cthree

There is a new tech bubble forming. People will speak of the .social bubble bursting in 201X. It's that X which is hard to nail down.

The markets don't operate in a bubble, they are very complicated. I can tell you the markets will crash again, I might be able to tell you why, I can't tell you when.

I would caution against terms like "The Bernank". They make you sound like you get your investment advice from Fox News commentators.

SlowTeg

For sure.. facebook valued at $40B or whatever the number was? Crazy. Like many free internet companies/sites, they need to find a way to monetize all the users.

I didn't say the markets operate in a bubble, just that bubbles are forming, and that our Fed Chairman, "The Bernank," is particularly fond of them. Two very different things. Picking the top of a bubble beforehand is impossible, for a host of different reasons. It's particularly disconcerting to hear our empty suit president touting the stock market as a clear sign of economic growth.. Just more BS and lies fed to the people, and a grand experiment with the "wealth effect" that will ultimately fail. Arguably though, it's not supposed to "succeed," but rather is just another iteration of "kick the can."

I got the term "The Bernank" from that hilarious youtube clip some time ago, and I have no intention of calling him anything else (he's a clown in my book (or perhaps crook is more accurate), and such the name is fitting). I don't even watch mainstream media..

trainwreck

agreed. there are like 5 new social gaming websites popping up here in SF and the Silicon Valley every week.

cthree

CityVille has 100 million players, figure that one out...

Facebook is the real deal, they have plenty of revenue and lots of ways to monitize. Facebook I'd value about the same as Google as a property. As a business, I can't say because it's not public (yet).

cthree

As for bubbles, I'd send you back to 1849 and beyond... They aren't new.

Cancer isn't new. It has always been there, people just rarely saw it because they never lived long enough and so the didn't have a name for it.

Bubbles aren't new it's just that average folks were never gambling their financial futures in the stock market before because they had pensions and benefits for loyal service. The term was coined in the late 1990's to describe something average people had never seen before, it doesn't mean they didn't exist. Just ask Randolph C. Moneybags III.

Gold Rush Fever.


Thar be gold in them thar hills I tells ya.

Regpaq

he is talking about this video I believe
[media]http://www.youtube.com/watch?v=PTUY16CkS-k [/media]

I hope you're not defending Bernanke here

s.hasan546

idk i think facebook is the next bubble. FB has jumped all the way up to 50 Billion in the past few months and the Goldman is calling it to be worth 80 Billion. I think thats insane. Google has its value because it found a way to be even more profitable besides their search engine. Most investors and the professionals i know are all staying away from it. Shares of FB are selling for crazy prices on Second Market. A friend of mine was invited by goldman to buy in and he declined. I think it wont plummet like Myspace, but it still isn't worth in the $50-$80 Billion range IMO.

s.hasan546

They supposedly only have about $2 Billion in revenue and most of their advertising is generic and isn't anything substantial. An there has already been a few people selling out of FB already like Thomas Heilmann.

SlowTeg

I'd say you just did a helluva job tearing that straw man to shreds, but I don't think you are intentionally twisting what I said, but rather just misunderstood what I said. I NEVER said bubbles were new. They go back a long long time. The textbook example everyone uses is the Tulip bubble in the 17th century.. I know they've been happening since the dawn of man, why? Because bubbles are psychological, simple as that.

What I WAS trying to say however, is that "The Bernank" loves bubbles more than your "average" Central Banker? Why? Because that's his "solution" to preventing deflation. He's just a more extreme example of Greenspin (that's intentionally misspelled fyi).

If you understand anything about our monetary system, it's no different than a balloon, in relation to credit flowing in the system. It's perfectly natural/normal, that during boom periods, people/businesses overlever themselves (take on too much debt), and thus a period of contraction (recessions/depressions) must occur to clear out the insoluble debt in the system, and lower the debt/leverage levels. This is why boom/bust cycles are a MUST.

Now, going back to "The Bernank," if your sole credo is to prevent deflation, how do you do it? By blowing bubbles. The tech bubble could've been surely prevented, but they didn't care. After the tech bubble popped, how did we climb out of the recession so quickly? Debt. Specifically, housing related debt and asset "appreciation." The housing bubble was encouraged by Greenspin and his minion "The Bernank." In order to prevent deflation this time around after the "financial crisis," they printed money and encouraged everything and everyone to stick it in equities. A grand experiment to test the "wealth effect." When will it pop? Who knows, but it most certainly will, same for the bond market (although perhaps we'll have QE99 in 2050 going strong to keep bond prices inflated forever). Of course, that money has gone into everything (soft/hard commodities included), and is a very large part of why soft commodity indices are hitting new highs. Bubbles are everywhere these days, and thus that's why I said "The Bernank" loves bubbles.

The only way to prevent deflation is to blow an even larger bubble than the last one. Of course, it must be in a different asset class as the previous bubble, when the previous bubble eventually pops. The last bubble to pop is of course the currency..

Edit: Added last paragraph.

SlowTeg

If it's really anything close to $2B in revenue, a market cap of $40B+ is insane, but bagholders love a good growth story.

A thinking person would wonder though why they took large investments from outside firms if they're quite profitable now. Hmm.. I think of facebook as a much better say youtube site. Youtube was bought for what $1.5B for google, but google has said they've been losing money on it for a while. I'd personally love to hear how facebook has "plenty of revenue," as there have been articles that say it's terrible for advertisers. If they start charging people $5/year, you can count on a lot of eyeballs finding a new e-home.