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FaceBook and the Fall of Europe May 31, 2012

Posted by markswill in Media, Navel Gazing, Politics, Schmolitics, That's Entertainment.

So little space, so much to blurt but as I promised, or rather threatened, a couple of days ago, ready-or-not here it comes.

You’re on FarceBerk right? Almost everyone I know is, even the technophobic and downright shy ones (like me). Some are heavy users posting details of their irritatingly mundane daily activities because they ain’t yet discovered Twitter, others simply regard it as an occasional digital promo-tool for whatever fabulous or intellectually laudable activities they’re up to (like me). But basically I hate it. Sure, it allows you to ‘keep up’ with friends, acquaintances and digital hucksters who from boastful references to your killer air guitar solos will bombard you with adverts for home recording software. Which is why young Marky Zuckerberg floated his brainchild on the NASDAQ last week, becoming even more obscenely rich in the process.

As we now know, the brokers concerned, Morgan Stanley, apparently fibbed about the true state of FB’s advertising revenues, pushed the asking price for shares from $28 to $35 and covertly issued 25% more shares than they claimed. Result? When the truth outed, FB’s share price plummeted and as I scribble the company’s valuation has dropped by some $25billion – yep, 25 billion – although it’s apparently still worth a chunky $79billion and I’m guessing the young snot who started it isn’t wailing too loudly. My underlying point is this: we are surely heading for another dot-com crash, but one that will make the Euro Crisis look like a Sunday afternoon game of Monopoly. Consider that FarceBerk is trading at a price-to-earnings multiple of 81, or 107 times earnings reported in the last 12 months. (The NASDAQ Internet Index average – which includes such heavy hitters as Gargle and fleaBay, is a more modest – but in my view, still barmy – 35 times earnings.) Which means that FarceBerk is gonna have to seriously ramp up its commercial exploitation of your daily doodlings if it’s to justify its revenue predictions.

Since virtually all of these outfits, and especially business-media sites like the equally egregious LinkedIn, currently have very limited ad. revenues, the unseemly rush to buy their shares is classic smoke’n’mirrors stuff, but the difference is that unlike the 2001 dot-com crash, technology stocks now represent a far greater slice of U.S. equities than they did then – almost 50% as opposed to 8% in 2001 – so the fall will be far more traumatic.

This matters for anyone saving for, say, a pension or who has a mortgage. Why? Because banks worldwide, and that includes the bank-of-last-resort, namely the IMF, have to rely on rising stock values to support their loans and debts unless like Britain (and pre-Nazi Germany), they simply print money. And if Greece abandons the Euro and goes third-world – which I bet it will – then the cost to banks holding Greek debt, which is virtually all of ‘em, will be massive. And if those stellar digi-stocks turn out to be nothing more than the Emperor’s New Suit of Woes… be afraid, be very afraid.

Which is why I read the interview with Christine Legarde in last Saturday’s Guardian with a jaundiced smirk. Sexy and bright though she is – in my book that’s horse’n’carriage territory – slapping down the Greeks for borrowing too much from central European lenders without visible means of support will only inflame an already irate population to vote in an anti-austerity left-wing (or neo-fascist right-wing), government next month who’ll demand a return  to the Drachma. Then all hell will break loose on the European markets, Spain, Portugal and possible Italy will follow suit, which won’t be pretty.

Undeniably ugly was Tony Blair’s performance at the Leveson enquiry last week during which he admitted that “if you fall out with a big media empire, then watch out because it is relentless”, yet with breathtaking impudence also claimed that there was “no deal” with R. Murdoch over New Labour’s European or media policies. Blair spouting lies is, of course, something we take for granted now, but I was still cheered by David Lawley-Watkin who managed to breech Leveson’s security cordon and live(ish) on television accuse our ex-PM of being “a war criminal” who was “paid-off” by  American bankers J.P. Morgan for supporting Bush Jnr’s ruinous Iraq invasion. It was good to see Teflon Tony rattled by his own deceit, if only momentarily.

Leveson is of course turning into an endless saga that threatens to inure us to the magnitude of the venal relationship between politics and the media. In this it is much like the constant unfolding of atrocity in Syria which no amount of hand-wringing by NATO and world leaders will bring to an end, and this because of course the West has too many vested interests in not intervening militarily, especially the Israelis and their Yank backers/apologists.  How Lord Leveson can ever come to a conclusion about the incidence of newspaper ‘phone hacking, political bribery by-any-other-name and all the rest is beyond me, but I fear the slaughter in Syria will continue unless and until Russia and China find that the Assad regime they so loyally support has lost its strategic value as an oil producer and Iranian-proxy. Only then will the hand-wringing stop and the gunships go in.

On a happier note – perpetual ray of sunshine, that’s me – all you book burners will be delighted that James Daunt, CEO of Britain’s last remaining bookstore chain, Waterstones, announced last week that it will start selling Amazon’s Kindle e-reader. Only months ago Daunt denounced Amazon as “a ruthless money-making devil” which threatened the very existence of the printed word, so has he caved into what some of my friends and many an online forum bleater see as inevitable and if so, how long will his bricks and mortar book browsoriums™ remain in situ?

Three years, maybe? By which time the piffling amounts cash-strapped councils save by closing their libraries will have removed yet another source of print’n’paper literature. Proof? At 2am on Tuesday police-protected renta-a-thugs protected emptied Kensal Rise Library – opened by Mark Twain in 1900 – of its stock whilst protestors looked on helplessly. You have been warned.

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1. Peter Silverton - May 31, 2012

oh, mark, such energy, such certainty . . .

markswill - May 31, 2012

And so many minutes of meticulous research…

Peter Silverton - May 31, 2012

yes, mark, all the necessaries for a fleet st columnist . . .

2. 'thecolonel' - May 31, 2012

Problem is, if I leave a comment, you’ll know I read the blogs and I couldn’t possibly allow that.

markswill - May 31, 2012

Never mind Geoff, your secret is safe with me.

3. Benzina Moto - May 31, 2012

. Funny thing is my economics tutor said to our course in 1978, “You are the screwed generation” (born late fifties on); meaning post war prosperity had been built on a boom in spending – a generation had free grammar schools, free milk, free university, tax subsidies on their mortgage and savings. (please note this is macro stuff, so individual misfortunes don’t apply, and sorry to anyone who didn’t benefit). But from the 1970s on this started unravelling because it relies on ever more money, borrowed taxed or printed. The golden generation down sized having sold their enormously price-inflated property on to the grossly overborrowed next generation, who now find the generation below them have no means of buying the King’s New Clothes. The banking/Euro crisis is the endgame – we either muddle through indefinitely (as Japan has since 1989) or let the thing crash and hope the healing process doesn’t take too long. Or lead to the return of Military dictatorships in Greece and Spain. Or even here – when all the Eurozone refugees realise they are entitled to come to the UK and claim benefits, will we really leave our borders open to EU residents?

In the meantime enjoy the bank holiday weekend, you loved ones and the simple things in life. I suspect we need to get used to those sort of pleasures rather than consumer durables and exotic holidays

markswill - May 31, 2012

Pithy and prescient as ever Greg… you should really be writing this blog, not me!

4. Tom Stewart - May 31, 2012

“You’re on FarceBerk right?”
Wrong. Can’t be arsed with it.

markswill - May 31, 2012

I admire you for your self-restraint Tom… and the fact that you’ve got a life. Unlike me of course, although I swear to Allah that I only use FB to publicise my rants amongst those who apparently haven’t.

Am nonetheless perversely hoping that someone will mount a coherent defence of Zuckerberg’s folly if only to further irritate the hell out of me.

5. Paul Blezard - May 31, 2012

Couldn’t agree more about all the emperors with no clothes, Mark, especially FaceBerk. T’internet has always been a ‘double-edged sword’ and now more than ever. The key problem, from a commercial point of view, surely, is that an entire generation has grown up believing that only a fool would pay for anything accessed over the web, whether it be music, news, pornography or indeed pearls of wisdom such as your own! The other problem is that half the world has got used to finding everything they want to know within seconds via Gargle, but with very little discernment between truth and complete bollox. If it appears on the first page of a Google search, it must be relevant and true, right? In-depth research means going onto the second page…….

Peter Silverton - May 31, 2012

is it possible that what you complain of is the true state of the interior of people’s heads (all of us, to a greater or lesser extent) and that facebook etc has merely placed the stream of conscious (or unconscious) in the public domain for the first time . . .

markswill - May 31, 2012

That’s a very good and serious contention, Pete, although I wonder whether the nature and extent of our streams of consciousness has changed as much as our previous hesitance to make it public has evaporated?

Peter Silverton - June 1, 2012

oh, i don’t think so – at the risk of sounding pompous, read your herodotus . . . things (ie people) have barely changed in many ways since the founding father of journalism (all hail) was writing 2,500 years ago . . . or sophocles . . . i saw antigone the other day and was again struck by the (seeming) currency of some of creon’s attitudes and postures – i know it was a modern translation but, still, you could hear some of his justifications coming from dick cheney’s mouth (and just as unknowing and unself-knowing in each case) . . . or, i think of freud comment on oedipus rex: if that incest narrative didn’t have some deep unconscious human universal, we wouldn’t still be performing the play after all these years . . .

markswill - May 31, 2012

For once (?!) Blez, you’re 100% correct. Blimey, you’re becoming almost and despairingly cynical as I am, then.

6. WTK - May 31, 2012

Two quick comments: I’ve always thought the idea of so many sovereign nations adopting a single currency and foregoing the right of the market determining value was nuts. Should Africa have one currency? Southeast Asia next? Idiotic. Yes, Greece is just the first of many. Short the Euro.
The only good thing about Facebook (altho I prefer Visagelivre) is that the hedge funds who buy large and blow out fast at the opening bubble got burned! How sweet.

markswill - May 31, 2012

You are also correct Mr T (this is starting to look like a worrying trend), but German political vanity will try and maintain the Euro well beyond the point that we’ll all be bankrupt.

Haven’t checked-out Visagelivre, but what with my occasional delves into FarceBerk, LunkedIn, Plaxo and the rest, life’s too short to bother… at least for now.

7. Paul Blezard - June 1, 2012

Right on cue, today’s NYT carries an article about the unforeseen consequences of ‘liking’ things on FB. I would also add, ‘Beware of anyone who uses the word “leverage”, especially if they pronounce it to rhyme with ‘beverage’! http://tinyurl.com/c3n4s7y

markswill - June 1, 2012

Thanks Paul… and I rest my case! Quite right about ‘leverage’, too.

8. Andy - June 1, 2012

It’s looking very gloomy old bean, and we’re only at the start of the decline.

Peter Silverton - June 2, 2012

altogether now . . . eyore! eyore! eyore!

9. Johnnyb - July 27, 2012

Well Mark, not that I personally know you, but you have been a buzz in my consciousness for a long time, when I read a Road Test of the “Lame Duck” in a copy of Bike magazine in the 70s & pondered on the articles in the magazine, which @ that time were completely over my head, which also @ that time was full of naivety & hope, long since shattered by the ways of the World!
Howsoever, you rise in my consciousness was brought on by moving books a few months and finding & re-reading RooR2, a prophetic mix if I dare say so of, on the edge ramblings, by some-one “smacked up to their tits” on substances, probably as yet undiscovered by the “great unwashed”!

Amongst said rambling were some salient insights,which got me thinking NOW, about why the Country of my birth felt so alien @ this point in time,not essentially to do with the people “init” & the fact that the very subject which had united us, Motorcycling & the odd Socio-political ramble, those many years ago, which comforted oneself, when the only other amusements @ night was the Radio, OGWT, & I Claudius, seemed to have some relevance now, but in an odd way were Light years away. .

Possibly, some time later I realised I Claudius, was an important insight into the real workings of society, (though I didn’t realise it @ the time of viewing). Bike magazine, was essentially a ray of light in a darkened room, a spark of rebellion, probably naive in its own way, but a little hope shone through!

Someone reminded me, that we only joined the Common Market & the British peopled, (hoodwinked as easily in the past as in the Future), maybe, hadn’t voted for all the rest of the bollocks that went with it! But I am increasingly concerned with the lack of truth, honour, recognisable ethics & empathy, portrayed by our Elected Leaders and certain sections of Society in this Nation of ours, the gullibility of large sections of our Society, the manipulation by the Press, Media & Government, false ethics & values substituting real ones, the Police-State ethos & change of appearance and tactics & the fact that personal freedoms and opportunities are whittling us back to the days of Feudal Overlords.

What has happened to motor-cyling just epitomises things, in a mini-scenario type of way, you have a voice Mark & I presume since your indiscretion, you seen the “Light” and are on the “Straight & Narrow”, but where did all these manipulative uptight controlling surveillance, camera toting arse-holes spring from, in this Free Nation of ours & what are you going to do Williams, to put it right & pay your Karma off?

Howabout a Newspaper by yours truly, in the style of pamphleteers!

We will save bikes for another day!

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