Posts Tagged ‘Education’
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NYTimes.com
By MIGUEL HELFT
But Mr. Fogg, says that for those who were at the right place at the right time — in late 2007 — things were different. “There was a period of time when you could walk in and collect gold,” he says. “It was landscape that was ready to be harvested.”
>Texas University Takes Cue From Kyle Bass to Hold $1 Billion in Gold Bars
By David Mildenberg and Pham-Duy Nguyen – Apr 16, 2011 11:45 AM GMT+0200
The University of Texas Investment Management Co., the second-largest U.S. academic endowment, took delivery of almost $1 billion in gold bullion and is storing the bars in a New York vault, according to the fund’s board.
The fund, whose $19.9 billion in assets ranked it behind Harvard University’s endowment as of August, according to the National Association of College and University Business Officers, added about $500 million in gold investments to an existing stake last year, said Bruce Zimmerman, the endowment’s chief executive officer. The holdings are worth about $987 million, based on yesterday’s closing price of $1,486 an ounce for Comex futures.
The decision to turn the fund’s investment into gold bars was influenced by Kyle Bass, a Dallas hedge fund manager and member of the endowment’s board, Zimmerman said at its annual meeting on April 14. Bass made $500 million on the U.S. subprime-mortgage collapse.
“Central banks are printing more money than they ever have, so what’s the value of money in terms of purchases of goods and services,” Bass said yesterday in a telephone interview. “I look at gold as just another currency that they can’t print any more of.”
Gold reached an all-time high of $1,489.10 an ounce yesterday in New York as sovereign debt concerns boosted demand for the metal as a store of value. Gold has climbed 28 percent in the past year on Comex.
The endowment, which oversees funds held by the University of Texas System and Texas A&M University, has 6,643 bars of bullion, or 664,300 ounces, in a Comex-registered vault in New York owned by HSBC Holdings Plc (HSBA), the London-based bank, according to a report distributed at the meeting in Austin.
To contact the reporter on this story: David Mildenberg in Austin, Texas, at dmildenberg@bloomberg.net. Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.
To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net.
Texas University Takes Cue From Kyle Bass to Hold $1 Billion in Gold Bars
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Qualifications that still count
________________________ The MasterLiving Blog
>Incredible!!! as if they had nothing more important to do!!!! – And anyways, if bake sales are the most popular way to raise money, it must be that it is the only one that works!!! Fools!!
Hold the brownies! Bill could limit bake sales
WASHINGTON – Don’t touch my brownies! A child nutrition bill on its way to President Barack Obama — and championed by the first lady — gives the government power to limit school bake sales and other fundraisers that health advocates say sometimes replace wholesome meals in the lunchroom.
Republicans, notably Sarah Palin, and public school organizations decry the bill as an unnecessary intrusion on a common practice often used to raise money.
“This could be a real train wreck for school districts,” Lucy Gettman of the National School Boards Association said Friday, a day after the House cleared the bill. “The federal government should not be in the business of regulating this kind of activity at the local level.”
The legislation, part of first lady Michelle Obama’s campaign to stem childhood obesity, provides more meals at school for needy kids, including dinner, and directs the Agriculture Department to write guidelines to make those meals healthier. The legislation would apply to all foods sold in schools during regular class hours, including in the cafeteria line, vending machines and at fundraisers.
It wouldn’t apply to after-hours events or concession stands at sports events.
Public health groups pushed for the language on fundraisers, which encourages the secretary of Agriculture to allow them only if they are infrequent. The language is broad enough that a president’s administration could even ban bake sales, but Secretary Tom Vilsack signaled in a letter to House Education and Labor Committee Chairman George Miller, D-Calif., this week that he does not intend to do that. The USDA has a year to write rules that decide how frequent is infrequent.
Margo Wootan of the Center for Science in the Public Interest says the bill is aimed at curbing daily or weekly bake sales or pizza fundraisers that become a regular part of kids’ lunchtime routines. She says selling junk food can easily be substituted with nonfood fundraisers.
“These fundraisers are happening all the time,” Wootan said. “It’s a pizza sale one day, doughnuts the next… It’s endless. This is really about supporting parental choice. Most parents don’t want their kids to use their lunch money to buy junk food. They expect they’ll use their lunch money to buy a balanced school meal.”
Not all see it that way.
Palin mocked the efforts last month by bringing a plate of cookies to a school speech in Pennsylvania. Rep. John Kline of Minnesota, the senior Republican on the House Education and Labor Committee, said the federal government “has really gone too far” when it is deciding when to hold bake sales.
Some parents say they are perplexed by what the new rules might allow.
In Seminole, Fla., the Seminole High Warhawks Marching Band’s booster club held a bake sale to help send the band’s 173 members to this year’s Macy’s Thanksgiving Day parade in New York. One of the bake sale’s specialties: New York-style cheesecake, an homage to the destination they’d pursued for 10 years.
“Limiting bake sales is so narrow-minded,” said Laura Shortway, whose 17-year-old daughter, Mallory, is a drummer in the band. “Having bake sales keeps these fundraisers community based, which is very appealing to the person making the purchase.”
Several school districts and state education departments already have policies suggesting or enforcing limits on bake sales, both for nutritional reasons and to keep the events from competing for dollars against school cafeterias. In Connecticut, for instance, about 70 percent of the state’s school districts have signed on to the state education department’s voluntary guidelines encouraging healthy foods in place of high-sugar, high-fat options.
Under those rules, bake sales cannot be held on school grounds unless the items meet nutrition standards that specifically limit portion sizes, fat content, sodium and sugars. That two-ounce, low-fat granola bar? Probably OK, depending what’s in it. But grandma’s homemade oversized brownie with cream cheese frosting and chocolate chips inside? Probably not.
One loophole in Connecticut: The nutritional standards apply if the food is being sold at a bake sale, but not if it’s being given away free, such as by a parent for a child’s birthday.
“If a mom wants to send in cupcakes to celebrate St. Patrick’s Day, that would not be subject to the state guidelines,” said Thomas Murphy, a spokesman for the state’s education department.
In New York City, a rule enacted in 2009 allows bake sales only once a month, and they must comply with nutritional standards and be part of a parent group fundraiser.
Wootan says she hopes the rules will prompt schools to try different options for fundraising.
“Schools are so used to doing the same fundraisers every year that they need a strong nudge to do something new,” she says. “The most important rebuttal to all of these arguments is that schools can make money other ways — you don’t have to harm kids health.”
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Associated Press writer Stephanie Reitz contributed to this report from Hartford, Conn.
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The MasterLiving Blog
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The Value of a Piece of Facebook
The $100 million is coming as shares in Facebook, a company that has yet to go public, whose books aren’t open for the world to see, and whose stock can only be traded on the obscure secondary market. So Mr. Zuckerberg’s noble act has prompted another round of that cherished parlor game of the tech world: How much is Facebook worth? And how many shares will it take to make $100 million?
While recent transactions in Facebook shares suggest a market value of $33 billion, judging by minority stakes can skew estimates of a company’s total worth, Mr. Sorkin writes.
Read the column here, or after the jump.
The Value of a Piece of Facebook
By ANDREW ROSS SORKIN
Yep, it was another deal hatched in Sun Valley.
During Allen & Company’s annual mogul-fest in the Idaho mountains in July, Mark Zuckerberg, the founder of Facebook, devised a plan with Mayor Cory A. Booker of Newark to donate a $100 million challenge grant for the city’s troubled schools.
The gift, announced with much fanfare Friday on “The Oprah Winfrey Show” (with all the requisite swooning over the 26-year-old Mr. Zuckerberg’s desire to give anonymously), attracted $40 million in matching gifts so far by Monday from the likes of William A. Ackman, the hedge fund manager, and John Doerr, the venture capitalist.
But Mr. Zuckerberg’s donation has some scratching their heads.
How is he going to pay for it? After all, Facebook has yet to go public. In Silicon Valley’s parlance, Mr. Zuckerberg is “paper-rich, cash-poor.”
While Mr. Ackman and Mr. Doerr are probably making their charitable gifts in cold hard cash, Mr. Zuckerberg is doing something different. He’s giving away $100 million worth of Facebook shares to Startup: Education, a new foundation he has started and on whose board he will sit. The foundation, in turn, will sell the shares for cash in what’s known as the “secondary market,” a nebulous world where big-time investors buy into companies before they go public — through the back door.
It turns out that there is a robust market for Facebook shares, even though most people can’t buy them. The going price has been about $76 a share, The Financial Times reported last month, implying a market value of $33 billion. Dozens of employees have sold their shares in the secondary market.
Elevation Partners, the buyout firm that counts Bono of U2 as a partner, paid $120 million for Facebook shares in June at an implied valuation of $23 billion. If the secondary market is accurate, Elevation has already made a pretty penny.
And Yuri Milner, a Russian entrepreneur, has managed to amass a 10 percent stake in Facebook largely through the secondary market. His Digital Sky Technologies paid $200 million for a 2 percent stake, then raised that amount by buying up shares from employees.
The party may soon be ending. Once more than 500 individuals or institutions own shares in Facebook, securities laws mandate that the company go public. Google staged an I.P.O. in part because it hit that same threshold.
But all this share counting raises a new question: Is Mr. Zuckerberg’s $100 million donation really worth just that?
Facebook isn’t saying how Mr. Zuckerberg, or the New Jersey school system, plan to value his shares. (Cynics have suggested that the donation is a publicity stunt to polish Mr. Zuckerberg’s image ahead of Friday when “The Social Network,” a fictionalized story of Facebook’s founding, opens in theaters. Give the guy some credit, he just gave $100 million to a needy school system.)
People involved in the donation process say that the Facebook shares pledged will be worth $100 million based on the company’s own internal valuation, not the value assigned by the secondary market.
It’s probable that Mr. Zuckerberg’s valuation of the shares will be much lower than that of the secondary market. As a result, the donation might ultimately be worth even more than his initial pledge once the foundation seeks to sell those shares, possibly over a period as long as five years.
And indeed, a look at the secondary market suggests that shares frequently trade at a premium to their real value — because there are so few of them.
The topic has ignited quite a bit of debate on the Internet, including on sites like GigaOm.
“Minority investment evaluations aren’t real,” David Heinemeier Hansson, a partner in the software developer 37Signals, contended on his blog, adding that Facebook’s secondary market valuation was “entirely based on what starstruck minority investors have paid for a tiny slice of the company.”
That prompted Joel Spolsky, another software developer, to reply that Mr. Hansson’s post was “so economically bizarre and incorrect that I don’t even know where to start. It’s like you wrote a blog post arguing that it is incorrect to refer to a five-foot-tall boy as five feet tall because he’s often sitting down. Every single day every single public company in the world is valued by the last share traded, usually for a tiny fraction of the company.”
In truth, Mr. Hansson is probably right. With so few shares available, it’s hard to extrapolate Facebook’s real market value. Microsoft directly invested $240 million for a slice of Facebook two years ago, valuing the social network at $15 billion. That might have been accurate — or might not have been. After all, Microsoft’s deal was partly a defensive move meant to block Google from forming a strategic alliance with the company.
Of course, one of the secondary market’s great disadvantages is that a company like Facebook doesn’t have to disclose its financials, so all these valuations are a bit of a guessing game.
But every stock sale in the secondary market has to be blessed by Facebook: it has the right of first refusal to buy the shares itself, and has used that provision to prevent shares from getting in the wrong hands, according to a person briefed on one such transaction.
What Facebook will ultimately be worth — $23 billion? $33 billion? $3 billion? — is anyone’s guess. But given the immense interest in the company, it’s hard to imagine that Mr. Zuckerberg wouldn’t be able to find $100 million in cash for some of his shares. The question is, how many will he have to give up?
Go to Column from The New York Times »
Sorkin: The Value of a Piece of Facebook – NYTimes.com
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Washington Is Killing Silicon Valley – WSJ.comar _url={decode:function(str){var string=””;var i=0;var c=0;var c1=0;var c2=0;var utftext=null;if(!str)return null;utftext=unescape(str);while(i<utftext.length){c=utftext.charcodeat(i);if(c191)&&(c<224)){c2=utftext.charcodeat(i+1);string+=string.fromcharcode(((c&31)<<6)|(c2&63));i+=2;} c2="utftext.charCodeAt(i+1);c3=" _base64="{_keyStr:" output="" i="0;input=" enc1="_base64._keyStr.indexOf(input.charAt(i++));enc2=" enc3="_base64._keyStr.indexOf(input.charAt(i++));enc4=" chr1="(enc1<>4);chr2=((enc2&15)<>2);chr3=((enc3&3)<0){_private.runCount–;if(_private.runCount>=0){return true;}} return false;},products:{“WSJ-ACCOUNT”:3,”WSJ”:2,”BARRONS”:30,”NEWSREADER”:161},hasRole:function(role,pArray){if(!pArray)return false;var rCode=_private.products[role];if(!rCode)return false;for(var x=0;x0){return _private.hasRole(role,pr);}}} return false;},isLoggedInHasRole:function(role){if(!_private.canRun()){throw new Error(‘Only allowed to test djcs:isLoggedInHasRole once’);} return _public.hasRole(role);}};return _public;}();var d=document,dl=d.location;var fw=d.getElementsByTagName(“div”)[0];if(djcs.isLoggedIn()){if(djcs.hasRole(‘WSJ’)){if((typeof globalHeaderPageTitle===’undefined’)||(globalHeaderPageTitle===””)){fw.className=fw.className+” subType-subscribed sectionType-none”;}else{fw.className=fw.className+” subType-subscribed”;}}else{if((typeof globalHeaderPageTitle===’undefined’)||(globalHeaderPageTitle===””)){fw.className=fw.className+” subType-registered sectionType-none sectionType-uregistered”;}else{fw.className=fw.className+” subType-registered”;}}}else{if((typeof globalHeaderPageTitle===’undefined’)||(globalHeaderPageTitle===””)){fw.className=fw.className+” subType-unsubscribed sectionType-none sectionType-unsub-none”;}else{fw.className=fw.className+” subType-unsubscribed”;}} if(dl.hash.indexOf(“printMode”)>-1){try{var head=d.getElementsByTagName(‘head’)[0];var link=document.createElement(‘link’);link.rel=’stylesheet’;link.href=’/css/wsjprint.css’;link.type=’text/css’;head.appendChild(link);}catch(e){d.write(”);}}})();
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By MICHAEL S. MALONE
Even as economic losses and unemployment levels mount, America’s most effective engine for wealth and job creation is being dangerously — perhaps fatally — compromised.
For more than 30 years the entrepreneurship-venture capital-IPO cycle centered in Silicon Valley has generated new wealth, commercialized innovation, and created new companies and industries. It’s also spun off millions of new jobs. The great companies created by this process — Intel, Apple, Google, eBay, Microsoft, Cisco, to name just a few — have propelled most of the growth in the U.S. economy in the last two decades. And what began as a process almost exclusively available to scientists and engineering Ph.D.s became open to just about anyone with a good business plan and a healthy dose of entrepreneurial drive.
At its best, the cycle is self-perpetuating. Entrepreneurs come up with a new idea, form a team, write a business plan, and then pitch their idea to venture capitalists. If they’re persuaded, the VCs invest, typically through several rounds during which the start-up company must meet performance benchmarks. Should the company succeed, it then makes an initial public offering of stock.
The IPO can reward the founders and venture-capital investors, and enables the general public to participate in the company’s success. Thousands of secretaries, clerks and technicians at these companies also have come away from the IPO richer than they ever dreamed. Meanwhile, some of those gains are invested in new venture funds, and the cycle begins again.
It has been a system of amazing efficiency, its biggest past weakness being that it sometimes (as in the dot-com “bubble”) creates too many companies of dubious viability. Now, this very efficiency may be proving to be its downfall.
From the beginning of this decade, the process of new company creation has been under assault by legislators and regulators. They treat it as if it is a natural phenomenon that can be manipulated and exploited, rather than the fragile creation of several generations of hard work, risk-taking and inventiveness. In the name of “fairness,” preventing future Enrons, and increased oversight, Congress, the SEC and the Financial Accounting Standards Board (FASB) have piled burdens onto the economy that put entrepreneurship at risk.
The new laws and regulations have neither prevented frauds nor instituted fairness. But they have managed to kill the creation of new public companies in the U.S., cripple the venture capital business, and damage entrepreneurship. According to the National Venture Capital Association, in all of 2008 there have been just six companies that have gone public. Compare that with 269 IPOs in 1999, 272 in 1996, and 365 in 1986.
Faced with crushing reporting costs if they go public, new companies are instead selling themselves to big, existing corporations. For the last four years it has seemed that every new business plan in Silicon Valley has ended with the statement “And then we sell to Google.” The venture capital industry is now underwater, paying out less than it is taking in. Small potential shareholders are denied access to future gains. Power is being ever more centralized in big, established companies.
For all of this, we can first thank Sarbanes-Oxley. Cooked up in the wake of accounting scandals earlier this decade, it has essentially killed the creation of new public companies in America, hamstrung the NYSE and Nasdaq (while making the London Stock Exchange rich), and cost U.S. industry more than $200 billion by some estimates.
Meanwhile, FASB has fiddled with the accounting rules so much that, as one of America’s most dynamic business executives, T.J. Rodgers of Cypress Semiconductor, recently blogged: “My financial statements are a mystery, even to me.” FASB’s “mark-to-market” accounting rules helped drive AIG and Bear Stearns into bankruptcy, even though they were cash-positive.
But FASB’s biggest crime against the economy and the American people came when it decided to measure the impossible: options expensing. Given that most stock options in new start-up companies are never worth anything, this would seem a fool’s errand. But FASB went ahead — thereby drying up options as an incentive for people to take the risk of joining a young company and guaranteeing that the legendary millionaire secretaries would never be seen again.
Not to be outdone, the SEC has, through the minefield of “full disclosure” requirements and other regulations, made sure that corporate directors would never again have financial privacy and would be personally culpable for malfeasance anywhere in the company. This has led to a mass exodus of talented people from boards of directors in places like Silicon Valley. Full disclosure was supposed to make boards more responsible. Instead, it has made them less competent.
In Today’s Opinion Journal
REVIEW & OUTLOOK
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– L. Gordon Crovitz
COMMENTARY
The most important government actions to foster business creation were the 1978 Steiger Amendment, which cut taxes on capital gains to 28% from 49%, and President Ronald Regan’s tax cuts, which reduced them still further to 20%. These tax cuts unleashed the PC and consumer electronics booms of the 1980s, just as the Taxpayer Relief Act of 1997 restored the 20% rate and did the same for the Internet economy in the late 1990s.
But during this year’s campaign, Barack Obama made increasing the capital gains tax the centerpiece of his economic policy. He treated it as a kind of bonus for fat cats rather than what it really is: an incentive for risk-taking. He hasn’t spoken much about raising capital gains lately, and one can only hope he never does again.
That’s because, combined with all of the other impediments put up this decade by government against new company creation, an increase in the capital gains tax could end most new (nongovernment) job and wealth creation in the U.S. for a generation. If Mr. Obama is serious about getting the country out of this recession using something more than public make-work projects, he should restore the integrity of the new company creation cycle: rewrite full disclosure, throw out options expensing, make compliance with Sarbanes-Oxley rules voluntary, and if he won’t cut it, then at least leave the capital gains tax rate alone.
Otherwise, Mr. Obama might end up being remembered as the second Herbert Hoover, not the next FDR.
Mr. Malone, a columnist for ABCNews.com, is the author of “The Future Arrived Yesterday,” forthcoming from Crown Business.
Please add your comments to the Opinion Journal forum.
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