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It’s finally here, the most celebrated – and expensive – IPO in U.S. history.  Facebook priced last night at $38/share, making Mark Zuckerberg – at age 28 – one of the world’s richest men.  Despite pro-forma, annualized EPS projections of roughly $0.40 per share, the stock is opening at roughly $40/share, representing an initial forward P/E of around 100x range.  I am knowledgeable of Facebook’s earnings outlook – the only thing that should matter to stock investors – but at its initial (~$110 billion) market cap, it certainly isn’t cheap.

Facebook IPO valuation sets record: Is it really worth $104 billion?

In a nation where nearly all major banks are INSOLVENT, the $176 million of underwriter fees are the most important aspect of the IPO – particularly when the lead “bookrunners” are among the industry’s most insolvent – Morgan Stanley, JP Morgan, and Goldman Sachs.  Not that $176 million – split between 33 investment banks – is much more than pennies in the begging cup, but as they say, “something is better than nothing.”

Facebook underwriters set to split about $176 billion in fees

One of the best newsletter writers in the business is “GERALD CELENTE, PATRIOT,” a lone wolf in our “shadow world,’ as he reports principally on big picture macro trends.  Early this week, he dispatched a brief missive titled “Financial Markets Panic, Euro Riots Rage, While the US Obsesses Over Gay Marriage.”  Below is an excerpt from this excellent piece, which just as easily could have focused on Facebook’s IPO…

It was just another inane episode on “The Presidential Reality Show:” the issue of gay marriage had become a major national issue, in fact, it was the issue! And yet it worked!  Each moment spent on gay marriage deflected the nation’s attention from everything that was consequential: US soldiers sacrificing life and limbs in futile ongoing wars, while new futile wars were in the making; tens of millions of homes foreclosed, millions jobless and homeless; the nation in debt, consumers in debt, and college grads drowning in debt … as the global economy comes under renewed attack. These are the real issues.

No matter which medium you prefer – TV, radio, newspapers, or the internet – the MSM (Mainstream Media) is programmed to ignore real issues and highlight the “bread and circuses” that mask the ominous present and uncertainly future.  Fortunately, I am one of the few that stopped watching CNBC (except quotes on muted TVs while working out) – or reading the Wall Street Journal  – many years ago.  However, my kind are few and far between – such as those reading this RANT – while the majority is far more interested in unimportant issues like gay marriage, reality TV, video games, iPhones, and Facebook.  Not that gay marriage is not important in its own community, but just 5% of the world’s population is gay, and whether or not gay marriage is “legal,” no one’s life or welfare is endangered.

Part of this recurring “ignorance is bliss” phenomenon – throughout history – relates to man’s psychological tendency to deny the presence of danger, preferring to focus on the innocuous during times of maximum stress.  I have written on this topic numerous times, which well explains why government PROPAGANDA denigrating PMs works so well.  In the “big boy” world of politics and banking, gold is bad for business, while for the “proletariats” and “poor,” PMs are not affordable.  In other words, when ALL fiat currencies inevitably collapse, “precious” few will benefit – and they will face a far more difficult world, per David Schectman’s prescient comment Friday:

Yes, your wealth can increase and at the same time your standard of living can fall and that is where we are all headed. The worst case scenario is to lose you money and try and deal with the crushing inflation and social unrest that will accompany it. Money ain’t everything, but you’re gonna need a lot of it to get by.

Frankly, I don’t care if Facebook is a bubble– and don’t be surprised if it’s not.  After all, many thought Google was just a ship passing in the night, but it is now earning more than $30/share each year – growing rapidly – and thus, reasonably justifying its $640 share price.  However, I do view the Facebook IPO hype as ominous – particularly given what I view as its hypnotic, counter-productive role in society – making gay marriage appear to be an important issue after all.


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