Facebook Could Spawn Thousands of Milionaires

Hugh Pickens writes "Retuers reports that the world's No. 1 online social network is preparing for a blockbuster initial public offering that could create thousands of millionaires as Facebook employees past and present begin hatching plans on how to spend their anticipated new wealth. 'There's been discussions of sort of bucket list ideas that people are putting together of things they always wanted to do and now we'll be able to do it,' says one former employee who expects his shares to be worth $50 million and is planning to book a trip to space with Virgin Galactic that would cost $200,000 or more. 'It's been a childhood dream.' Another group of Facebook workers has begun laying the groundwork for its own jungle expedition to excavate a relatively untouched site of Mayan ruins in Mexico that sounds like Raiders of the Lost Ark. But for many of Facebook's staffers, the IPO will provide the means to pay off school loans and buy a house or new car and many homeowners and real-estate agents are eagerly anticipating a surge of new buyers that could push prime real estate to new heights. 'If a Facebook guy buys a house and wants to remodel it, maybe the contractor will buy another car,' says Buff Giurlani. 'Maybe the realtor will put a car in. There's a trickle-down effect.'"

Comments

Re:Trickle down

[roman_mir]

Yeah - that's while all the .com companies are doing so well, they produced something.

- no, the .com bubble was spawned by the federal reserve, the culprit of the time was Greenspan and as he was flooding the market with cheap money and lowering interest rates, the same principles applied at the time, the investment funds didn't know where to find any meaningful return that would not be negative (and the real interest rate has been negative for a very long time now, certainly more than 2 decades).

The cheap money gave people the wrong incentives, the .com bubble was created the same way that the agriculture equities bubble before the great depression, the housing bubble of two-thousand's and the final currency/bond bubble that's being inflated now. It's all in the hands of the federal reserve and their ability to counterfeit currency. .com companies weren't producing anything much of value, buying pencils at $1 and selling for 50 cents on line and having a business model that basically said: we'll make it up in volume was disastrous then, as it is today, but the people were buying the .com bubble just as readily and weren't able to admit it was a bubble in the same way that the house mortgages were bought and nobody wanted to admit that was a bubble.

Same thing is happening with US bonds right now, and it's funny how people are thinking that sovereign debt of a nation that prints currency as defense against is non-existent economy, all because of faith in government's ability to do something...

Let's put it this way: if the currency is weakening now, you don't want to be in that currency. But you don't buy Treasuries in that currency, because those Treasuries are the exact same thing as that currency, as they pay in that currency.

The shortage of the investment capital is due to the money printing and negative return rates that are artificially created by the governments. The real interest rates today are insanely high, but that's what markets figure - if the amount of money that can be printed is infinite, then there is no reason why return rate on real investment shouldn't be set infinitely high as well.

That's why no business can get a loan and only governments are swimming in worthless cash, since they print it.

As to Henry Ford - the guy was working in a sound monetary system, no federal reserve and no income taxes.

I actually have a few things written about it as well.

Re:No, that is not how it works

[Surt]

If Bill Gates hadn't exploited a monopoly, the pie would have been bigger for everyone. As you said, it's non zero-sum, and he was a net cost to the system.

Re:Bull

[roman_mir]

No, the way the economy works is you can't afford a house, so a bank put you in debt and gave the money to a developer. So when you want to remodel, you take out an additional loan or renegotiate your current loan and pay cash to a contractor who is maxxed out on his credit cards.

- well, that's the unfortunate consequence of Keynesian policies pursued by government that is trying hard to live way beyond its means and make you poor in the process pretending to save you from you.

Real economy works by people paying for items they buy with savings, and in a real working economy credit is mostly used for production, because it's supposed to earn interest.

Money sinks (houses, cars, TVs, etc.), don't earn interest, that's why this 'consumer' economy is failing.