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<p>This assumes that there has been a serious attempt to value the non-liquid assets held by these institutions, which they have recognized they have not done. There has been no attempt to mark these assets to market and most of them are completely illiquid and will remain so for a long time. They have unsuccesfully tried to sell off some their holdings in private equity and real estate and were only offered pennies on the dollar. </p>
<p>A strong indicator of the poor quality of the assets they hold is the huge amounts of borrowings they have had to do simply to pay for operating expenses. Their current risky bet is that they can borrow themselves out of their troubles until the private equity markets recover. That may take a really long time. If that is the case, the strong bond ratings they currently get will take a dive. If they can no longer borrow, they may be forced to dump their illiquid assets. Only then will we really know what their endowments are really worth.</p>