FACEBOOK TANKS / WHAT REALLY HAPPENED

Now that the over priced Facebook IPO has come and rightfully tanked, let’s take a revealing look beneath the over-hyped illusion of the social-networking website itself ~ but more importantly what its IPO fiasco tells us about a blatantly rigged stock market, where short term greed still overrides fairness, and how we all got Zuckered : Allen L Roland

I’ve never been a big fan or advocate of Facebook although as a columnist I use it as a publishing platform among many other publishing platforms. I was asked by the producers of my monthly radio show ( Truth Talk ) to join in order to broaden their radio exposure ~ but I spend virtually no daily time on Facebook, probably know less than 10% of my so-called “friends” and have never clicked on a Facebook Ad. I’ve also spent 11 years as an Investment banker, some of it on Wall Street, and know how the Wall Street casino really works.

So anyone who is valuing Facebook by its user base is obviously counting "eye balls" that flat out do not exist.  More important...here's some extremely insightful humor, courtesy of the Onion, that sums up the short and long term prospects of Facebook in 60 seconds...

Video:

http://www.realecontv.com/page/10646.html

Photo of Mark Zuckerberg and his overjoyed Facebook insider friends who made Billions on an inflated bubble that rightfully tanked but at least lived up to their slogans of “Move fast and break things” and “Done is better than perfect”.

It's pretty clear now that the Facebook IPO was a fiasco. At an outrageous opening price of $38 dollars a share ~ it was 100 times earnings “among friends.”

Today it closed at approximately $26.00 dollars a share ~ a loss of millions to those who bought it at the opening price and thought it was another google. Before today, the stock has lost almost 30 percent since it started trading at $38 on May 18.

But yesterday it was also revealed that Facebook founder Mark Zuckerberg knew company shares were overpriced before the May 18 initial public offering and allegedly quietly dumped around $1 billion in shares ~ according to TMZ;

“A new lawsuit claims Mark Zuckerberg pulled a billion dollar fast one on Facebook investors," TMZ reports; "The class action lawsuit ~ filed by disgruntled Facebook shareholders ~ claims the 28-year-old CEO had inside info that the stock was grossly overvalued, and he protected his own financial hide by quickly unloading a ton of Facebook stock."
"This is the second time in two weeks a group of FB shareholders have joined together to accuse the mogul of withholding information."
TMZ did not cite any sources or specific financial details.
"The lawsuit claims Zuckerberg and his cronies hid the fact that there was a foundational flaw in the Facebook business model ~ that there was not nearly enough advertising revenue to support a stock valued at $38 a share," TMZ adds.
"The lawsuit claims Morgan Stanley, JPMorgan, and Goldman Sachs ~ all sounded the alarm before the IPO that Facebook was seriously overvalued, but that information was 'selectively disclosed' to only the largest investors."
Read more: http://www.moneynews.com/FinanceNews/Zuckerberg-Facebook-Shares-ipo/2012/06/05/id/441194

Here's one guy ( David Weidner ) who wrote 10 Reasons Not To Buy Facebook Before You Buy It Anyway ~  that got it right before hand and he’s also a user ~ but not a believer ~ who admits he probably would not pay to use it.

Here’s number 7 ~ which now looks prophetic as well as the equally relevant number 10;

7) No parents. “ Facebook, it has been said, is a two-headed company. One head is Mr. Zuckerberg, who builds the products for the users. Cheryl Sandberg, the chief operating officer, is the one responsible for making the money. She's also considered the company's unofficial grown-up, given that she is older than 40 and has worked somewhere other than the college bookstore, even if it was Google. Together, they've built a nontraditional way of doing business. No meetings. Small teams. They have unconventional mottos: "Move fast, break things" is one, and "Done is better than perfect" is another. This could be a business revolution ~ or the start of a food fight in the corporate cafeteria. “
(10) The ceiling. We may already have hit it with Facebook's valuation.
“Consider that Facebook's 88% growth rate last year was something the company acknowledged was "unsustainable." Or that 10% to 15% of revenue comes from Zynga ZNGA and other game companies that use the Facebook platform. Or everything in this list: skeptical advertisers, a young management team about to become amazingly rich, a history of social-network flameouts, deep-pocketed competition and the privacy issue…. It should give an investor pause, right?

5 minute Weidner Video interview:

http://www.realecontv.com/page/10675.html

Right, David ~ but it’s all in a day's work for Wall Street's chummy club of Investment underwriters and crooked auditors who are well versed in making stock market fantasies a reality at everyone else’s expense.

Here’s the glue that holds it all together ~ "Compliant" auditors (i.e. crooks)

Here’s how it works...Francine McKenna ( author of the Auditors ) explains on Capital Account with Lauren Lyster that Facebook’s earnings or future earnings are rightfully suspect with obvious conflicts of interest;

McKenna explains how auditors (in this case, Ernst & Young) literally cook the books and that there is more than enough reason to suspect their accounting methods. She also explains how nobody had really looked under the hood of Facebook and that CEO’s often make up there own matrix to explain away losses. This would certainly apply to a non-gap matrix where management decides and manipulates reported earnings in order to make their fantasy a reality ~ which appears to most certainly be the case with Farcebook (Facebook).

Video: ( watch first 13 minutes )

http://www.realecontv.com/page/10685.html

Lynn Parramore correctly writes on AlterNet what the Facebook fiasco tells us about our rigged Stock market ~ and remember I was part of that scene for over 11 years; “Why does this happen? Well, mostly because the public is playing a rigged insider game known as the stock market. Generally it goes like this: An IPO, especially one that has been hyped more than the Second Coming, makes a load of cash for a select group of inside investors, both those giving up their shares – people like the founders and the venture capitalists -- and the privileged group of banks that are underwriting the stock issue. When the ordinary investor gets to bid for shares on the stock market, the banks hope to get a big boost in the price, and sail away to their yachts with huge gains…. Facebook is scrambling to place the blame for the fumbled IPO on technical glitches at NASDAQ, but it seems that the public is not buying what they’re selling on that one. No, it looks like Zuckerberg and the underwriters were just greedy, trying to hustle as much money as possible, the public be damned.”    See article:  http://www.alternet.org/economy/155587

Matt Taibbi, Rolling Stone, definitively nails it when he writes “ I was on the phone last night with a former hedge fund CEO who was talking about this ~ "Facebook," he said, "is a colossal example of a complete clusterfuck where everybody wins except the ordinary investor." His point was that virtually every week now we see stories like this that hint at a kind of two-tiered market system in which most of the real action takes place inside an unregulated black-box network of connected insiders who don’t disclose their relationships or their interests, while everyone else, i.e. the regular suckers, live in the more tightly-policed world of prospectuses and quarterly reporting and so on.”

See The Facebook IPO Clusterf**k
http://readersupportednews.org/opinion2/279-82/11583-the-facebook-ipo-clusterfk

So there you have it, Facebook tanked and what really happened is the public got Zuckered ~ and get this ~ many of those laughing faces at Farcebook obviously knew it.

Allen L Roland

http://allenlrolandsweblog.blogspot.com/2012/06/facebook-tanks-what-really-happened.html

Freelance Alternative Press Online columnist and psychotherapist Allen L Roland is available for comments, interviews, speaking engagements and private consultations ( allen@allenroland.com ) 

Allen L Roland is a practicing psychotherapist, author and lecturer who also shares a daily political and social commentary on his weblog and website allenroland.com He also guest hosts a monthly national radio show TRUTHTALK on  www.conscioustalk.net

THE VAMPIRES OF WALL STREET / UNREGULATED DERIVATIVE TRADING

It’s time for a stake in the heart of unregulated derivative trading which represents over 150 trillion dollars in the United States alone with most of that risk backed up by the FDIC and ultimately American taxpayers. These unregulated financial vampires are sucking the blood out of Wall Street and leaving America vulnerable to another immense financial collapse: Allen L Roland

There are two ways to be fooled: One is to believe what isn't so; the other is to refuse to believe what is so: Kierkegaard

America is on the edge of an immense moral and financial collapse which is more than evident on Main Street America but still actively hidden and disguised on Wall Street. But behind the smoke and mirrors of a corrupt financial system are the vampires of Wall Street ~ the unregulated Derivative Traders whose feeding frenzy continues unabated and all backed up by the federal Reserve.

Here are some economic figures from 2011 to confirm the ongoing Main Street collapse;

1. A staggering 48 percent of all Americans are either considered to be "low income" or are living in poverty.

2. A Gallup poll from earlier this year found that approximately one out of every five Americans that do have a job consider themselves to be underemployed.

3. Back in 1980, less than 30% of all jobs in the United States were low income jobs. Today, more than 40% of all jobs in the United States are low income jobs.

4. One recent survey found that one out of every three Americans would not be able to make a mortgage or rent payment next month if they suddenly lost their current job.

5. According to a recent study conducted by the BlackRock Investment Institute, the ratio of household debt to personal income in the United States is now 154 percent.

6. As I have written about previously, 19 percent of all American men between the ages of 25 and 34 are now living with their parents.

7. One study found that approximately 41 percent of all working age Americans either have medical bill problems or are currently paying off medical debt.

8. Today, one out of every six elderly Americans lives below the federal poverty line.

9. The U.S. national debt has been increasing by an average of more than 4 billion dollars per day since the beginning of the Obama administration.

10.The retirement crisis in the United States just continues to get worse. According to the Employee Benefit Research Institute, 46 percent of all American workers have less than $10,000 saved for retirement, and 29 percent of all American workers have less than $1,000 saved for retirement.

See full report:

http://www.informationclearinghouse.info/article30013.htm#.Tuw7gzAdmGQ.email

Obviously, Main Street is severely ill and deeply in debt. But Wall Street, on the other hand, is severely infected with the cancer of greed and the primary symptom is unregulated derivative trading.

Watch just the first 15 minutes of the enclosed Capital Account video of an interview with Janet Tavakoli, author of The New Robber Barons, who reveals more about derivative trading in a few minutes than most of the talking heads on the financial newscasts and asks the still pertinent question of why isn’t Jon Corzine in Jail?

Here are some of her other nuggets: The recently passed Jobs Bill is a total sell out to unregulated fraud on Wall Street and that the 600 trillion dollar derivative market is controlled fraud.

‘Video ( First 15 minutes )

http://www.realecontv.com/page/9971.html

Do you ever wonder why it’s possible for the top hedge fund manager in 2011 to make $1,442,308 an hour, while it takes the average American family over 29 years to earn that much? The obvious answer is that they have access to illegal insider information that is inaccessible to the rest of us. See How Hedge Fund Vampires Use Insider Info to Extract Their Dishonest Fortunes. http://www.alternet.org/occupywallst/154719

And who is at the center of this eminent financial Armageddon? The privately owned and secretive Federal Reserve Bank ( the mother of all vampires ) who continues to print money out of thin air and back stops ( via the FDIC ) well over 150 trillion dollars of unregulated derivative bets on bets for the United States ~ which only has a gross domestic product of 15 trillion dollars.

We are obviously in "game over" territory here. According to one new survey, approximately one-third of all Americans are not paying their bills on time at this point while the Federal Reserve is desperately trying to control interest rates. The Fed purchased approximately 61 percent of all government debt issued by the U.S. Treasury Department in 2011~ and this is the only thing that is keeping interest rates in the United States from soaring dramatically

The only question that remains now is when the collapse will take place and how bad it will be.

Watch this 3 minute video of a visibly shocked Progressive Radio Host Thom Hartman try to come to grips with the ticking $150 plus trillion derivative time bombs that are now backed up by the Fed and ultimately you and me as taxpayers.

http://www.realecontv.com/page/5513.html

The needed stake in the heart of the unregulated derivative vampires would be the resurrection of The Glass-Steagall Act, officially known as the Banking Act of 1933, which was a Depression-era reform that separated commercial banking from investment banking (repealed during Clinton administration) whereas an institution could either take deposits or trade securities, but it couldn't do both ~ and most certainly was never considered too big to fail nor could it be bailed out by secret Federal Reserve loans.

There are two times in a man's life when he should not speculate: when he can't afford it, and when he can: Mark Twain.

Allen L Roland

http://allenlrolandsweblog.blogspot.com/2012/04/vampires-of-wall-street-unregulated.html

Allen L Roland is a practicing psychotherapist, author and lecturer who also shares a daily political and social commentary on his weblog and website allenroland.com He also guest hosts a monthly national radio show TRUTHTALK on www.conscioustalk.net

Freelance Alternative Press Online columnist and psychotherapist Allen L Roland is also available for comments, interviews, speaking engagements and private consultations ( allen@allenroland.com )

Wall Street Reform Bill / The Good, The Bad and The Ugly

WALL STREET REFORM BILL / THE GOOD, THE BAD AND THE UGLY



















The so called Wall Street Reform bill passed but it was actually a victory for the Lobbyists, who literally bought the Senate who defanged the House Bill and left America vulnerable to eventually another financial crisis: Allen L Roland

I guess this was all you could expect from an Obama administration who would much rather deal with the corporate owned old boy network in the Senate than the upstart will of the people in the House so here it is ~ the good, the bad and the ugly. The Bill ( The Restoring American Financial Stability Act of 2010, H.R.4173 ) appears to be a feeble attempt to get Wall Street to invest in a productive job-creating economy versus gambling on risky investments ~ by using increased regulation without badly needed incentives.

The Good ~ The bill includes Bernie Sanders' amendment lifting the veil of secrecy at the Federal Reserve.~ in that American people will finally know all of the names of the financial institutions, corporations, and foreign central banks that received over $2 trillion in secret loans and other financial assistance from the Fed ~ but not until after the mid-term elections on December 1st.

The creation of Consumer Financial Protection Bureau is good, but it could have been much, much better. Unfortunately, it will be housed at the Fed and it won't be able to regulate interest rates on credit cards. Right now, over 25% of American credit card holders are paying more than 20% interest on their credit cards.

Huffington Post reports that on the very day the Senate passed Wall Street reform and created a Consumer Financial Protection Bureau, Treasury Sec. Tim Geithner is urging President Obama NOT to appoint the most credible person as its leader ~ Elizabeth Warren.
Warren's credentials are impeccable. She was the one who came up with the idea for the Consumer Financial Protection Bureau ~ which is perhaps the best piece of this bill and obviously a threat to the financially elite.

Elizabeth Warren should be Main Street's voice at the Financial table and the financial elite, led by their lackey, Tim Geithner, are terrified of that prospect ~ and well they should be ! Here's a short video clip of Warren in action quizing a visibly nervous and defensive Geithner about Bank accountability ~ http://www.youtube.com/watch?v=qUZWSi9HL_Y

In short, Warren is perfect for the position and most financial insiders have just assumed she would get it. That's why it's so outrageous that Geithner ~ a longtime Wall Street insider ~ would attempt to sabotage her appointment. Sign our petition to President Obama in support of Elizabeth Warren today. Click here -- then tell your friends.

The Bad ~ The bill does not do enough to stop too big to fail banks from gambling trillions of dollars in risky derivatives and credit default swaps ~ whereas banks will still be able to keep gambling a substantial amount of money in derivatives while having access to the discount window at the Fed as well as deposit insurance protecting them if their risky bets don’t pay off.

The Ugly ~ The bill does not break-up too big to fail banks that nearly drove the entire economy off of a cliff nearly two years ago. Right now, Bank of America, JP Morgan Chase and Wells Fargo are bigger today than they were before the financial crisis. The repeal of the Glass-Steagall Act of 1933, by the Clinton administration in 1998, effectively removed the separation that previously existed between Wall Street investment banks and depository banks which led to the dangerous financial excesses of the Bush years. That ugly reality still exists and could eventually lead to another financial crisis.

Once again, Americans wanted real change with teeth and got token change with lip service ~ which seems to be the ongoing theme of the Obama administration as well as the President himself.

Allen L Roland
http://allenlrolandsweblog.blogspot.com/2010/07/wall-street-reform-bill-good-bad-and.html

This weblog is sustained through donations from people like yourself. Please send check or Money Order to Allen L. Roland, PO Box 1221, Sonoma,CA 95476 Also accept Visa, MasterCard and Discover .

Freelance Alternative Press Online columnist and psychotherapist Allen L Roland is available for comments, interviews, speaking engagements and private consultations ( allen@allenroland.com )

Allen L Roland is a practicing psychotherapist, author and lecturer who also shares a daily political and social commentary on his weblog and website allenroland.com He also guest hosts a monthly national radio show TRUTHTALK on www.conscioustalk.net

Cartoon courtesy of Tom Toles / Washington Post

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