the WSJ Hit Parade) consumer surveys, and, of course, the latest Inflation data.
Upside surprises in these latter-mentioned realms could upset my whole hypothesis, but I don’t think it will. And anyway, even if Inflation ticks up, it can hardly hope to match that emanating from our institutions of higher learning, with respect to their time-honored currency of measuring the performance of their clients. The average GPA for a Harvard student, for instance, now stands at a gravity defying 3.8 – the result of decades of Grade Inflation. On the other hand, continued upside is mathematically challenging. They’ve already approached a ceiling here, because, unless they change the rules (which they very well might), this metric top ticks at 4.0.
I do believe that while the sober, somber timbre of the tape is somewhat justified, I also suspect that investors wish to offer the Fed the appearance of anemia, so as to further incentivize the latter to provide the full measure of rate relief which it is able to muster. Moreover, this dynamic traverses asset classes, as evidenced by the widely reported dis-inversion of the Treasury Curve, which, at maturities from 2 to 20 at any rate, has reverted to something recognizable by historical standards:
I never thought I’d live to a time when an upward sloping yield curve was not referred to as “normal”, but rather as “dis-inverted”, but that’s where we are. The Fed can help amend these perversities by further lowering overnight rates, and I them to give it the old college try. And this here note being about college, has, indeed, imbibed me with an extra dose of school spirit – so much so that I tried to follow the fortunes of the Babson (football) Beavers, only to learn that the school does not have a football team.
Neither for the years 1939 through 1968, did the University of Chicago. During which time it maintained a superior place in the U.S. News and World Report rankings – certainly many notches above Babson. In 2024, the WSJ has upset this order in dramatic fashion. It’s far too early to follow Babson and bail on football again – even if they did lose 24-0 to the Clairmont-Merced-Scripps Bobcats on Saturday. Next week, there’s another game; next year another WSJ rankings cycle, and, as ever, hope springs eternal.
TIMSHEL