The Real Crash is dead ahead as 2008 is forgotten

MarketWatch ^ | 7-31-2012 | Paul B. Farrell,

[Sir Napsalot]

SAN LUIS OBISPO, Calif. (MarketWatch) — “Facebook will become the poster child for the current social-media bubble,” warns economist Gary Shilling in his latest Forbes column, “just as Pets.com was for the dot-com bubble.” Yes, Wall Street is repeating the 2000 dot-com crash as today’s social-media bubble crashes and burns.

Think history folks: Remember 2000-2002? The economy suffered a 30-month recession and a brutal bear market. The Dow Jones Industrial Average peaked at 11,722, then crashed, losing over 4,000 points dropping below 7,500, down more than 43%, with massive losses of more than $8 trillion in market cap.

But it gets worse: Shilling’s bluntly warning: “If we aren’t already in a recession, we’re getting very close.” Yes, he’s more reserved than Nobel economist Paul Krugman, whose latest book goes beyond hinting that the America economy is repeating the 2000-2002 recession, His title says it all: “End This Depression Now!”

But the scariest fact is that America’s warring politicians, CEOs and Super Rich can’t even see the obvious link between the 2012 social-media bubble and the 2008 Wall Street credit bubble that nearly bankrupt our monetary system and forced Congress and the Fed into bailing out our too-big-to-manage banks to an estimated $29.7 trillion in cash, credits, cheap money loans and debt relief.

But, unfortunately, the banks still haven’t learned the lessons of history. Instead, they dug in their heels, spending hundreds of million on lobbyists, fighting all reform efforts, went back to business-as-usual, sabotaging America and ultimately themselves.

[Sir Napsalot]

Read the rest. Facebook under pressure to produce a viable business model, its stock will continue to slide.

[GeorgeWashingtonsGhost]

Once more and more people realize that Facebook is nothing more than a vehicle for police state surveillance and monitoring, they’ll abandon it.

[nascarnation]

From today's WSJ:

About 1.99 billion shares of Facebook will become available for trading before the end of 2012—nearly five times the number of shares currently available for trading

Puts on FB are pretty richly valued, but could still present a good opportunity.

[kingu]

...rolls eyes... There is such a thing as learning from the past. But the ‘social media bubble’ is vastly overstated. While overvalued, these social media creations do something very different than the dot.com bubble - they actually make money. Not as much as some would like, but they do make money.

I still think the crash comes from commercial paper on property, with vast amounts of it coming due 3rd quarter 2012 - 1st quarter 2013. Just drive along your streets, look at all those newly built business centers and shopping malls, and the large amounts of vacancy, and picture those property owners paying their loans off with zero revenue.

And I can’t see a lot of corporations continuing their over-staffing much longer. I walked into a Staples the other day and had three staff ask me in five minutes if I needed any help - and realized that I was the only person in the store.

[Ron C.]

Facebook is a mere worthless pebble in the road. This market will crash below 6000, losing near 50%, virtually over night - and that black night not far away.

[VegasCowboy]

So it comes down to banks “fighting reform.” I guess the author has missed Dodd-Frank, the Durbin amendment, the CFPB, and on and on and on that are now firmly entrenched in the regulatory framework. These new regulations do nothing but stifle lending, yet somehow banks are to accept all new regulations with nary a whisper of argument.

[Route395]

“I walked into a Staples the other day and had three staff ask me in five minutes if I needed any help”...

Strange...the same thing happened to me at Home Depot yesterday.

[RedMDer]

[nascarnation]

look at all those newly built business centers and shopping malls

Here in the midwest that doesn't exist. There has been essentially zero commercial construction since 08.

[OneVike]

Remember 2000-2002? The economy suffered a 30-month recession and a brutal bear market. The Dow Jones Industrial Average peaked at 11,722, then crashed, losing over 4,000 points dropping below 7,500, down more than 43%, with massive losses of more than $8 trillion in market cap.

How convenient that the writer completely ignored 911. When those towers came down, America lost the economic power of a mid sized industrial city. There is no way you can expect us to recover from a blip of a recession we had after that.

If it were not for 911, America would have recovered by the end of 2001, because we were well on our way by then.

I do not ignore the crash of the dot com's, but truth be told if it were not for 911 we would not have been in nearly as bad of shape.