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14 Crazy Facts About The Current Internet Stock Bubble

Tyler Durden's picture




 

Submitted by Michael Snyder of The Economic Collapse blog,

Shouldn't Internet companies actually "make a profit" at some point before being considered worth billions of dollars?  A lot of investors laugh when they look back at the foolishness of the "Dotcom bubble" of the late 1990s, but the tech bubble that is inflating right in front of our eyes today is actually far worse. 

For example, what would you say if I told you that a seven-year-old company that has a long history of not being profitable and that actually lost 64 million dollars last quarter is worth more than 13 billion dollars

You would probably say that I was insane, but the company that I have just described is Twitter and Wall Street is going crazy for it right now.  Please don't get me wrong - I actually love Twitter.  On my Twitter account I have sent out thousands of "tweets".  Twitter is a lot of fun, and it has had a huge impact on the entire planet.  But is it worth 13 billion dollars?  Of course not.

When it comes to the Internet, what is hot today will probably not be hot tomorrow.

Do you remember MySpace?

At one time, MySpace was considered to be the undisputed king of social media.  But then something better came along (Facebook) and killed it.

It is important to keep in mind that Facebook did not even exist ten years ago.  Yes, almost everybody is using it today, but will everybody still be using it a decade from now?

Maybe.

But the way that the financial markets are valuing these firms can only be justified if they are going to make absolutely massive profits for many decades to come.

Will Twitter eventually make a little bit of money?

Probably, as long as they get their act together.

In fact, Twitter should be making significant amounts of money right now if it was being run correctly.

But will Twitter ever make 13 billion dollars?

No, that simply is not going to happen.  But that is what Wall Street says that Twitter is worth.

The utter foolishness that we are witnessing on Wall Street right now is so similar to what we saw back in the late 1990s.  It is almost as if we have learned nothing from our past mistakes.

These days I keep having flashbacks of the Pets.com sock puppet.  For those too young to remember, the following is a brief summary from Investopedia about what happened to Pets.com...

It's impossible to think of the first Internet era without thinking of the Pets.com sock puppet. He was everywhere and was nearly as well-known as the Geico gecko is today.

 

That familiarity, in part, persuaded many investors to lay down money in the company's February 2000 IPO (which was backed by Amazon.com). Pets.com raised $82.5 million – but nine months later it folded, due to major recurring losses. Part of the reason for that was aggressive advertising, but the company also lost money on virtually every item it sold. In the third quarter of 2000, Pets.com reported negative gross margins of $277,000. (The second quarter had seen a $1.7 million margin loss.) That same quarter (its last full quarter as an operating entity), the company lost $21.7 million on $9.4 million in revenue.

 

As for the puppet, he went on to shill for BarNone, which helps people with bad credit histories get car loans. He's still there today, front and center on that website.

Everyone loves to laugh at the poor little sock puppet, but the truth is that the tech bubble that is inflating right now is far worse than the Dotcom bubble of the late 1990s.  The following are 14 facts about the current tech bubble that will blow your mind...

#1 In just a few days, the Twitter IPO is expected to raise close to 2 billion dollars even though Twitter actually lost 64.6 million dollars last quarter and has a long history of not being profitable.

#2 It is being projected that after the IPO Twitter could have a market valuation of more than 13 billion dollars.

#3 Twitter is not expected to make a profit until 2015 at the earliest.

#4 According to CNBC, Pinterest is currently valued at 3.8 billion dollars even though it has never earned a profit.

#5 Yahoo paid more than a billion dollars for Tumblr even though Tumblr's revenues are so small that Yahoo is not even required to report them on financial statements.

#6 Snapchat, an Internet service that allows people to send out messages that "self-destruct", is supposedly worth 4 billion dollars.  But it actually has zero revenue coming in, and many believe that it is essentially worthless as a money making enterprise.  For one extensive analysis by a tech blogger, please see this article.

#7 The stock of Rocket Fuel, an online advertising company, is trading at about 60 dollars a share and it has a market valuation of about 2 billion dollars even though it has never made a profit.

#8 The stock of local business review website Yelp is up 241 percent this year even though it has never earned a quarterly profit.

#9 Fab.com just raised 165 million dollars from investors even though it recently laid off 44o employees.

#10 LinkedIn stock has risen in price by 136 percent since the 2011 IPO, and it is now supposedly worth more than 18 billion dollars.

#11 The head of engineering at Twitter, Chris Fry, got a 10.3 million dollar pay package when he joined Twitter last year.

#12 Facebook's VP of engineering, Mike Schroepfer, earned 24.4 million dollars in 2011.

#13 Office rents in San Francisco (where many of these tech companies are based) are now 23 percent higher than they were at the peak of the real estate market in 2008.

#14 Facebook stock is up close to 140 percent over the past 12 months and the company is now worth more than 120 billion dollars.

And I am certainly not the only one that is concerned that we are repeating the mistakes of the late 1990s...

“When you look at valuations and look at the lack of earnings and revenue, it seems to me much like the dot-com bubble,” said Matt McCormick, a money manager at Cincinnati-based Bahl & Gaynor Inc. who helps oversee $10.2 billion. “This market looks a little frothy and Twitter is the personification of a risky trade.”

In fact, as the Wall Street Journal recently noted, we have seen some of these tech stocks crash more than once during the Internet age...

"It's fascinating to me that today's mini-mania includes shares of Amazon, Netflix and Priceline that have previously peaked and crashed before—in some cases they've peaked and crashed twice before," says Darren Pollock, portfolio manager at Cheviot Value Management. "Stocks like these have again captured the imagination of speculators. We're skeptical that there is enough underlying intrinsic value to many of the highfliers to support today's prices."

So how long will it be until the current tech bubble implodes?

 

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Wed, 11/06/2013 - 21:50 | 4129357 ebworthen
ebworthen's picture

My friend Larry Kudlow is still delusional that the markets are not based on FED QE and bailouts but "fundamentals".

Funny Larry, but I'm pretty sure Ronald Reagan wanted some semblance of the rule-of-law and productive employment.

If not him, I'm sure that the Founding Fathers and my Ancestors did when they scrabbled a living out of the Colonies and the Old West.

Wed, 11/06/2013 - 21:56 | 4129374 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Why earn an honest living when you can just push fraud. Welcome to 21st Century America!

Wed, 11/06/2013 - 22:26 | 4129458 AlaricBalth
AlaricBalth's picture

"Twitter is a lot of fun..."
No Mike. Tending a garden and seeing the fruits of that attention come to fruition it fun. Playing with my kids is fun. Hanging out with good friends is fun. Sex is fun.
Twitter is a distraction.

Wed, 11/06/2013 - 23:16 | 4129566 Manthong
Manthong's picture

If I am correct, twitter is an investment in the sprurious and short attention span of modern sheep.

It could be a winner.

Thu, 11/07/2013 - 06:00 | 4130073 Truthseeker2
Truthseeker2's picture

```

 "All of us have seen bubble after bubble grow and balloon, and merge and overlap, and inextricably interpenetrate each other, until all we have is one massive bubble ready to pop.  But, when will it pop?!

It will pop when the confidence level is sufficiently undermined by the very same MEDIAthat controls the flow of the relevant information.   And who, pray tell, controls the media, if not ‘The Invisible Hand'?"

.
http://cosmicconvergence.org/?p=2019

Special Message to the Market Oracles and Money Masters of the Universe

***

Wed, 11/06/2013 - 23:31 | 4129632 401K of Dooom
401K of Dooom's picture

Thank you AlaricBath!  You hit the nail on the head!  I could not have said ti better myself!

Thu, 11/07/2013 - 00:32 | 4129750 ihedgemyhedges
ihedgemyhedges's picture

"Sex is fun." Yes I agree. Please email my wife and let her know this. Her email address is....

Thu, 11/07/2013 - 03:51 | 4129979 Fuh Querada
Fuh Querada's picture

Shrink : Do you converse with your wife after intercourse?
Patient: Only if her mobile is turned on.
Shrink: Does your wife smoke after intercourse?
Patient: Never looked.

Wed, 11/06/2013 - 21:58 | 4129375 Chris Jusset
Chris Jusset's picture

You know the stock market is in a bubble when US Equities are inverted, such that "the expectation of continued monetary accommodation has trumped economic fundamentals to become the main factor determining the near-term outlook for U.S. equities."  A negative correlation indicates that weak U.S. economic data tends to push equity prices higher, while strong economic data tends to send them lower.

http://www.zerohedge.com/news/2013-11-06/chart-day-bernanke-has-official...

Thu, 11/07/2013 - 01:15 | 4129821 phaesed
phaesed's picture

And I'm pretty sure Reagan was one of the biggest sell outs to the military industrial complex that our nation has seen.

Thu, 11/07/2013 - 08:47 | 4130220 Nothing but the...
Nothing but the truth.'s picture

Stupidity like this will prevail when people have more printed money around them , than any brainpower to match.

Wed, 11/06/2013 - 21:55 | 4129372 Seasmoke
Seasmoke's picture

I never thought I would live long enough to see another INTERNET STOCK BUBBLE. 

 

either I am a vampire or this is one fucked up market. 

Wed, 11/06/2013 - 22:20 | 4129432 lewy14
lewy14's picture

So, brave soul that I am, let me make the case as to why this time might be different.

- in the first internet bubble, the monetization of eyeballs was a conjecture, a dream - just a story. These days the monetization of eyeballs is more of a science thanks to Big Data analytics. Yes, there is a lot of hype around Big Data, but some reality too. I base this on many first hand accounts from several practitioners and going through the math and technology stacks and business models myself. Bottom line is that value placed on eyeballs is much less of a story and more empirically validated. Twitter can make money through a lot of different mechanisms; they just need to pay attention to my second point:

- the industry learned an important lesson from MySpace. The lesson is simply don't suck - and then you won't lose your network effect. As long as Twitter simply does not suck it won't lose out.

Unforced suckage errors have largely been eliminated by advances in UI/UX and the acceptance of those fields as first class participants in the development process. Also the adoption of DevOps which can iterate changes quickly without bringing down the house. Finally A/B testing guards against suckage surprises and makes a science out of previously aesthetic and conviction driven feature and UI design.

The biggest suckage risk to FB and twitter is over-agressive monetization. Zuckerberg's latest comments seem to show he understands this quite well. Twitter would have been in error to monetize more aggressively prior to now, and they very much understand they have to go easy. 

Do I personally buy any of this? No, as measured by the fact that I won't part with one thin dime based on this gibberish I just wrote. Just trying to lay out the best case I can (before I reject it anyway). But if Twitter and others in its cohort ends up valuable, it may be for the reasons I just gave.

Wed, 11/06/2013 - 23:00 | 4129544 NidStyles
NidStyles's picture

It makes sense, so it's likely correct.

 

Wed, 11/06/2013 - 23:38 | 4129651 Imminent Crucible
Imminent Crucible's picture

I don't personally buy any of it, either, lewy14.  Not because those are bad arguments, but because of two principles.  The first is, if you have to pull together nine reasons why your case is strong, it's weak.  If something is bound to happen, it's going to be because of ONE primary driver, not seven or nine or eleven.

The other is that Twitter (along with the rest of the social media junk) is essentially a fad that adds very little value but a lot of time-suck.  It creates the illusion of a big network of friends and family.  When you're there, you feel almost like you're "at home".  But it's only a feeling.

I think it was Robert Frost that said, "Home is the place where, when you have to go there, they have to take you in."   Let's see if Jimmy Kimmel moves in with Kanye West when his career goes south. Or vice versa.

Thu, 11/07/2013 - 00:08 | 4129709 lewy14
lewy14's picture

Agreed.

Social media is a time suck.

(I say as I compulsively check for the third time in ten minutes to see if someone commented on my comment).

Thu, 11/07/2013 - 09:49 | 4130447 Acet
Acet's picture

Also from inside the technology side of things I can confirm that techology is not developed in an better, more methodical or more controlled way than during the last boom and that the disconnect between the needs of users and what actually is implemented is no smaller than before.

In my experience, the kinds of skills (mostly business analysis and technical analysis) that are used to bridge the gap between those creating technology and those using it are just as rare as they've ever been and most of the few pratictioners out there don't understand enough of one side or the other.

In addition to this, fast growing startups remain some of the most disorganised, ad-hoc, improvisational development environments out there (this is not a good thing).

 

Whoever is doing the argument that fast iteration cycles (i.e. Agile Development) and working with UI/UX professionals to reduce suckage justifies .Net boom valuations is full of shit and is probably selling his or her book.

 

Thu, 11/07/2013 - 19:48 | 4132656 lewy14
lewy14's picture

Acet, I believe we established on another thread that our experiences in our respective locales have been different.

London is a different world. (I do like the financial tech and follow Martin Thompson's blog.)

 The quality of the work I'm privy to locally is outstanding. 

Mistakes are made, to be sure - but they tend to be made faster, corrected faster, and are shallower. "Pivot".

Talking book? Not so much; I don't own any eyeball plays in either the public or private market. I'm more interested in b2b saas companies with promising traction / revenue.

Of course there is still a bunch of fail; I was making the case that there are reasons to support a "millions of eyeballs" valuation that didn't exist in 1999. If you think I'm full of shit, well, I agree with you. (In that I'm sure not convincint myself to buy any twitter.)

Disorganized? Ad hoc? Improv? Sigh. You're making me nostalgic. I did my best work in those environments. Some in startups, some in BigCos. The ordered, methodical teams were stifling. Pretty sure you would have hated me as a co-worker. ;) But all the best to you.

 

Thu, 11/07/2013 - 00:47 | 4129779 dark pools of soros
dark pools of soros's picture

That's why Netflix was an actual winner..  they provide serious value and disrupted monopolies..  sure they have a target but their move to make their own content was swift correct to the dumb splitups they shot themsleves for the earlier crash

 

disclosure..  i had it early from 45 and sold at 50 ....  yeh me, watta gain

 

Thu, 11/07/2013 - 01:15 | 4129819 Nobody For President
Nobody For President's picture

either I am a vampire or this is one fucked up market. 

 

Oh hell seasmoke, why not both?

Wed, 11/06/2013 - 21:55 | 4129373 SillySalesmanQu...
SillySalesmanQuestion's picture

The Twitter bird stuck full of arrows is hysterical! If only Rick Santelli would tack that sucker on his dry board tommorrow morning, right before the market opens...  :)

Wed, 11/06/2013 - 22:04 | 4129400 Seer
Seer's picture

Sadly, it's the canary's canary...

We're running full bore, on fumes...

Wed, 11/06/2013 - 21:59 | 4129381 Hughing
Hughing's picture

This bubble is to be made permanent; so horribly catastrophic will its collapse be that everything and anything will be done to prevent it.

Wed, 11/06/2013 - 22:22 | 4129437 Marco
Marco's picture

Haha, no ... the collapse will actually perpetuate the status quo ... once the US stops being able to sucker foreign countries into buying into it's bubbles, then we will have the catastrophic collapse.

I thought after the mortgage crisis this would be the one, but apparently I underestimated the willingness of pension and sovereign wealth fund managers to sell their beneficiairies down the river yet again.

Wed, 11/06/2013 - 22:00 | 4129382 Icewater Enema
Icewater Enema's picture

"It's impossible to think of the first Internet era without thinking of the Pets.com sock puppet. He was everywhere and was nearly as well-known as the Geico gecko is today..."

"...but the company also lost money on virtually every item it sold."

And in the last days, as I recall, the sock puppet was their best-selling item. Should have charged more.

 

Wed, 11/06/2013 - 22:08 | 4129404 Seer
Seer's picture

It just keeps getting worse... but quite frankly, how can one go "one better" than selling stock in something that neither sells or makes anything?  At least pets.com sold actuall stuff!

And as much as I dislike Microsoft I'd have to say that I long for the days in which the markets were composed of companies of such that actually made stuff...

This really ain't going to turn out well...

Wed, 11/06/2013 - 22:03 | 4129397 stant
stant's picture

big meany .com

Wed, 11/06/2013 - 23:32 | 4129636 401K of Dooom
401K of Dooom's picture

No, you want to say Big, Blue Meany.com!

Wed, 11/06/2013 - 22:04 | 4129399 Bay of Pigs
Bay of Pigs's picture

Not sure Im buying into everything this guy Snyder writes. His sources are dubious at times. I checked on the one about the NW and Hawaii being "fried with radiation".

 

That is utter bullshit.

Wed, 11/06/2013 - 22:09 | 4129409 Seer
Seer's picture

So, you're saying that Twitter is a buy?  Don't be shy, tell us, hanging on the edge, whether we should invest or not.

Wed, 11/06/2013 - 22:14 | 4129422 Bay of Pigs
Bay of Pigs's picture

I wouldn't buy it, but I said that about FarceBerg too. 

I'm sure plenty of people here will try to scalp a bucks on it though.

Wed, 11/06/2013 - 22:07 | 4129403 Icewater Enema
Icewater Enema's picture

Actually, this isn't funny. I am working with a guy who is trying to raise money for a startup with a new technology for diagnostic cardiology. Seems very promising. However, in these pitch sessions where he is up against the social websites, he is having trouble getting traction. Investors want immediate return on investment and 5 guys can bang out a website in a month. Investors are telling him that waiting 12-18 months for FDA clearance and market release is "way too long." Apparently, your senior class project, if it can be flipped quickly enough, is once again more fashionable than a real product. It is indeed a fucked up market.

Wed, 11/06/2013 - 22:11 | 4129414 Seer
Seer's picture

And maybe investors realize that folks won't be able to afford medical shit?

Wed, 11/06/2013 - 22:21 | 4129435 Icewater Enema
Icewater Enema's picture

More like they realize that this manic market can't last much longer. Get in, sell it or go public, and cash out ASAP before it all goes south. In the 90's, and early 2000's, 5 years was typical to get a startup product cleared and into the market-even longer sometimes. Now a year is too long, because the turnaround on this interweb shit is just too fast to ignore. Everyone wants to be Mark Cuban.

Thu, 11/07/2013 - 00:48 | 4129781 dark pools of soros
dark pools of soros's picture

I can haz billion and basketball team??

Wed, 11/06/2013 - 22:24 | 4129447 lewy14
lewy14's picture

No, investors are being told (all but in-your-face explicitly) that med tech is an insiders game and that the FDA will fuck capriciously with anyone who is not an insider.

This I know.

Thu, 11/07/2013 - 00:50 | 4129785 dark pools of soros
dark pools of soros's picture

no doubt..  that is like MIC shit..  they know that money is constant from taxes supporting those fields so you have to bully your way inside the club

 

 

Thu, 11/07/2013 - 00:40 | 4129769 hamstercheese
hamstercheese's picture

Medical shit..? Someone actually sells stool samples?

Fri, 11/08/2013 - 20:40 | 4137322 813kml
813kml's picture

But of course, please browse the stool selections on our new website "Shitter".  We are #1 (not #2) in our niche and set to IPO next week.  But get in early, this wealth doesn't trickle down...

Wed, 11/06/2013 - 23:34 | 4129638 401K of Dooom
401K of Dooom's picture

Just wait until all medicine is banned by Obamacare.  Then you can make a killing with Black-Market medicine.  This what the Democrats want in America.

Thu, 11/07/2013 - 04:43 | 4130030 pitz
pitz's picture

Yup, capital is very tight for real businesses.  Even in the tech sector, these firms are very small on a relative basis, yet they're receiving most of the valuation. 

Thu, 11/07/2013 - 09:59 | 4130507 Acet
Acet's picture

I'm inside the Startup world in London and my impression is that at the moment, especially on the funding front, it's all about salesmanship and having a company wrapped around a single idea in a nice package that can be sold on to some suckers via an IPO or a takeover.

Long term viability, long term growth potential or even just expanding beyond the market the company is targetting in the beginning are unimportant: essentially anything that makes a company a long term going concern is unimportant.

Today's "Tech Startup" recipe for almost everything you see out there is:

- Wrap a corporate shell around a single product which in turn is wrapped around a markettable concept

- Market the shit out of it to get eyeballs

- Sell the whole package before its Best Before Date.

 

Wed, 11/06/2013 - 22:10 | 4129405 Caviar Emptor
Caviar Emptor's picture

The internet has become the opiate of the masses. Porn addictions, ADD and OCD from checking smartphones and escaping reality every 20 seconds, false "friends" on FB... It's a plutocrat's and an oligarch's wet dream
Oh and it's a great propaganda platform and spying medium. Orwell woulda smiled

Wed, 11/06/2013 - 22:09 | 4129407 JustObserving
JustObserving's picture

It is being projected that after the IPO Twitter could have a market valuation of more than 13 billion dollars.

Sorry, you are off by a few billion:

The $26 price values the microblogging service at $18.34 billion, on a fully diluted basis. That is 16 to 17 times forecast 2014 sales, a premium to rivals including Facebook, LinkedIn and Yelp, according to some analysts.

http://www.usatoday.com/story/tech/2013/11/06/twitter-ipo-pricing/3447747/

Wed, 11/06/2013 - 22:22 | 4129441 One eyed man
One eyed man's picture

USA Today ran a story about confidential internal projections that Twitter MIGHT make $200M in 2015. That would give it a PE of 85 if the $17B valuation holds. That's clearly a bubble valuation (if everything goes really well).

With FB I could somewhat see how people might be tempted to buy it because even though I don't use FB myself, some of my friends say their wives spend hours on it. But I don't know personally know anyone who uses Twitter.

Thu, 11/07/2013 - 14:19 | 4131768 MarsInScorpio
MarsInScorpio's picture

What is its market value when shares are sselling at $44 - $46?

So, is he still off by ka "few billion," or is your analysis off due to using the incorrect value of a share?

-30-

Wed, 11/06/2013 - 22:12 | 4129416 jim249
jim249's picture

Now Amazon, that can't be a bubble.

Wed, 11/06/2013 - 22:16 | 4129424 Marco
Marco's picture

There's not enough suckers in yet, need to convince more non-US retail investors out of money and into the stock market (lots of advertisiment for stock funds and brokers on the radio here at the moment).

I say non-US because of course stock market bubbles are the main way for the US to keep it's trade deficit going (they repatriate massive amounts of dollars). The rest of the world has been falling for it over and over and over and over again ...

Wed, 11/06/2013 - 22:22 | 4129438 Bosch
Bosch's picture

Obviously this is a naive question, but: 

How the fuck does Twitter even spend $64.6 million dollars last quarter let alone lose $64.6 million?  What does it take to run Twitter?  Seems like something 2 guys in an apartment with a T1 line could run on their own. 

Thu, 11/07/2013 - 04:47 | 4130031 pitz
pitz's picture

Extremely bloated software.  I've heard stories, its horrifically bad.  Most of the social media and even search engines aren't hiring people for their tech skills, that's for sure.  The employment situation with those companies is more of a glee club, than a meritocracy. 

Wed, 11/06/2013 - 22:51 | 4129516 williambanzai7
williambanzai7's picture

SOCIAL MEDIA CONFIDENTIAL

Wed, 11/06/2013 - 23:55 | 4129687 jon dough
jon dough's picture

Nice rack...what can be seen of it.

Always a treat, WB7, thank you, it hits the style square and true.

Thu, 11/07/2013 - 14:24 | 4131783 MarsInScorpio
MarsInScorpio's picture

WB7 - -

 

Since you are good at this, here is an idea for you - if you are opposed to Hillary being president:

 

Hillary - the Orwellian Joker-noire

IF YOU ARE A CREATIVE WEB OR VIDEO ARTIST, OR KNOW ONE, PLEASE READ THIS CREATIVE IDEA AND THINK ABOUT DOING IT:

The Hillary face on the button entitled "Ready" that her PAC is selling is almost a caricature of the Joker. Some minor touching up, and you'd have it.

In addition, the lack of background makes it perfect to use in the 1984 scene from the Apple Super Bowl commercial with the face up on the screen.

Creative idea: I don't do this professionally, or I would: 1) Crate the Joker take-off on her face; 2) Do a merge of the Obama Joker face merging into hers, communicating that this is really just one Joker followed by another; 3) Place her face on the screen that everyone is looking at in the "1984" Apple Super Bowl commercial;

If you are good at video, then 4) Create a YouTube video of the transforming Obama to Hillary Joker face in motion; 5) Take that segment of the "1984" Apple Super Bowl commercial with all the people walking in, and put her up as the face on the screen - of course, post it to YouTube.

Now, send the links to either the art or the video, or both to every on-line news outlet you can think of - might as well start here, or with The Hill, since they are the ones who posted the t-shirt that will be the jump-off point for this idea.

If you are a graphics, or video artist, never forget the great publicity those who did up the Joker of Obama received - it is still viral to this day.

And don't forget the impact your art and video will make in putting Hillary into her proper perspective - an Orwellian Joker-noire.

If you don't do this type of art work yourself, please copy and paste this in an email to everyone you know who does do it.

To find the picture I referenced, go to the web site readyforhillary, then go to / shop now / scroll down to the bottom of the page.

Please help us find someone to do the artwork - ridicule is amazingly effective.

Please take this creative suggestion seriously, and start Hillary’s campaign off as the Orwellian Joker-noire that it really is.
-30-

Wed, 11/06/2013 - 22:54 | 4129527 pragmatic hobo
pragmatic hobo's picture

ha ha ha ... facebook is a $120 billion dollar company!

Wed, 11/06/2013 - 23:18 | 4129595 Groundhog Day
Groundhog Day's picture

I must of asked over 300 people by now if they have ever clicked on a Facebook ad. Not a single person. Who is dumb enough to spend money on advertising there

Thu, 11/07/2013 - 03:00 | 4129926 pitz
pitz's picture

I've yet to find a friend of mine who has clicked on a Google ad. 

Wed, 11/06/2013 - 23:17 | 4129592 mademesmile
mademesmile's picture

Not even joking - this just showed up in my inbox from share builder. Title..

"It’s hatching…the Twitter® IPO"

Wed, 11/06/2013 - 23:34 | 4129639 TulsaTime
TulsaTime's picture

Bubbles? In an economy where the only activity is 85billion/month into MBS and other bonds??  That just makes perfect sense.  Finance is, after all, the growth industry of the remaining centuries.  We might run out of rubber, or rivers to pollute, or land to build more strip malls, but we can make pretend money until the end of time.  And nobody can say no when the money man comes around, because everybody has to make more money, not just money or some money, but MORE money.  And thus the birth of the liars market, yes you can make more money with an IPO, and you can make more money if you hedge all those bets, and you can make MORE money with these swaps.  Greed is not just good, it is now required.  Self interest is not enough, you gotta get out there and undermine the other guy so you can have his share too, now that is looking out for your self interest.

 

get outta town, wondering about a new bubble....

 

Wed, 11/06/2013 - 23:59 | 4129693 adr
adr's picture

Here's a crazy fact. I made my company $30million in wholesale revenue last year and retailers close to $100 million. My company is only worth what we sell, since we're a private corporation.

Twitter loses a few hundred million dollars a year, but is somehow worth billions.

So even though I brought $100 million in real revenue, and $60 million in profit, that fact is pretty much worthless because it pales in comparison to the money the underwriters will bring in from the Twitter IPO.

There is your new economy.

Thu, 11/07/2013 - 03:05 | 4129930 pitz
pitz's picture

Well in fairness, you probably didn't make $30M in revenues -- there were a heck of a lot of other individuals involved in doing so, even if you were just the salesman who got to book the sale.

But your point about bullshit businesses that don't make any economic profit and likely aren't to, receiving premium valuations is well taken.

 

Thu, 11/07/2013 - 00:49 | 4129778 kchrisc
kchrisc's picture

I have an idea for a site that will sell pet products directly to the public. We'll have a sock puppet as a mascot and a spokesman/thing. Any takers?! What's few million between friends.

Thu, 11/07/2013 - 01:54 | 4129863 Arthur
Arthur's picture

Okay wise guys.  What is the best play for the average guy to make money betting this latest bubble will eventually pop?

I agree that peopl are nuts but no one want to sell me a long term derivitive that will pay off when the tech bubble goes boom.

 

Thu, 11/07/2013 - 02:14 | 4129888 F-Tipp
F-Tipp's picture

"Make money betting"

Thu, 11/07/2013 - 03:06 | 4129931 pitz
pitz's picture

Just invest in long-term businesses with assets and infrastructure.  With a slant towards the stuff that is cyclically out of favour.  Awesome deals in the gold sector right now, and that's very easy to export to China.

Thu, 11/07/2013 - 03:28 | 4129951 polo007
polo007's picture

http://www.safehaven.com/article/31717/the-ecbs-tough-balancing-act-bubbles-vs-deflation

Today, a small group of central bank chiefs can meet in private and wield unprecedented power over global markets, economies, and wealth distribution. They are held accountable to the ruling politicians that in most cases have no respect for the principle of sound money. Instead, in Europe, the UK, Japan, the US, and elsewhere, central bankers have become intricately linked to monetizing government debts, and financing the expansion of the welfare state. As such, disciplined and independent central banking, a cornerstone to any hope for sound money and credit, has been relegated to the dustbin of history.

Central banking, - ostensibly designed to combat high levels of inflation and promote economic growth, while overseeing the stability of the banking industry, has instead, morphed into technocratic planning boards that are constantly involved in rigging the value of the financial markets. Their principal modus of operandi is to encourage risk taking in the local stock markets, through massive injections of ultra-cheap liquidity. However, the result isn't better economic conditions, but rather the expansion of massive bubbles in various financial markets. In turn, central bankers have widened the wealth gap between the owners of equities, and the rest of the struggling population whose wages are sliding backwards, and is increasingly seeking out assistance through welfare programs.

Historically, the value of the stock market reflected the dynamics of the local economy, and would influence the social mood of the populace. A stock market that is booming would signal an up-and-coming economy that would be followed by increased business investment and the creation of good paying jobs. Rising share prices boost the fortunes of about 10% of households in the country, and triggers a greater propensity to spend for goods and services - otherwise known as the "trickle down" effect. Therefore, keeping a constant vigil on the behavior of the stock market, - has become the raison d'être of central banks.

In earlier times, stocks traded on the local stock exchange used to track or even anticipate the nation's business cycle. But that reliable role as a leading indicator began to seriously break down after the financial crisis of 2008. Since then, because of the hallucinogenic effects of "quantitative easing" (QE), - stock markets are no longer reflections of the health of the local economies or forecasting mechanisms of the business cycles. Instead, they are just slices of ownership in specific companies that are unreliable gauges of anything but the underlying strength of the companies they represent, their dividend payments and buybacks, and the schizophrenic mind-set of the traders who buy and sell the shares.

Thu, 11/07/2013 - 06:19 | 4130078 SimMaker
SimMaker's picture

Report in the UKs Daily Telegraph today:

http://www.telegraph.co.uk/technology/twitter/10430761/Twitters-top-140-users.html

Lists the top 140 "twits". Let me get this right. This is a website where vacuous media drama queens and assorted Hollywood Luvvies, get to preach to kids with no money living in their moms basements? And it makes money how???

I scanned the 140 list, and thankfully, not a single person I look up to or respect is on the list. I geuss the closest thing to a human being on there is the Dalai Lama, but to be honest, I don't give a shit what he says either.

 

 

Thu, 11/07/2013 - 07:52 | 4130144 RabbitChow
RabbitChow's picture

This is the same old bowl of soup warmed over, guys.  Hedge funds went all through the 2000s selling credit default swaps, essentially an insurance contract, against poor performing mortgage bonds.  While nearly all insurance policies are regulated, CDSs are not; and hedgies were selling CDSs to anyone who would buy (and I am guessing at very reasonable prices).  But they were just paper, or worse, elecctronic.  And when eh hedge fun couldn't pay, they went out of business.

This has been almost the entire history of the stock market (and maybe the bond market too).  Sell something worthless, even multiple times, take the money and retire.  The sheep see 'everyone' making money, they put their savings in, spin the wheel, and lost it all.  The account execs and brokers don't care; most are too young right now to remember the last big crash.

Thu, 11/07/2013 - 08:06 | 4130157 GFORCE
GFORCE's picture

There is no efficient market and never will be. The market is driven by fear and greed with no time horizon.

Learn how to make money from it and quit whining.

Thu, 11/07/2013 - 09:07 | 4130275 rustymason
rustymason's picture

I would not be surprised to learn that these overvalued stocks are hiding laundered money, bribes, extortions, usw. It is an old trick, using jewelry, tulips, paintings, and other objets d'art to mask nefarious activity. Hillary Clinton made a killing in cattle futures.

Sat, 11/09/2013 - 07:41 | 4138090 fiatmasochist
fiatmasochist's picture

Deserves more up arrows. Especially considering it is a mechanism to enhance the profits of any 'insiders', muppets need not apply. Would like to hear more insights from you.

Thu, 11/07/2013 - 09:17 | 4130314 LongPAU
LongPAU's picture

It's the empire's decadence phase of decline. This is normal and expected behavior.

Why so srs? 1) Make a better sex toy for the masses, 2) create a dozen new Silk Roads, 3) start an End-of-Days Return-To-Morality movement for the christians at the same time, and 4) profit/chuckle/repeat.

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