I think charts tell a story that allows you to disregard the lies being spewed by those in power. Below are four charts that tell the truth about our current predicament. The first is from http://www.mybudget360.com/. The austerity and debt reduction storyline being sold by the MSM is a crock. The total amount of mortgage debt outstanding peaked at $14.6 trillion in 2008. The total amount of consumer debt (credit cards, auto loans, student, boats) outstanding peaked at $2.6 trillion in 2008. Today, mortgage debt outstanding stands at $13.8 trillion, while consumer debt stands at $2.4 trillion. Therefore, total consumer debt has declined by $1 trillion in the last three years. The MSM and talking heads use this data to declare that consumers have been paying down debt. This is a complete and utter falsehood. The banks have written off more than $1 trillion, which the American taxpayer has unwittingly reimbursed them for. Consumers have not deleveraged. They have taken on more debt since 2008. GMAC (Ally Bank) is handing out 0% down 0% interest loans like candy again.
Never has a chart shown why the country is such a mess, with no easy way out. It was the early 1980′s and the Boomers were between 23 years old and 40 years old. Seventy six million Boomers were in the work force. Was it the chicken or the egg? The financial industry peddled debt as the solution to all problems. But, it was up to the Boomers to take on the debt or live within their means. Boomers chose to live for today and worry about tomorrow at some later date. There is no doubt what they did. The chart tells the story. Boomers can moan and blame and point the finger at others, but they took on the debt in order to live at a higher standard than their income would allow. This is why 60% of retirees have less than $50,000 in savings today. This is why 67% of all workers in the US have less than $50,000 in savings. A full 46% of all workers have less than $10,000 in savings.
In order for this economy to become balanced again would require consumer debt to be reduced by $3 to $4 trillion and the savings rate to double from 5% to 10%. This will never happen voluntarily. Americans are still delusional. They are actually increasing their debt as credit card debt sits at $790 billion, student loan debt at $1 trillion, auto loans at $600 billion, and mortgage debt at $13.8 trillion. The debt will not decline until an economic Depression wipes out banks and consumers alike. America will go down with a bang, not a whimper.
Household net worth peaked at $65.8 trillion in Q2 2007. Net worth fell to $49.4 trillion in Q1 2009 (a loss of over $16 trillion), and net worth was at $58.1 trillion in Q1 2011 (up $8.7 trillion from the trough). So, household net worth is still down by $7.7 trillion from its 2007 peak. The really bad news is that the real estate portion of household net worth dropped from $22.7 trillion in 2007 to $16.1 trillion today, a $6.6 trillion loss. Real estate continues to fall.
You can clearly see who benefitted from the monetary and fiscal stimulus implemented by Bernanke, Geithner, and Obama. If household net worth is up $8.7 trillion from the trough in early 2009, but real estate has continued to fall. This means that the entire increase in net worth came from stock market gains. As you may or may not know, the top 10% wealthiest people in the US own 81% of all the stocks in the country. The other 90% own virtually no stocks, so they have been left with depreciating houses and inflating bills for energy and food. The top 10% are about to take another multi-trillion dollar hit in the next six months as QE2 ends and the stock market implodes. This will knock the country back into deep recession.
The most amazing chart of all time is the one below showing home equity since 1952. In a normal non-delusional world, people pay down the principal on their mortgage month after month, resulting in their equity in the house methodically rising. National home prices doubled between 2000 and 2005. One might ask, how in the hell could home equity drop from 60% to 58% between 2000 and 2005 when home prices went up 100%? Equity should have risen to 75%. Well the delusional Boomers struck again. The banks made it as easy as hitting the ATM to get equity out of your house and the Boomers jumped in with both feet, as usual. Americans withdrew $2.8 trillion of fake equity from their homes between 2003 and 2007. They lived the lifestyles of the rich and famous. BMWs, Mercedes, cement ponds (pools), new kitchens, Jacuzzis, home theaters, exotic vacations, hookers, facelifts, size DDs, and putting a little more in the church basket abounded.
This astounding level of stupidity and hubris left millions of Americans vulnerable when the bubble popped all over their faces. Millions have lost their homes. Almost 11 million more are underwater on their mortgage. There is years of pain to go. Household equity is now at an all-time low of 38.1%. What makes this number even more amazing is that 33% of all homes are owned outright with no mortgage. This means that the 50 million houses with a mortgage have far less than 38.1% equity. The people who sucked hundreds of thousands out of their houses to live the good life deserve to get it good and hard.
The last and most humorous graph shows how home price gains are fleeting, while the debt stays wrapped like an anchor around your neck. The greatest bubble in history was clear to Robert Shiller, John Mauldin and many other people with their eyes open. Ben Bernanke was not one of those people. He thought we had a solid housing market in 2005. Real estate values fell from 170% of GDP to 110% of GDP today, headed down to 90% or lower by 2015. The mortgage debt behind this real estate has declined by $634 billion, from 75% of GDP to 65% of GDP. Most of this was due to default, not payment.
It should be clear to anyone that we have a bit of a debt problem. The government solutions jammed down our throats since 2008 have added $7 trillion of debt to the national balance sheet. The only thing keeping this house of cards from collapsing immediately has been the extremely low interest rates put in place by the Federal Reserve. The end of QE2 potentially could result in interest rates rising. If interest rates were to rise 2%, this country’s economic system would implode. Time is not on our side. The debt cannot be repaid. The debt cannot be serviced. The debt has destroyed this country. Years from now when historians ponder what caused the great American Empire to collapse, the answer on the exam will be:
Buddabull says:
When all the trees have been cut down,
when all the animals have been hunted,
when all the waters are polluted,
when all the air is unsafe to breathe,
only then will you discover you cannot eat money.
Cree Prophecy
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12th June 2011 at 9:36 pm
Apollo says:
Wisdom of recent past:
Debt & deficits don’t matter.
– Dick Cheney
Regulations don’t matter.
– Alan Greenspan
The only thing matter is dance to the music.
- Chuck Prince
The only measure of business success is quarterly profit.
- Jack Walsh
Have faith in God and nothing else matter.
– GW Bush
Are you calling these wise men dummies Admin?
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12th June 2011 at 10:39 pm
Kill Bill says:
Ooooooo, I know I know dis be an ez un,, lets print more.
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12th June 2011 at 10:44 pm
AwholeDr says:
As in your post Friday, the grand system runs on debt, and increasing debt.
Since it’s all going to collapse someday very soon, maybe it’s a good idea to go into as much debt as possible. Your debt will be a couple of piss-drops in the ocean of debt that will be un-payable and therefore washed away.
Hot debate. What do you think?
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12th June 2011 at 10:46 pm
ron says:
From the lack of action in washington i just assume the current administration wants our country to fail so they can recreate it in some other way the big money likes.Theres a big correction on its way,how else can we compete with people who well work for next to knothing.were screwed.
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12th June 2011 at 10:52 pm
Hope@ZeroKelvin says:
But when you talk to people about this debt disaster, it is like some weird switch clicks off in their brains and they just tune out or change the subject.
It is like the problem is sooooo huge, the average, and above average, brain simply cannot engage, like bald tires on an icy road. You know you are skidding to a terrible crash as you speed to the edge of the 1000 foot cliff, but hey you are thinking, at least I have an airbag and insurance!
I do not know how to around this fatally delusional thinking of 99.999% of my fellow Amerikans, which is why I maintain that we are so freaking doomed.
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12th June 2011 at 11:18 pm
Reverse Engineer says:
The only alternative to not taking on debt was to Power Down after local Peak Oil was reached in the 1970s. The Back to the Land Hippies tried that soltuion, but they were marginalized and bribed into becoming Yuppies. An Unelected Cabal of Banksters led first by Milton Friedman who encouraged Tricky Dick to take the Dollar off the Gold Standard captured Da Goobermint, and not even Impeachment was able to stop the cascade. If not even forcing the POTUS to resign will resolve the problems, what are you left with? Only Revolution, and that doesn’t happen unless people are actually starving, and nobody was. Debt was peddled by the Banksters as the Solution, and there was no choice other than Revolution to stop that. Had J6P not taken on the necessary debt, Da Goobermint would have done it for him, as they are doing right now. The smart thing for J6P to do was to take the debt money and Party like its 1999, which he did.
Anyhow, when the debt music stops this time, there will be starving people, and there will be a Revolution. There will be Blood.
RE
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12th June 2011 at 11:53 pm
It’s the Debt, Dummy – James Quinn » MetalStack says:
[...] From the Burning Platform. [...]
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12th June 2011 at 12:39 am
Novista says:
RE
I find it strange that progressives generally bash the Chicago School, seeing as how Uncle Miltie’s policies fit right in their statist ballpark.
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12th June 2011 at 7:20 am
Administrator says:
Apollo
I think their words speak for themselves.
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12th June 2011 at 9:04 am
Administrator says:
RE
I think we are in total agreement on this one. Hell may have just frozen over.
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12th June 2011 at 9:07 am
none-of-ur-business says:
Jim, I am glad you continue to bring this back to the early 1980s and the boomers. People need to know this.
I was one of them, I was there.
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12th June 2011 at 9:49 am
Administrator says:
The Economic Statistic US Elites Keep ‘Hush-Hush’
Monday, 6 June 2011 at 12:40, By Ron Robins, Founder & Analyst – Investing for the Soul
It is a simple statistic that continues to warn of huge economic problems ahead for the US. Some economists call it the ‘marginal productivity of debt (MPD).’ It relates the change in the level of all debt (consumer, corporate, government etc.) in a country to the change in its gross domestic product (GDP). However, due to the message it is delivering, most US economists employed in financial institutions, governments and private industry, as well as financiers and politicians, want to ignore it.
And for the US economy and government finances, the MPD (and related variants of it) is continuing to indicate extremely difficult economic times ahead.
I have vague recollections of the MPD concept from my economics classes long ago. But I was re-introduced to it around 2001 by a renowned economist who, during the following few years prior to his passing, became alarmed as to the MPD path of the US. His name was Dr. Kurt Richebächer, formerly chief economist and managing director of Germany’s Dresdner Bank. Dr. Richebächer, was so respected that former US Federal Reserve Chairman, Paul Volcker once said of him that, “sometimes I think that the job of central bankers is to prove Kurt Richebächer wrong,” reported the online financial journal, The Daily Reckoning on May 15, 2004.
Investigating Dr. Richebächer’s concern further, I wrote an article on my Enlightened Economics blog on January 23, 2008, titled, Is the Amazing US Debt Productivity Decline Coming to a Bad End? I found that, “for decades, each dollar of new debt has created increasingly less and less national income and economic activity. With this ‘debt productivity decline,’ new evidence suggests we could be near the end-game… ”
Another way of viewing the debt productivity problem is to look at it in terms of how many dollars of debt it took to help create total national income, which is the wages, salaries, profits, rents and interest income of everyone. Again, from my above mentioned article, which quotes Michael Hodges in his Total America Debt Report, that, “in 1957 there was $1.86 in debt for each dollar of net national income, but [by] 2006 there was $4.60 of debt for each dollar of national income – up 147 per cent. It also means this extra $2.74 of debt per dollar of national income produced zilch extra national income. In 2006 alone it took $6.32 of new debt to produce one dollar of national income.”
Such data helps explain why US exponential debt growth—after reaching certain limits—collapsed in 2008 and contributed massively to the global financial crash.
However, whereas the US private sector debt has marginally ‘de-leveraged’ (retrenched) since that crash (which might now be reversing), the US government, as everyone knows, has run up mammoth deficits to purportedly keep the country’s economy from imploding. Thus, the US’s MPD is marching to another, perhaps even more frightening tune, suggesting government financial insolvency and/or debt default.
One fascinating way of looking at the declining MPD of US government debt has just been presented by Rob Arnott on May 9, 2011, in his post, Does Unreal GDP Drive Our Policy Choices? What Mr. Arnott does is to subtract out the change in debt growth from GDP, and refers to this statistic as ‘Structural GDP.’ He finds that, “the real per capita Structural GDP, after subtracting the growth in public debt, remains 10 per cent below the 2007 peak, and is down 5 per cent in the past decade. Net of deficit spending, our prosperity is nearly unchanged from 1998, 13 years ago.”
In its effort to counter the significant economic difficulties since 2008, the US government has added, or will have added, around $4 trillion in deficits (financed by new debt) in its three fiscal years 2009, 2010 and 2011. Yet, all this massive government deficit spending has failed to really ignite economic growth. Most likely this is because of the enormous dead weight of unproductive and onerous private sector debt, particularly that of consumer debt. Hence, real US GDP will have increased probably less than $1.5trn during these years. Including some further economic benefit in the years thereafter, a total GDP benefit of only about $2trn is probable.
So, $4trn borrowed for $2trn in GDP gains. Thus, in very rough round numbers, each new one dollar of US government debt might only produce $0.50 in new economic activity and probably only about $0.08 in new federal tax revenue. (Federal tax revenue as a percentage of GDP is around 15 per cent.) Therefore, the economic marginal return for each new dollar of US government debt is possibly around -50 per cent! If you loaned someone $10 million and they gave you back $5m, you would not be happy!
Hence, it might not be long before those holding or buying US government bonds perceive the reality that the US government, and US economy, are losing massively on government borrowings. This will result in much, much higher US government bond yields and interest costs. Most importantly, it may make the rollover of US debt and new debt issuance incredibly difficult unless either US taxes rise stratospherically to cover the deficits, and/or the US Federal Reserve money printing goes into hyper-drive to purchase the debt the markets will not buy. (Of course US banks, pension funds etc., could also be forced to buy them.)
Thus, the idea that US government debt continues to be ‘risk-free’ is absurd.
For this, and for many other reasons cited above, is why the US financial and political elites want to keep hush-hush about what the MPD and its variants reveal!
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12th June 2011 at 10:48 am
scott says:
I doubt the ‘baby boomers’ are a disproportionate part of our national debt problem especially as it pertains to housing. The San Jose Mercury News last year studied foreclosures in that city and found 2/3 were to Hispanic surnames though Hispanics composed only 1/3 of the city population. Other studies have shown blacks too were over represented in foreclosure activity. Even Barney Frank admitted in a display of candor that would have gotten a Republican forced from office that ‘credit was extended to groups who were not ready for the responsibility’. My jaw dropped when I heard him utter this on CSPAN.
The demographics don’t work either as baby boomers would have been well along the ‘housing ladder’ at the time of the 2003-2007 housing bubble. Anyone born prior to 1960 would have been in their mid fourties to late fifties during this time and would have been more likely to have more equity or been a part of the 30% that own their home. One might even conclude that baby boomers, having seen their equity slashed by the bursting of the bubble, were the most damaged by it.
That is not to say that there were no baby boomers engaged in equity mining, flipping or buying more house than they could afford just that it doesn’t seem logical that they would have been the prime culprits. Remember the US was 88 percent white when baby boomers were born and whites may are less than 2/3′s of the US population today and in the big bubble state of California
no longer a majority. My guess is that, because I have not seen any comprehensive racial or ethnic data on foreclosures, credit card defaults, personal bankruptcies etc, though such data is readily available, the results are too politically controversial for those in control of it to release.
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12th June 2011 at 11:50 am
Reverse Engineer says:
Antal Fekete wrote an article about 2 years ago arguing that the MPD was actually turning negative, and that was before QE2.
The thing you must remember though is that this is not a problem local to the FSofA, its systemic to all countries connected to the BIS, even creditor nations. Essentially, creditor nations like China have only been able to remain solvent by extending credit to subprime borrowers like the FSofA. When said subprime borrower defaults, the creditor is no longer solvent either.
The system is completely saturated with debt and you cannot extend credit out anywhere without blowback from it. So the system cannot grow, but in order to function it must grow. Ya can’t pay interest in a system with no growth, and interest is what the Illuminati live on. Well, that would be in normal times. Now the Illuminati live on ZIRP money Helicopter Ben loans them to gamble with in the Stock Market.
The ONLY questions now are WHEN and HOW the system will collapse, not IF it will collapse. Again the thing to remember is this is not strictly an FSofA problem of idiot CONgress Critters, though that certainly exacerbates the problem. However, even if you Cloned Ron Paul and filled every seat in CONgress with the clones, you would still have the same problem and you would still end up with a collapse, just a different sort of collapse.
This is not a problem that began with Da Fed in 1913, though again that exacerbated the problem. It began in 1692 at the very beginning of the Capitalist era when Master of the Mint Sir Isaac Newton was running the show in Jolly Old England. The whole Ponzi took off from there, though it had its roots in the banking house of the Medici before that, and that had its roots in Roman Banking. However, it expanded geometrically with the discovery of the New World and then the discoveries of the Enlightenment allowed the exploitation of the thermodynamic energy of fossil fuels. Banksterism was able to grow bigger than it ever had before, and now it is this Global Ponzi of Debt began so long ago that is all crashing down. Its far bigger than the World Trade Center collapse, far bigger than any Fourth Turning collapse that has come during the expansionary phase. It represents a Civilization level collapse equivalent to the collapse of the Roman Empire, but on a MUCH bigger scale.
When this one blows, it will blow big, in conflagrations such as have never been seen before in all of recorded history. You have a front row seat for it, count yourself lucky, only a few people alive every 1600 years or so gets to witness the collapse of a Civilization.
Coming Soon to a Theatre Near You.
RE
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12th June 2011 at 12:11 pm
Jason18 says:
Obama got married to a woman whose last husband left her and the kids. He lived a high rolling life style and burried them in debt. He then dissapeared without a trace. Now Obama looks at $250,000 in credit card debt, $900,000 in mortgage debt, $150,000 in school debt, $60,000 in auto debt. He works in the services industry and takes homes 35k per year. He’s trying to hold everything together. Everyone is screaming at him because he hasn’t solved the massive problem that he willingly stepped into. What everyone screaming at him completely fails to acknowlege is that the problem is not solveable at all. There is no solution and nothing he does has any real impact. The situation and the coming catastrophic consequence are set in stone. The family wil default on their bebt, suffer the consequences, and begin anew. His wife could have married McCain but this would have solved nothing. She could divorce Obama and marry Romney. Again, no solution. The debt is too big. The default is coming.
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12th June 2011 at 1:40 pm
Swede says:
Yes well read your:
Thirteenth Amendment to the United States Constitution
Section 1. Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.
Section 2. Congress shall have power to enforce this article by appropriate legislation.
All Congress has to do is to pass a law saying it is illegal to have any debt over $2,000 or some random amount and anyone who can not pay off their debt is now in violation of this new law. Punishment for violation of this new “American Debt Free Act” is SLAVERY, ie living in a Debtors Prison earning 12 cents and hour breaking rocks until you pay off your $44,000 in debt.
This is a possible scenario all spelled out right there in our Constitution. Slavery has NEVER been Abolished in the U.S.A. or the world for that matter, just disguised. After all how do they make justification for the 2 million plus people in jail right now? They are slaves too. Otherwise they would be paid federal minimum wage for their labors.
The solution? Start your own home business, buy lots of guns, silver and gold coins and start a vegetable garden and a chicken hut.
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12th June 2011 at 6:45 pm
Buckhed says:
Sorry Swede…they could pass a law making that illegal in the future but not for past deeds.
Article 1 section 9
No Bill of Attainder or ex post facto Law shall be passed.
However with the present SCOTUS I wouldn’t put anything passed them.
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12th June 2011 at 1:21 am
Reverse Engineer says:
Since when has any Constitutional Law been obeyed anyhow? Any article could be repealed at the drop of a hat. Whoever is in power can write the law to suit whatever needs they have at the time.
Da Goobermint will drop down lots of Laws here, as they are already doing. At a certain point, the laws become unenforceable and people just ignore them. Read Dmitri Orlov, that is precisely what happenned in the old Soviet Union.
If you are counting on the LAW or the CONSTITUTION to save this country, you are going to be sadly disappointed. Law is nothing more than a codification of behaviors designed to keep the people who write the laws in power. The Constitution of the FSofA was written by Landowners who wished to justify their ownership of land. It doesn’t protect anyone who is not an Owner, it certtainly does not recognize Women as being anything more than Chattel and any prohibiton against Slavery or against Grandfahering your debt once laws are changed could easily be changed if it is in the interest of those in power to do so.
Property Ownership of the Earth by any individual is fundamentally WRONG, and because the Constitution protects this concept, it is fundamentally flawed as well. Basing a society on Prperty Ownership of Land and the means of production that all depend on violates the concept that All men are Created Equal. All men are NOT created Equal as long as there is one class of Haves and another of Have Nots.
We can only have a Just Society when we repudiate the concept of Land Ownership. Until we do that, it will always be a battle of Haves and Have Nots.
RE
Hot debate. What do you think?
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12th June 2011 at 1:52 am
Swdish American Swede says:
If youre rich aunt is not there to pay the debth, who is? China? In Europe we pay up to 25% GST, not that I like it, but the finances are in order and people are spending like crazy, at least in this country. Could maybe Americans pay 9% (or maybe 9.99)? For a 5-year period? That way the debth would be at least halfed, or more.
Take back all troups from Middle East, let the Euros take care of the “sh-t”, because if US leaves they will be obliged, (including the French) to take care of the mess, because they are most concerned. Be a little tough, and more isolationist. My advice. Anybody listening? I did vote democrat and things seems to get worse. With the GST money infrastructure can be invested and repaired, and creating jobs.
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12th June 2011 at 9:52 am
Michael Rivero says:
Under the private central bank debt-based currency model, everything the banks or the government does creates more debt than it does the money supply. There is nothing the banks or government can do that doesn’t accelerate the debt faster than the money supply; the system is designed that way. The Federal Reserve is doomed by its design to implode, but only after transferring all the real assets to the owners of the private central bank. The Federal Reserve System is working as it was designed to so; the wealth of the nation to the bankers, and worthless paper notes to the people.
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12th June 2011 at 11:13 am
Poi Dog says:
Some of the hippies decided to go “back to the land” after RFK was murdered, maybe used the yuppie years of Reagan to start a “right livelihood” home business to pay for the land, develop a private water system and garden, get the chicken house together, plant timber, and began collecting silver when it was 5 bucks an ounce.
We may not be any better off than anyone else when TSHTF, but, we have enjoyed our life while being here.
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12th June 2011 at 12:24 pm
Pirate Jo says:
Scott, it might be easy to pin all of our problems on the Baby Boomers, and yes they have been the generation in power for the last twenty years. But what is it we are asking them to have done, that we ourselves (I’m a Gen X’er) think we would have done differently?
Gen X might be less amenable to government solutions to our problems, but that’s because the government programs we have always paid into have been designed to screw us from the beginning. So of COURSE we hate government solutions to problems. And that is probably a good thing, but if we had grown up seeing government programs promise us a better future, maybe we would be happier with them. Is our generation really a bunch of better people than the generation before us? Or are our views just skewed against certain problem solutions because we have seen them fail?
Ultimately I think our problems stem from failures and weaknesses in human nature itself, and this is not confined to any specific generation. Each generation makes its own mistakes and hopefully learns from them. I hope we learn not to trust government, and to be more self-reliant. I hope we learn that we can’t just give people free shit or bailouts and expect them to thank us for it.
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12th June 2011 at 12:56 pm
June 13, 2011: Today’s Alternative News « Sheep Pee! says:
[...] IT’S THE DEBT, DUMMY June 13, 2011 [...]
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12th June 2011 at 2:32 pm
Colma Rising says:
Pirate Jo:
And here I was nominating you for POTUS 2018 on the “Pull The Plug” platform…
I respectfully withdraw my nomination.
BBES
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12th June 2011 at 2:43 pm
Paul R. says:
No, no, no, no, no, no. The individual debtor is NOT responsible for the aggregate debt problems of the whole United States. Each individual is NOT an economist, does NOT understand our monetary system, and is NOT responsible when the structural faults of our monetary system lead to problems today, the same way they did in 1929. It is ridiculous to think that any person would say to himself before taking out a loan, “Hm, let’s see what the general indebtedness of the public is before I take out this loan.”
That is why the banks were regulated after the Great Depression. We are back in depression due to the faults of our banking/monetary system AGAIN, because those regulations were removed or circumvented. The problem is a systemic one, unrelated to any individual decision to take out a loan. Systemic problems are dealt with by reforms involving structural changes or regulation, not by blaming the individual.
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12th June 2011 at 4:04 pm
Reverse Engineer says:
Good Grief. I have written before about the recent spate of IPOs of Junk Tech Companies being spewed out by the underwriters at Goldman Sacks-the-Taxpayer and JPMC. Recently they offered up Pukeon valued at something like $750M I think, for a company that has never turned a profit.
Now up for sale, Facebook valued at-get this- a whopping $100B!!!!! Zuckerberg should get a nice Golden parachiute out of that one, along with some tidy fees for the Banksters selling this Dog Shit to Pension Funds of J6P.
COME ON! HTF is a social netwroking fad site worth $100B? Do people really click on ads that many times on Facebook?
The Bubble Blowing effort continues apace here once again in the Dot Com companies. This worked out so well the first time they did it they just have to do it again!
“Insanity. Doing the same thing over and over again and expecting different results.”-Albert Einstein.
RE
———
une 13, 2011, 2:48 p.m. EDT
Facebook IPO seen moving ahead in first quarterStories You Might Like
June 13, 2011 By John Letzing, MarketWatch
SAN FRANCISCO (MarketWatch) — Facebook Inc. is expected to move forward with its initial public offering of shares early next year, as anticipated, and could be valued at more than $100 billion, according to a report published Monday.
CNBC, citing unnamed sources, reported that the social-networking service will likely stage its highly anticipated IPO in the first quarter, “with a valuation that could top $100 billion.”
One factor in the timing of the IPO is a Securities and Exchange Commission regulation for companies to start publicly disclosing financial data once they have more than 500 investors, according to the report.
A Facebook spokesman declined to comment.
Click to Play Six million ‘unfriend’ FacebookFacebook grew only 1.7 percent and lost 6 million U.S. members in May. While the company is still nearing 700 million users worldwide, has its growth spurt reached its peak?
Facebook has long anticipated reaching the 500-investor mark, and at that point potentially moving ahead with an IPO that would bring in additional capital as the company starts making its financial disclosures.
In documents provided to prospective investors as part of a $1.5 billion funding round for Facebook led by Goldman Sachs Group Inc. /quotes/zigman/188479/quotes/nls/gs GS +0.09% , and closed in January, the company said that it expected “it will have 500 or more holders of record” of one or more classes of its stock as of the end of this year.
As a result, Facebook said it expected to start filing public financial disclosures “no later than April 30, 2012.”
Another factor behind Facebook’s impending IPO, according to the CNBC report, is the current difficulty faced by employees who hope to cash in some of the equity offered to them as an enticement to join the company.
Facebook, like other firms, has a so-called “right of first refusal” related to insider shares, which lends the company an ability to veto a sale to an outsider, or purchase the stock itself.
Facebook is perhaps the most anticipated of a number of Internet-related firms now coming to the public markets.
LinkedIn Corp. /quotes/zigman/5131883/quotes/nls/lnkd LNKD -0.03% , for example, went public last month, in an IPO that valued the company at roughly $3 billion. LinkedIn shares are now trading at around $75, valuing the company at about $7 billion.
Groupon Inc., a provider of daily online coupons, filed papers for a $750 million IPO earlier this month, while online music service Pandora Media Inc. has also filed for an IPO.
/quotes/zigman/188479/quotes/nls/gs Add GS to portfolio GS Goldman Sachs Group Inc. $ 137.65 +0.12 +0.09% Volume: 4.73mJune 13, 2011 4:00p
/quotes/zigman/5131883/quotes/nls/lnkd Add LNKD to portfolio LNKD LinkedIn Corp. Cl A $ 75.25 -0.02 -0.03% Volume: 1.17mJune 13, 2011 4:03p
John Letzing is a MarketWatch reporter based in San Francisco.
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12th June 2011 at 4:05 pm
Administrator says:
RE
If Facebook is worth $100 billion on their ad revenue, TBP must be worth $56.32 based upon my ad revenue. I can’t wait to take this sucker public.
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12th June 2011 at 4:48 pm
Reverse Engineer says:
Jim, Pukeon LOST money for the last decade and still got an IPO worth $750M. TBP is worth $1B at least. You should call up Goldman and set up an IPO immediately. Get on the Gravy Train while the Hot Money is flowing freely.
RE
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12th June 2011 at 4:58 pm
Muck About says:
And you better move f_a_s_t , JQ or all the gravy (Or is it grave-eeeeeeeeoowwwww!) will be gone down the drain to default land.
MA
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12th June 2011 at 5:14 pm
Administrator says:
I’ll give every TBP member 100 shares prior to the IPO. This is a can’t miss. Just keep checking out the google ads and this will be a can’t miss $200 stock.
Seeking Alpha published this article today. That is the first one they’ve published in the last three months. The best part is that I’m the only author where they do not allow comments on the article because they think I’m too mean to the douchebags who make stupid comments.
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12th June 2011 at 5:20 pm
Mikey says:
@Admin
I’ll buy those shares for a nice silver (Australian) dollar each as soon as you list – as I believe in paying nice people in something that actually has value.
I won’t of course build some sort of script that randomly clicks ads from random IP addresses as that would be highly unethical
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12th June 2011 at 7:37 pm
Max Schmeling says:
Why do you continue to wring your hands and focus on symptoms rather than come up with a solution? The reasons for our financial unraveling are obvious and everyone appears to have a reasonably accurate understanding of it (hindsight being 20/20). Continuing to rehash the obvious is absolutely futile and will not provide any positive results. What is needed is an immediate fix and then a way to prevent the problem from occurring again.
There is only one solution. There is a way to eliminate the global financial loggerhead currently existing while doing the least amount of damage to everyone. Zero-out all debts globally. Period. No exceptions. That would have the effect of freeing up all economies while producing instant, worldwide financial stimulus. Those who are currently holding a large volume of receivables are never going to see them paid anyway because the debt pyramid is too large to ever be paid off. The compounding interest insures that. By zeroing out all debts, new spending is assured by everyone (instantly) and the former lenders will be made whole again with debt that is once again viable. The volume of new purchases will create jobs to put everyone back to work. Everyone wins.
All savvy economists know that the global debt bubble is impossible to ever be paid off. There is not enough equity on earth to ever satisfy all of the debt. So why not everyone share in the losses so we can all share in the recovery? The wealthy will see it all come back around to them again anyway.
Which is better, for all of the world’s economies to sink together just to satisfy a handful of very wealthy individuals, or to let that small handful of individuals suffer a loss (that they will never feel, because their debts would be zeroed-out too) so that the vast majority of people can get back on their feet again? Think about it. But don’t take too long because the bubble is about to explode and the mess it makes will be impossible to clean up.
Our Creator’s Laws provided that all debts were to be forgiven every seven years, meaning that all borrowing had to be based on a seven year payout. While a fee could be charged to anyone borrowing money, compound interest (thievery) was forbidden. Why don’t we quit trying to outsmart the smartest mind that exists?
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12th June 2011 at 11:50 am
John Trainor says:
Usually when a household gets itself into a financial mess, common sense dictates that we trim some expenses and tighten our belts, but our foolish and unwise leaders, the most incompetent in American history, go right on spending like there’s no tomorrow, sending us right over the cliff. George Bush doubled the national debt, Obama is tripling it. We will be bitterly sorry later for not rising up and demanding of our lawmakers a stop to this fiscal insanity while we still had the power to do so.
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12th June 2011 at 7:30 pm
I Must Ignore . . . Ignorance | EleBlog says:
[...] another website, I came across a post on The Burning Platform — “It’s The Debt, Dummy.” Read what’s below and go there, or go there and come back. Here’s what opened my [...]
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12th June 2011 at 5:33 am