Facebook Fiasco
By Staff News & Analysis - May 22, 2012

The selloff in Facebook shares deepened on Tuesday, as investors continued to question the stock's valuation after Reuters reported that underwriters cut their revenue forecasts for the company before the IPO. Facebook's shares hit a low of $30.98 on Tuesday, 8.9 percent below Monday's close, and a loss of 18 percent from their $38 IPO price. – CNBC

Dominant Social Theme: The failure of Facebook is a success, nonetheless. It's Zen; don't try to understand it.

Free-Market Analysis: Facebook's stock price is down something like 20 percent from the IPO price and the damage control is being done two ways.

First, the downward spiral is being treated as business-as-usual. Second, it's being treated as part of a larger upward ascension.

We don't see it either way, of course. The Facebook fumble will now further confirm the general alienation that the US baby-boom generation is feeling when it comes to stocks and investing generally.

We've written a number of articles about this. We've called what occurred in the 20th century a "dreamtime" – an era when central bank money printing sent stocks upward with gravity-defying force.

Fiat money is the stock market's best friend. But in the 21st century – by design or otherwise – investing as a methodology of securing one's retirement is increasingly being revealed as a promotional ploy of the powers-that-be.

The power elite that wants to run the world also evidently and obviously controls central banking. If one wants to chain the world to paper money then the best way to do so is to give people a stake in it. And the best way to do that is to tie people's "retirements" to fiat money. And that's just what has happened.

But in the 21st century, thanks to what has taken place in the larger economy and thanks to the abysmal performance of the stock market itself, people are growing increasingly distrustful.

Here, at random are some feedback entries to the article excerpted above.

• Here's the thing: even if Faceplant becomes an also-ran and those nascent fools who bet on this dog lose their shirts, CNBC will spin it positive. They will never admit to the galactic shilling/shellacking they they did, the CNBC Faceplant crackwhores.

• Anyone else notice how CNBC blocked comments on Facebook articles during the IPO. Facebook is a fad and the IPO is just one big "legal" pump and dump.

• Finally CNBC allows us to comment on the whole pump and dump facebook IPO. For a moment I thought CNBC was blocking all bad facebook propaganda. The only thing I am concerned with is that I hope small investors are not the ones that got shafted by MS! Remember once people start to see adds and information being sold then goodbye users.

People, even those whom one would think might be sympathetic to market-based participation, are growing wary. Too much has taken place in the past four years for even the most committed investor to be sure of the veracity of the system as it is.

The question then becomes … is this by design or happenstance. The answer in our view involves the organization of the modern market itself. it is, unquestionably, an artificial phenomenon and, as well, a manipulated one.

It is manipulated day-to-day by such quasi-government facilities as the "plunge protection team" and it is manipulated in the larger sense by the interaction between central banking and securities money flows. As has been amply shown in the past four years, even such investment stars as Warren Buffet have a hard time "investing" during bear-market cycles.

In fact, the world's stock markets, certainly the Western ones, continue to struggle with a bull-market in money metals and a bear market in fiat-paper money. Central bank money (fiat money) did well in the '50s, '60s and in the '80s and '90s. Gold roared back to life in the '70s and 2000s.

The markets are currently grapped in a Golden Bull that has been running since about 2000 and has plenty of legs left to run. We've presented this argument numerous times in the past. It is a predictive argument, but based on the larger marketplace patterns inflicted by central banking drivers.

These are predictable as well. The central bank overprints money and causes booms and then busts. Currently, the powers-that-be are refusing to unwind the distorted banking system, which is giving rise to continued unemployment and the Golden Bull itself.

These are simply facts. The power elite itself is distorting the market that it provides the driver for. The driver is fiat money and the refusal to unwind is what propels the larger cycle.

From our point of view, and given the artificial nature of the system itself, the larger investment phenomena are being determined as well. A decision has likely been made at some level to drag out the pain and continue the chaos.

And this is what's having such a corrosive effect on investors' animal spirits. In the era of what we call the Internet Reformation, the dominant social theme of investment-oriented retirements continues to slip away.

Those involved with the markets, managers, brokers and planners instinctively defend the market as it is. But it seems to us that it is a market at war with itself. Those at the very top who organized, orchestrated, the current marketplace are also in our view those who are responsible for its current funk.

it is a delicate balancing as we have remarked previously. World government of some sort is being prodded and pushed forward along with a good deal of chaos. The trick is to develop enough, but not too much.

After Thoughts

The public markets are not "coming back" until the current bull-metals cycle has run its course. And that will take a good deal of additional time.