David Swensen, the legendary chief investment officer of Yale’s $20 billion dollar endowment, recently appeared on Consuelo Mack’s WealthTrack for a two-part interview.

Swensen has literally transformed the way university endowments are managed all over the US. He has been so successful and influential that he has set a new standard for a wide array of institutional money managers from pension funds to foundations, and was recently named to President Obama’s new Economic Recovery Advisory Board.

His track record tells the story. Under his leadership Yale’s endowment generated 20 consecutive years of positive returns from 1988 until June of 2008, the end of its fiscal year. In the decade ended June of last year, the endowment had clocked an average annual return of 16.3%, versus 6.5% for the average college endowment and 2.9% for the S&P 500. That performance put Swensen in the top 1% of all institutional money managers and

What a wonderful time to be alive! Never has it been easier to feel superior to our fellow man! So many dopey ideas…so many preposterous delusions! So many fools…so eager to part ways with their money!

We have to pinch ourselves occasionally…and remind ourselves that it is real.

Yes, after the real estate bubble burst, we thought the fun might be over. But no! In come the feds. As you know, what brought about the housing bubble was a sort of madness that caused people to do the damnedest things with their money. But now, the feds are doing even stranger and crazier things!

Actually, we were happy to see the bubble blow up. Spending more than you make is hardly a formula for wealth-building. All in all, we figured our countrymen would be happier, over the long run, if they started saving their money rather than squandering it. Besides, we liked seeing

Conventional wisdom says the Dow jumped nearly 3% Friday on the following perverse logic: Awful unemployment numbers would spur Congress to speed up passage of the “stimulus” bill, and happy days would soon be here again.

I have an alternative theory: After a lull of a couple of months, Paul Volcker is back in the news.

And when Paul Volcker’s in the news, the market feels good.  It’s the Volcker Effect.  He shows up on TV, it’s market Prozac.  A warm glass of milk.  Endorphins flow as traders conjure fuzzy memories of the guy who put the inflation tiger back in its cage  and sparked a secular bull market in stocks.

But don’t take my word for it.  Just look at his “news reference volume” on Google starting late last fall and compare it with a chart of the Dow.  You’ll find a rough but compelling correlation.

Think back to the final

Stocks highlighted here include Citigroup (C), Bank of America (BAC) and JP Morgan Chase (JPM).Yesterday, in his testimony before the Senate Banking Committee, former Fed chief and currently the head of the President’s Economic Recovery Advisory Board, Paul Volcker, called for “particularly close regulation and supervision, meeting high and common international standards for banks and other firms that are large enough to shake the entire financial system if they fail.”Among the ideas discussed was the creation of a super regulatory agency, perhaps within the Federal Reserve, which would be responsible for coordinating among the various agencies regulating/overseeing the financial companies.The House Financial Services Committee had also been considering setting up an entity to oversee systemic risks of the financial system.While we totally agree that the regulation of the financial system needs to be urgently strengthened to avoid any …

How many economic-advice-giving organizations does it take to run a White House?

MarketWatch reports:

President-elect Barack Obama tapped former Federal Reserve Chairman Paul Volcker to run a new White House advisory board tasked with offering independent advice about how to stage an economic recovery. Obama named the 81-year-old Volcker to head the President's Economic Recovery Advisory Board....

The board is modeled on the Foreign Intelligence Advisory Board that gave President Dwight Eisenhower independent opinions on intelligence issues. Austan Goolsbee, another key Obama adviser, will serve as the economic board's staff director and chief economist.

Volcker can be single-handedly credited with ending the great inflation of the 1970s, and has been critical of the unorthodox steps that Fed Chair Ben Bernanke has taken to address our current challenges. Although I share some of Volcker's concerns, it is not clear to me what specifically Volcker would propose to do instead.