Santelli Explains Why A Broke California "Likes" A Hot Facebook IPO

Tyler Durden's picture


The unsurprising and yet depressingly real budget data from California today should shock no-one and CNBC's Rick Santelli provides the most succinct and even more saddening reality check on the situation this morning as he points out the $15.7 billion shortfall and how cuts and compromise will fill that gap. His sane response to the implicit rise in taxation that this compromise realistically requires will mean - happy feet as Californians leave the state. His rant is one of the best but a little later in the day, the problem appears to be on its way to being fixed by none other than the hoody-in-chief himself. According to Bloomberg, Facebook Inc.’s initial public offering likely will account for 20 percent of California’s personal income growth this calendar year, the state fiscal analyst said. The state expects personal income to grow 4.9 percent in 2012. If the Facebook IPO were excluded, that would total 4.0 percent, the agency said. Money paid to company executives, investors and insiders would equal 1 percent of all personal income in 2012, the agency said. So two things come to mind: 1) we sure hope there are more mega-IPOs due next year to fund CALI's shortfall or we may have to pull the 'transitory' or unsustainable card out of the drawer; and 2) how will all those Facebook employees (and the corporation itself) feel when they start facing higher taxes (as Saverin just pre-emptively did?). Will they follow Santelli's happy feet out of the state? In the meantime, it would appear that the Facebook IPO is just the snake-oil medication that everyone needs - how could the IPO go wrong?


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Tue, 05/15/2012 - 13:27 | 2427977 Seasmoke
Seasmoke's picture

unless all the Facebook original shareholders switch their citizenship to Israel

Tue, 05/15/2012 - 13:35 | 2428024 Hippocratic Oaf
Hippocratic Oaf's picture

Only thing I get outta this is that he accidentally draws a penis

Tue, 05/15/2012 - 13:38 | 2428036 battle axe
battle axe's picture

inmates running the asylum....

Tue, 05/15/2012 - 15:49 | 2428657 Yikes
Yikes's picture

Is just me or does anyone question the timing of GM, partly owned by the Obama administration, comes out annouces they're cancelling their advertising on Facebook just two days before IPO and just after it is revealed in the media that one of it's founders is ripping off California, a Obama stronghold of money and unions, of $100's of millions of tax revenue because he renounced his U.S. citizenship.


Tue, 05/15/2012 - 16:58 | 2428944 AldousHuxley
AldousHuxley's picture

that kid will pay taxes as he exits US. No question about that.


But being a Singaporean citizen will shield him from future taxes. Or maybe he is thinking 100 years out to hihs grandkids who will be banking from Singapore investing in China rather than American companies from New York.


No immigrant believes in American Exceptionalism when they come to US and kick everyone's ass.

Tue, 05/15/2012 - 22:49 | 2430092 swamp
swamp's picture

How is one of the co-founders ripping off california, and the usa, by not letting the illegal tax system steal his money to give to themselves and illegals? Good for him. He was smart, rich and he left. Excellent example.

Tue, 05/15/2012 - 20:59 | 2429727 Freddie
Freddie's picture

"If Your Going To San FranPsycho"

Another CA delusional f**k.  Typical crap music from CA.  San Francisco was the only city I almost got mugged in.  I told the MF'er to bring it.

Tue, 05/15/2012 - 21:18 | 2429823 nmewn
nmewn's picture

Govenor Moonbeam "negotiates" with public employees to work 20% fewer days per year in exchange for a FIVE PERCENT reduction in income.

Quote/unquote: "This is the best that I could do."

Gawd I swear...ROTFLMAO!!!

Tue, 05/15/2012 - 13:36 | 2427982 pkea
pkea's picture

santelli don't get it with chicago mentality. ca is hard to replace. happy feet will pay up to stay. where will they go from palo alto? texas? hq maybe but personally, hmmmm, unlikely, they will come back in less than a few days

Tue, 05/15/2012 - 13:39 | 2428041 lemonobrien
lemonobrien's picture

your arrogance is kinda stupid sense i work in high-techs in san francisco. plenty of beautiful places around the world; and fuck yeah; this whole citizenship thing is bullshit; we should be able to roam the earth as free people and live where we like. People will say, but all the poor will invade the nice areas... well, look at illegal immigration in america. plenty of poor cutt'n rich people's lawn, nanny-ing their kids, and providing new and exciting culture like tacos and salsa.

Tue, 05/15/2012 - 13:48 | 2428085 lunaticfringe
lunaticfringe's picture

"sense i work in high techs in san francisco"...I am assuming you are not a technical writer there.

Tue, 05/15/2012 - 14:00 | 2428138 iDealMeat
iDealMeat's picture

energy efficient, web enabled weed whackers are all the rage.


Tue, 05/15/2012 - 16:40 | 2428853 AldousHuxley
AldousHuxley's picture

In chicago and New York, when people get rich quick, they leave the state ASAP for better place to live with lower taxes like Florida or Arizona.


In California, when people get rich off of IPOs, first thing they do is buy a house to settle down. Weather is nice, food is great, illegal immigrants keep maid and lawn services cheap.

Tue, 05/15/2012 - 14:08 | 2428191 lemonobrien
lemonobrien's picture

i speaks in tongues. radiation from fucka shima

Tue, 05/15/2012 - 14:59 | 2428376 A Nanny Moose
A Nanny Moose's picture

psh. You should just be glad it isn't in hex

Wed, 05/16/2012 - 00:59 | 2430420 lemonobrien
lemonobrien's picture


Tue, 05/15/2012 - 15:31 | 2428500 El Oregonian
El Oregonian's picture

"your arrogance is kinda stupid sense i work in high-techs in san francisco"

Uh, Mr. Open-Border Society you can live anywhere you like, it's just if they accept you there or not. Last time I checked they would, if you produced a threshold of income which satisfies resident requirements. They do not want deadbeats anymore than we do...

By the way, love your sentence structure. Great command of the language.

Tue, 05/15/2012 - 17:19 | 2429024 lemonobrien
lemonobrien's picture

yeah, we're slaves.

Tue, 05/15/2012 - 15:44 | 2428615 kalasend
kalasend's picture

I worked at Silicon Valley. Worked outside. And eventually settled back to SV.

Yes, I don't know where I will go later but let me tell you something: SV still has the best balance of hi-tech/$$/life/air/entrepreneural, upbeat, can-do, no-non-sense, etc..

You go anywhere in the world I'm sure you'll find some places that beat SF Bay Area in various sectors but as a whole, I'd say no match. And I'm speaking after having worked at Asia and Europe (okay yeah, minus Aussie land so perhaps that's where I would go next but I suspect I'd still opt to come back after another 3-4 yrs...)

Tue, 05/15/2012 - 16:47 | 2428897 AldousHuxley
AldousHuxley's picture

in SV, startup experience counts and failure is discounted.

everywhere else, nobody cares about your responsibilities in a startup and cares more about brand name company experience. And i you fail, you are ostracized with "I told you so".


pleasant weather also helps to install optimism into people working in risky ventures whereas in Chicago, New york, etc, when stress of startup gets high looking out the window into gloomy snowy weather makes you want to just quit and seek safety of fortune 500.


Only companies moving out are old techs. New cutting edge tech starts in Silicon Valley. Because the elites are entreprenuers and they reinvest the money back into another startup. New york wall streeters grind it out in finance and as soon as they hit their number, they move to Florida and live off of passive investments. Californians actually like working in a startup. they like change. they like solving problems. East Coasters only like parasitic relationships.


For example, look at Elon Musk. He put his profit from paypal back into even larger startups: spaceX, Tesla, SolarCity.

He is young and running these companies. He is not sitting back in Texas ranch somewhere living off of dividends.

Tue, 05/15/2012 - 20:34 | 2429703 Freddie
Freddie's picture

You moron. Elon Musk got Obama money and connections for Tesla and Space X.  Stop generalizing retard.

Tue, 05/15/2012 - 16:57 | 2428949 the 300000000th...
the 300000000th percent's picture

Its nice now but after the debt reaches critical mass it will be a shit zone of unprepared prius driving retards that dont know why their mastercards dont work anymore and the gangbangers will eat you just for fun.

Tue, 05/15/2012 - 17:34 | 2429079 AldousHuxley
AldousHuxley's picture

prius gave you access to HOV lanes.

There is a reason why Hummer was sold off to Chinese righ tas gas prices were going up.

Tesla is going to make Texas go broke who also has fare share illegals and population are retards living off oil wealth. That's why cities like Austin are trying to attract smart techies from California to diversify oil industry with tech industry. Maybe not next 10 years, but in 50 years (and this is important to super elite landowners), China or California will replace all automobiles with electric vehicles.


Gangbangers are people too and most are poor, so they are moving out to Texas, Nevada, Arizona due to cost of living.


California is naturally gifted with geographically diverse land, that's why politicians can afford to be stupid but so is Texas, Alaska, Florida, etc.

Tue, 05/15/2012 - 18:43 | 2429342 eatthebanksters
eatthebanksters's picture

If you're an employee on a fixed salary, that's fine, but if you're and entrepreneur who creates value, California  is anethema.

Tue, 05/15/2012 - 13:44 | 2428055 NotApplicable
NotApplicable's picture

What happens when all the happy feet have gone sad?

Eventually, they're gonna run out of poor people to exploit. When that day comes...

Tue, 05/15/2012 - 13:43 | 2428056 Leopold B. Scotch
Leopold B. Scotch's picture

And they'll all be eating from Trash Cans.

Tue, 05/15/2012 - 16:43 | 2428875 ParkAveFlasher
ParkAveFlasher's picture

They'll go to Long Island City.

/sarc off

Tue, 05/15/2012 - 13:29 | 2427988 Nothing To See Here
Nothing To See Here's picture

Markets don't care about California. They heard a new election was coming in Greece and that it might fix the whole shit.

Tue, 05/15/2012 - 16:54 | 2428927 AldousHuxley
AldousHuxley's picture

Because california is  doing fine and Feds will bailout CA when the time comes because of population (= votes for politicians) unlike ECB/IMF vs. Greece.


Russian billionare bought a $100,000,000 house in California.


When world thinks of American Dream they think of California, not New Jersey, or Chicago. Chicago is done.

Stanford is the choice for new money.


of course, new englanders, wallst. washington DC trust fundies all envy /hate California's new money.


But soon the dream will move across the pacific to China.

Tue, 05/15/2012 - 13:31 | 2427989 BLOTTO
BLOTTO's picture



Zuck: Yeah so if you ever need info about anyone at Harvard

Zuck: Just ask

Zuck: I have over 4,000 emails, pictures, addresses, SN

(Redacted Friend’s Name): What? How’d you manage that one?

Zuck: People just submitted it.

Zuck: I don’t know why

Zuck: They “trust me”

Zuck: Dumb fucks

Tue, 05/15/2012 - 17:46 | 2429126 AldousHuxley
AldousHuxley's picture

America: where anti-social dork becomes rich off of social networking.

Tue, 05/15/2012 - 13:29 | 2427991 Vincent Vega
Vincent Vega's picture

Send in Corzine; vaporize that debt!

Tue, 05/15/2012 - 13:33 | 2428000 dmger14
dmger14's picture

Always refreshing to hear some sanity and logic from Rick!  I hope California breaks off into the Pacific after a big earthquake.  It would save us non-socialist US citizens a lot of trouble.

Tue, 05/15/2012 - 13:36 | 2428014 Nothing To See Here
Nothing To See Here's picture

"us non-socialist US citizens"

you mean, like the 90% of the country who think they have a valid choice between either Obama or Romney?

Tue, 05/15/2012 - 13:46 | 2428068 smb12321
smb12321's picture

I love Rick!  He is so passionate about things, not a lot of nuance.   CA is the ultimate example of a liberal experiment that was allowed to do whatever it wanted by idiot politicians who increasingly demonized those who provided their income.  The end game is, of course, bankruptcy of both the financial and moral persuasion.

I feel sorry for those who are unable to leave the state. We have new neighbors from Sacramento who said they gained 12% simply by moving to TN. 

Tue, 05/15/2012 - 14:27 | 2428217 Floordawg
Floordawg's picture

I've lived in a few states in the US (currently stuck in NYC). From my experience, as great as the weather is there (SF bay area), it's worth the 12%... anywhere east of the Rockies is an armpit in the summer and an icebox in the winter.

You get what you pay for in this case.

Tue, 05/15/2012 - 14:55 | 2428355 Iwanttoknow
Iwanttoknow's picture

Oh yes,that beautiful state,TN.Full of faithful christain zionists.great culture.

Tue, 05/15/2012 - 15:57 | 2428694 smb12321
smb12321's picture

I have no idea what "Christain [sic] zionists" are but you don't either.  If you really "want to know" (extremely doubtful given your juvenile response) TN has all sorts of folks - Jews, Catholics, Mormons, Buddhists, Hindus, Muslims or even atheists like myself. 

You could visit the Fritz, take in the Predators or Titans, tour the Parthenon or even try Graceland.   The latter is too proletariat for your tastes but boy does it bring in the money which is nice in a state without an income tax (and doing fine).   I live in "god's country" on 1.5 acres, 4,100 sq ft for about 1/5 of what you could buy a shack for in the "great" state of CA.  

Tue, 05/15/2012 - 13:32 | 2428002 Ripped Chunk
Ripped Chunk's picture

I agree it will help but not fix a big chunk of the problem. The exodus of population is a double edged sword: many that are leaving do pay taxes and don't tax public services. Many that left paid no taxes and taxed the shit out of public services.

So it needs to be quantified.

Tue, 05/15/2012 - 13:46 | 2428065 NotApplicable
NotApplicable's picture

That's easy. One Uncle Sugar in DC.

Tue, 05/15/2012 - 13:35 | 2428007 Dr. Engali
Dr. Engali's picture

The problem with the nut cases in California leaving is they migrate to other places and vote in their same insane policies. They need to stay with governor moonbeam.

Tue, 05/15/2012 - 13:44 | 2428066 Roy T
Roy T's picture

After 20+ years in California, a HS friend of mine just told me he is moving to Texas.  He took a nearly similar paying job and is looking forward to paying much less in taxes.

Tue, 05/15/2012 - 13:54 | 2428108 carbonmutant
carbonmutant's picture

Did he check the real estate taxes?

Wed, 05/16/2012 - 08:05 | 2430883 jerry_theking_lawler
jerry_theking_lawler's picture

Tennessee is a better alternative......

Tue, 05/15/2012 - 17:02 | 2428975 AldousHuxley
AldousHuxley's picture

Texas is as broke as California.

Texas has lots of illegal immigrants as California.

No income tax but get ready for one of nation's highest  2.5-3% real estate tax versus California's 1% that you lock in forever due to prop 13.


When gas prices go down after US forces Iraq, Iran, Saudis to pump more out, Texas will be in trouble again.


Democrat presidents for the foreseeable future will benefit California more than red state like Texas.


Trick to California living is to have your wife work for California government to get your taxes back.



Tue, 05/15/2012 - 18:46 | 2429354 Vendetta
Vendetta's picture

Mitt Romney bought a place in CA.  I don't see much difference between R's and D's except the general tone of the nonsense and lies they utter.

Tue, 05/15/2012 - 18:49 | 2429358 eatthebanksters
eatthebanksters's picture

2.5% to 3% real estate taxes on a $500,000 house is $12,500 to $15,000/year...The same ouse in California would be $1.3 to $1.5m?  Taxes (state  and local assements) average 1.16% the first year in California..I'd say its all even, except that you have no sate income tax in Texas.

Tue, 05/15/2012 - 13:53 | 2428109 Arnold Ziffel
Arnold Ziffel's picture

Facebook's Saverin is not only leaving Califoirnia, he is leaving the whole country!

Tue, 05/15/2012 - 14:26 | 2428260 GeezerGeek
GeezerGeek's picture

South Florida has lots of immigrants from socialist paradises like Venezuela. They say they are fleeing Chavez and then support the American socialists who promise paternalistic government. Nice people, but they just don't understand - it's the system, not just the individual at the top, that leads to failure.

Tue, 05/15/2012 - 15:54 | 2428671 Cruel Aid
Cruel Aid's picture

@ The Dr.

They are killing us, but the state and local politicians love the jacked up property tax and sales revenue. Carpetbaggers are a nightmare.

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