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Guest Post: Things That Are More Important Than Facebook

Tyler Durden's picture


Submitted by Finance Addict

Things That Are More Important Than Facebook

The story of Facebook’s disappointing IPO is a gripping tale, and it holds some valuable lessons. But it concerns an event that has already happened.

Forget Facebook — there are far more interesting events in play and that will affect you, if only at the margins. They haven’t happened yet, and they may not happen at all. But if they do, you’d sure as hell better have a plan.

This is the first in a series. I will add to it as frequently as I can over the next day or so, so check back often.

1. The euro will have, at the very least, a near-death experience. 

A currency that was well on its way to attaining global reserve status may now fall apart. It’s not like the sudden collapse of Lehman Brothers — we’ve known this might happen for months. But still — who dares to bet? Worse still is the human misery being caused by a “cure” that any idiot can see is not working to restore Greece’s debt sustainability.

This is uncharted territory. Consider this excerpt from the FT, last November:

Only last week, Nicolas Sarkozy, the French president, said in a national broadcast that a Greek exit would be a “catastrophe” for Europe and the world.


The mood has now shifted dramatically, with Mr Sarkozy and Angela Merkel, the German chancellor, publicly discussing the prospect in public as they heaped pressure on George Papandreou, the Greek prime minister, to back away from his call for a plebiscite on the €130bn bail-out for Athens.

Things have only worsened since then, as talk of a Greek exit grows louder and louder and has even  Don’t take my word for it. Willem Buiter, Chief Economist of Citi, has been consistently ahead of this issue. Speaking in the Netherlands in 2010 he said [my translation]:

“For the next 20 years it will be no fun, whatsoever, to be a Finance Minister. In fact, you wouldn’t wish it on your worst enemy.”

Here’s what he had to say, as reported by Business Insider:

There are many uncertainties, but in our new forecasts we assume that Greece will leave EMU in early 2013, followed by sharp currency devaluation, with a large drop in economic activity in 2013 and a modest rebound further ahead. We believe that sizeable adverse economic and financial contagion to other euro area countries will be unavoidable and this is already happening to an extent. We expect that “Grexit” will be followed by far-reaching policy responses: we forecast the ECB will cut rates to 0.5% and resume its multi-year LTRO programme, a second package for both Portugal and Ireland, some kind of Troika programme for Spain, plus financial market support for Spain’s and Italy’s government bonds. We do not expect an early move to Eurobonds or full fiscal burden sharing. But, if deposit flight from periphery banks escalates, then EU policymakers may agree to a jointly-funded enhanced deposit guarantee scheme (DGS)—which aims to protect deposits against EMU exit and currency denomination as well as bank insolvency—plus a jointly-funded bank recapitalization scheme.

Will Spain really need a bailout, as Buiter thinks? Their banks are in horrible shape. From the New York Times:

As those losses are acknowledged, though, the question then becomes whether Spain can afford to absorb them. The government’s own bank bailout fund is running out of money. In a telling contradiction, Madrid has proposed that the country’s banks lend the government the money to keep the fund going.

NYT puts the pricetag at $264 billion. Investors doubt Spain can afford this. The eurozone can afford it, but they would have to print euros to do so. The market seems to think they will.

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Thu, 05/24/2012 - 13:28 | 2459373 Ahmeexnal
Ahmeexnal's picture

EUROTHANASIA. There is a reason Greece is called HELLas in Greek.

That's HELLas stupid!

Thu, 05/24/2012 - 13:41 | 2459436 SilverTree
SilverTree's picture

feciebook has strong support at $0.00

Thu, 05/24/2012 - 13:44 | 2459457 Ahmeexnal
Ahmeexnal's picture


“5 Day Bank Holiday” To Prepare For Collapse of Euro

Even members of the financial elite are losing patience with the single currency

Paul Joseph Watson
Prison Planet.com
Thursday, May 24, 2012

While the global elite are still clinging to the hope that the euro single currency can survive a Greek exit that now looks inevitable, some members of the financial aristocracy have already given up on the entire eurozone altogether.

In an article for the Financial Times entitled, We must break up the failing euro, former Bilderberg attendee Sir Martin Jacomb concedes that all efforts to rescue the euro have been in vain, calling for “all 17 members to decide at once to revert to national currencies.”

Thu, 05/24/2012 - 13:47 | 2459465 SilverTree
SilverTree's picture

Chinese Plate Spinners



Thu, 05/24/2012 - 13:25 | 2459375 catacl1sm
catacl1sm's picture

Bullets, beans, & bullion, bitchez!

Thu, 05/24/2012 - 13:31 | 2459402 DoChenRollingBearing
DoChenRollingBearing's picture



Yes, we are lucky to have had a LONG time to prepare.  Will we still have more time?  Who can say?  Best to buy bullion, beans and bullets while still available.

Thu, 05/24/2012 - 14:20 | 2459630 prains
prains's picture

bbq's, burgers, bouncy tents are more likely what CNBC will cover while the world economy implodes

Thu, 05/24/2012 - 14:36 | 2459685 DoChenRollingBearing
DoChenRollingBearing's picture

Here's an interesting product from a company that "Rahm" (I think) pointed me to, it takes water from the air, and has a solar power option.  Looks to be a great "off the grid" way to produce water:


Thu, 05/24/2012 - 14:47 | 2459719 preppin.for.the...
preppin.for.the.big.one's picture

For the low, low price of $3,995, you TOO can have a solar-powered pull-water-out-of-your-ass technological marvel!

Pfft.  Buy a couple of 55-gallon barrels suitable for water storage (I found three of them locally for $20), a simple ceramic filter purification system ($40, tops) and collect rain water from your roof.

Or... better yet... dig a good old-fashioned well in your backyard (in my area, only have to go down about 25-30 feet) and buy a hand pump to pull the water up...

And stock up on bulletz, beanz, bootz and beer, bitchez!

Thu, 05/24/2012 - 15:09 | 2459823 LFMayor
LFMayor's picture

why dig?  google up Sand Point (aka Drive Point) wells man.

Thu, 05/24/2012 - 18:16 | 2460491 Bananamerican
Bananamerican's picture

dont forget the Borzit...


Fri, 05/25/2012 - 10:47 | 2462230 Kobe Beef
Kobe Beef's picture

...and batteries. Useful, and great for trade.

Thu, 05/24/2012 - 13:42 | 2459445 GubbermintWorker
GubbermintWorker's picture

Don't forget.......water. Oh, wait, that doesn't fit the "B" theme. Ok, don't forget BEER.

Thu, 05/24/2012 - 14:38 | 2459692 Ahmeexnal
Ahmeexnal's picture

don't forget the BJ's

Thu, 05/24/2012 - 14:23 | 2459576 BlandJoe24
BlandJoe24's picture

Touchy-feely-but realistic note: 

Take out the "bullets" and instead add "buddies".  Going it alone me-versus-all gun-slinging survivalist style is an option, but being part of a cooperative local network of friends/community increases likelihood of quality survival for you and your family many times over.  That is the clear communication i've gotten from reading accounts from war-torn areas or economically devasted areas. 

There are no guarantees, but for most people, optimal strategy may be an artful combination of individualism and community cooperation. 

Thu, 05/24/2012 - 14:28 | 2459660 Blammo
Blammo's picture

To me the word "community"= HURL

Thu, 05/24/2012 - 14:34 | 2459675 knukles
knukles's picture

It takes a Village.

Thu, 05/24/2012 - 14:51 | 2459703 BlandJoe24
BlandJoe24's picture

try substituting: "other humans" :-)   pragmatism may help you overcome your revulsion.  How did food/electricity/water/internet/etc. get to you today?  Other humans.  How about these ZH postings?  Who writes them? Other humans.  And kinda' of a comXXXity, don't you think ;-)  All of us live because we are part of an interdependent web... that is unavoidable.  Sorry that makes you nauseous.  It could make you grateful :-) 

Did you read that extensive account by the guy who survived a seige in the former Yugoslavia?  It turned into a primal, primitive horror, but one of the lessons was that those that worked together/helped each other out were more likely to survive...  Those going alone were much more vulnerable (statistically).

Thu, 05/24/2012 - 15:25 | 2459898 narapoiddyslexia
narapoiddyslexia's picture

And, best of all, other armed humans.

Thu, 05/24/2012 - 16:10 | 2460047 BlandJoe24
BlandJoe24's picture

Even in that case acting in a mutually-supportive team (whether to work things out with the threat or to defend against him) generally raises your chances of survival over going it alone.  As the Yugosalvian guy reported, people trying to defend their homes alone - how many 24 hr. shifts can you do in a row by yourself? - were slaughtered, those that banded together were much more resilient

Thu, 05/24/2012 - 18:22 | 2460511 Bananamerican
Bananamerican's picture


to the "yugosalvian (sic) guy"?

Thu, 05/24/2012 - 13:26 | 2459378 Scalaris
Scalaris's picture

Another tech IPO that I'll be able to short?

Thu, 05/24/2012 - 13:56 | 2459512 bdc63
bdc63's picture

"Things that are more important than Facebook"

Bite your tongue!

Thu, 05/24/2012 - 19:54 | 2460773 Drachma
Drachma's picture

I use YouFace and sometimes get into TubeSpace.

Thu, 05/24/2012 - 13:29 | 2459389 Sophist Economicus
Sophist Economicus's picture

Step 1:   Repartiate all foreign gold holding back to Northern Countries (under threat of dollar foreign reseve dump)

Step 2:   Kick out PIIGS and the frenchies

STep 3:  Revalue physical gold to wipe out Dollar/Euro debt and recap banks and solidify Euro as a reserve currency to buy oil...



Thu, 05/24/2012 - 13:31 | 2459397 Ahmeexnal
Ahmeexnal's picture

Step 4: Play with unicorn, kraken and yeti.

Thu, 05/24/2012 - 13:35 | 2459421 Sophist Economicus
Sophist Economicus's picture

It's the most logical play.  They could all go back to their own currencies - but there would be scale for the Northern coutries to 'stick together'.  


They'd also have first mover advantage on going back to a market tie to gold -- beating the Chinese

Thu, 05/24/2012 - 14:15 | 2459601 jonytk
jonytk's picture

Nononono, unlike the US, the ECB still can lower rates, LTRO, and as last resort print more money!

Thu, 05/24/2012 - 13:33 | 2459411 Shameful
Shameful's picture

Some problems with this theory, so turns out lot of the EU gold is held in London and NYC.  So how will these countries get the gold from London/NYC to Germany?  Particularly since Germany itself seems unable to get it's gold back from the US.

Thu, 05/24/2012 - 13:53 | 2459502 Sophist Economicus
Sophist Economicus's picture

They could threaten to dump their US Dollar foreign reserves and treasuries and/or form an unholy alliance with Russia and China.

It would still create a reset to physical and wipe out dollar debt holdings and reset the Euro.


Thu, 05/24/2012 - 14:13 | 2459535 Shameful
Shameful's picture

Privately sure, publicly not so much.  Drawing attention to "Hey USA/UK has all our gold we are screwed!" does not inspire confidence in a new gold EU/German currency.  Now if you were the US, how would you respond "So you want your gold back so you can dump the dollar and walk...or you will threaten to dump the dollar and walk... Well we have military bases in your country and your gold.  Piss off!"

As to unholy alliance, why on God's green earth would Germany trust Russia/China?  Not saying they should have trusted the US/UK, but that is like saying Guy X molested me, so I will automatically trust Guy Y, he is a molester to but with a different type of mustache.  I think even the most childishly naive geo-political analyst can see that China has no interest in a strong Germany, and I think Russia/Germany still bear scars from their clashes though the past century.

No they won't get their gold back and the idea of a Euro gold currency is a pipe dream.  Look at the demographics of Germany, Europe's powerhouse.  Tell me how they are going to support their current welfare state 20 years into the future with a soft currency, with a hard currency it would certainly lead to cutting of the welfare state, which the masses themselves would resist and from which the political class derives it's power.  Why would Germany want debts reset, it's an asset to them.  Seems the Germans like not having their savings wiped out.

Thu, 05/24/2012 - 14:39 | 2459697 DoChenRollingBearing
DoChenRollingBearing's picture

Good seeing you around Shameful!  I always read your thoughtful posts.  + 1

Thu, 05/24/2012 - 14:07 | 2459557 ThirdWorldDude
ThirdWorldDude's picture

Dude, it's not Iceland you're talking about!

Yours is a nice dream of a problem that can be solved with some effort, but now it's time you wake up...

Thu, 05/24/2012 - 14:39 | 2459696 Ignorance is bliss
Ignorance is bliss's picture

Unfortunately for Europe, all of their Gold is in NY...They would be the bitches at the table.

Thu, 05/24/2012 - 18:27 | 2460533 boogerbently
boogerbently's picture

Concomitant with the EUro plunge will be the USDollar SURGE.

Does gold drop with the dollar rise, as has been the case recently?

Thu, 05/24/2012 - 13:43 | 2459449 Unholy Dalliance
Unholy Dalliance's picture


Perhaps you meant re-fartipate (to break wind for a second or subsequent on a bald person's head).

Or indeed repatriate is a possibility.

Thu, 05/24/2012 - 14:42 | 2459708 debtor of last ...
debtor of last resort's picture

PIIGS and the Frenchies? You mean FUKPIIGS?

Thu, 05/24/2012 - 15:58 | 2459987 headless blogger
headless blogger's picture


PIIGS + Frenchies + Brits = FUKPIIGS

Thu, 05/24/2012 - 13:29 | 2459391 boogerbently
boogerbently's picture

The "unchecked greed" that cause MOST of our problems.

Thu, 05/24/2012 - 13:35 | 2459420 SheepDog-One
SheepDog-One's picture

And the unchecked greed always remains unchecked no matter how many times it all implodes they say 'Oh yes we really learned our lesson this time, no more of that!' and then get right back to piracy on a higher level than before.

Thu, 05/24/2012 - 14:10 | 2459570 Liquid Courage
Liquid Courage's picture

Damn redivimists ... recivadists ... revidamists ... AARRGGHHH! Damn repeat-offenders!

(OK ... just kidding ... it's recidivists)

Golly, you're not suggesting that punishment has some kind of deterrent effect, are you. That's like ... so Stone Age.

Thu, 05/24/2012 - 13:39 | 2459431 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

"that a Greek exit would be a “catastrophe” for Europe and the world."


My understanding is that the world existed before the Euro so why not after its passing?! 

Too bad the Deminati's plan since the 1950's is going to hell in a handbasket.  There is a God afterall!!!!!!!

Thu, 05/24/2012 - 13:30 | 2459396 marketcycles79
marketcycles79's picture

Making money is important no? Not following the herd?

Using roadmaps to predict the most probable outcomes?




Not trading on fear or emotion. Using patterns and cycles developed independently over time.

Thu, 05/24/2012 - 13:47 | 2459467 jonytk
jonytk's picture

You have a plan? don't worry in case of real problems the markets will be misteriously unavailable: JUST LIKE AT THE FACEBOOK IPO.

So there you go it IS related to Facebook! LOL

True story bro.

Thu, 05/24/2012 - 13:33 | 2459398 derek_vineyard
derek_vineyard's picture

Everything is more important than facebook.  This over saturation will hasten the already started demise and open door for new fad/brand.  Social media is just.....entertainment.

Thu, 05/24/2012 - 13:33 | 2459410 SheepDog-One
SheepDog-One's picture

Greece not leaving until 'early 2013' so in other words we have to see this muppet show day after day for almost another year. Sheesh.

Thu, 05/24/2012 - 16:29 | 2460111 machinegear
machinegear's picture

Long ZH Greece articles with squiggly line graphs going in extreme directions to symbolize "bad".

Thu, 05/24/2012 - 16:31 | 2460116 Elwood P Suggins
Elwood P Suggins's picture

You don't have to see one damn bit of it.  You can stop paying attention anytime you want.

Thu, 05/24/2012 - 13:36 | 2459424 BeetleBailey
BeetleBailey's picture

The Euro is toast. Check.

Facebook blows. Check.

Being a finance minister blows. Check.

Anyone associated with a finance minister -- by default - blows. Check.

Check back for more. Check.

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