Goldman Sachs has access to money. But more important to Facebook at this point of its ascendancy is whether Goldman Sachs has trust. The question is already being widely bandied about in the business news world, such as in the CNBC story "Wall Street Wonders if Goldman Will Double Cross Facebook", which quotes a Wall Street executive as saying, "we would have killed to be in this deal". Clearly a myriad of investment houses/banks would have stepped in to fill the financial role Goldman has undertaken. A financial role that would not have come with the spurious baggage with which Facebook is now associating itself
Facebook is one of the great triumphs of the American system. Innovation, courage, personal risk, entrepreneurial vision, a classic success story of the best of the American way. One in which each American, in varying degrees depending on one's individual construct, can be proud.
But now it has aligned itself with an organization that during the height of the financial crisis -- a crisis that has yet to be resolved -- profited handsomely. While millions were losing their jobs, Goldman made enough off the nation's misery to gather at the time a monstrously large bonus pool of $23 billion. This while having parlayed away their once proud imprimatur to sell financial products to the unsuspecting -- financial instruments engineered to fail -- not only costing the buyers hundred of millions in losses, but creating additional millions in gains for those who 'cleverly' bet against them (instruments that would be described in solemn Congressional hearings as "sh*t").
And it goes on, shorting municipal bonds which they had underwritten, getting preferential treatment under the AIG bailout in the billions while others were being bankrupted throughout the nation and thrown out of their homes. Allegedly speculating in the billions on oil futures
(http://www.forbes.com/forbes/2009/0413/096-sachs-semgroup-goldman-goose-oil.html)
thereby helping to push oil prices to levels that brought $4/5 per gallon gasoline to the nation at an economic rent that became an important factor in the financial crisis to follow.
And now to attach the emergently celebrated name of 'Facebook' to that of a company whose actions at a time when the country needed financial help and vision rather chose to profit heedlessly is profoundly sad.
Mr. Zuckerberg, we would have hoped you would know better. And to those who might want to ascribe it to his youth, please remember Napoleon became First Consul of France at the age of 28.
If they were a company with a solid business model like Google Mr. Learsy might be right but for what they are trying to do using Goldman is very appropriate :-)
http://tv.gawker.com/5727257/jon-stewart-calls-out-facebook-goldman-sachs-for-their-shady-new-deal
2. And yet we continually put Wall Street types in the position of the fox guarding the hen house. Bill Clinton did, GW Bush did and now Obama is doing the same thing.
3. I use the term Wall Street to represent the money/banking/finance component of the economy. There are other indispensible components of an economy and they include: production of goods and services, marketing, human resources, tranportation, consumers, commercial law etc.
4. Interdependence is a word that I first encountered in Economics 101. The above components need to interact and work cooperatively with each other for the economy to function productively and efficiently.
5. THE BASIC PROBLEM IS THAT THE COMPONENT CONCERNED WITH MONEY, BANKING AND FINANCE IS DOMINATING ALL OF THE OTHER COMPONENTS. Production is down. therefore fewer goods and services are available and since employment is down there is less money to buy goods and services and there are viscious cycles everywhere.
6. Our approach to fixing the economy has been like a cadiologist treating a patient with pulmonary edema (water in the lungs) in the ICU by drying the patient out with diuretics without regard to what happens in the kidneys and elsewhere. Eventually nothing is the body is functioning properly.
7. WALL STREET IS THE TAIL WAGGING THE DOG.
http://www.youtube.com/watch?v=Akb5NyZaA9c
see this link
http://www.youtube.com/watch?v=CtllmgvoT_g&feature=related
- What is GS going to do with all that private (non-business) information?
- What is standing behind this $50 BLN (this is a lot of money)?
- Does the information about the people in FB belong as a commercial product to any third parties that may trade with it?
- Is it really FB that worths that money or is it a next generation financial scam scheme?
- Or maybe GS simply needs some vehicle (whatsoever) to deliver cash to its Management Board?
The FB itself turns out to be something else - you enter the social media for exchange of ideas and end up as files with some people, who wonder how to use all that information to advance with their career, financial equilibristics, or whatever.
["But more important to Facebook at this point of its ascendancy is whether Goldman Sachs has trust"]
Facebook is the equal to GS when it comes to matters of trust
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That is the American culture. We will grab onto anything different.
The gov has been plundering the natural resources of other defenseless countries for more than a century. And don`t forget how T. Roosevelt just stole the Panama Canal. When TR was asked by a reporter by what right did the US own the canal he declared, "We just took it".
So if Goldman follows the gov`s shady ways we really can`t blame them too much.
My concern is that Facebook, like Google, doesn't forget. Every private message, every post to your wall, every family photo, every friend connection you ever have is permanently archived in the hard drives of their massive data warehouse.
Studying the history of Facebook back to the days of Zuckerberg's posting of other peoples' pictures without their permission in order for he and his dorm room buddies to rate the best looking babes, it's absolutely clear that the man doesn't personally care whether or not he violates other people's privacy. He famously stated at one time that people were stupid to trust him.
In the long run, we are going to live in a transparent society, and will no longer be able to keep secrets. However, I think Goldman, and it's revolving door relationship with the U.S. government and Federal Reserve, represents a force for corruption, secrecy, and in general, greed and ruthlessness.
Now I'm wondering what kind of information via Facebook Goldman has access to for their investment. Do they get to have access to the massive data warehouse of human intelligence? If they have access, then you might as well just assume that the government has unlimited access, too. Eventually, we'll all know everything about everybody, but it really scares me that Goldman might be ahead of that curve.
That is why some of us believe in limited government.
"Government "help" to business is just as disastrous as government persecution... the only way a government can be of service to national prosperity is by keeping its hands off. "
- Ayn Rand (the classic liberal, NOT the right-wing zealot)
We ought to just all agree that we can do better, put our brightest minds on the problem, and come up with some kind of decentralized internet-based open and transparent solution.
I think we don't even need nation states any more, given their propensity for corruption.
However, there's the one issue of banking. Perhaps a global non-profit bank governed by an internet-based process with some kind of first principles to limit access to private information to trusted parties and prevent a tyranny of the ignorant mobs.
Basically if we could set it up so that the bureaucrats and politicians were totally out of the loop, that would be best.