Street Speculator

Facebook and Twitter are two of the most popular Social Networking sites on the web. This popularity is both in and outside of the U.S. They offer an exceptional services and have millions of members.

Facebook was reported to have received over 5-million new members per week for the month of January. Twitter also has a large and growing following. But, there is one familiar problem that plagues both companies.

MONETIZATION: Twitter generates NO revenue. No advertising, product placement, etc…. Facebook, to its credit, does have an advertising model. However, the click-through rate is extremely low, thereby diluting the amount Facebook can charge advertisers on a CPC (Cost-per-click) rate.

Facebook does have debt. Most of the debt raised by the company was used to purchase and lease additional computer server capabilities (To compensate for the new weekly members). There is some speculation that Facebook is looking to raise even more capital.

As a private entity, Facebook does not have to report its financial data. The company is rumored to generate between $130-160 million annually in revenue. The profit margin, if any, is not known. However, financial analysts think the annual revenue generated by the company is low compared to the number of new users/members.

Twitter has just announced that it will offer a “premium service” in the near future. The service will initially be offered to businesses. There are many corporate entities currently using Twitter.

In closing, no one can question the popularity of Facebook and Twitter. The question is whether these companies will be around in the next 7 years if there is no revenue generation or if the amount remains at current levels (Speculative levels). Basically, when will the investors of these companies become impatient, demand an all-or-nothing scenario, then force the companies to sell to the highest bidder. Remember, Mark Zuckerberg, founder of Facebook, turned down a $1 billion cash bid from Yahoo (Symbol:YHOO) last year.

I understand the point but I think ABC News sends the wrong message with this story.

It is difficult for anyone to venture out and start a business. The SPEC’s have the utmost respect for anyone willing to take this risk. It’s a challenge both physically and mentally, which is especially true for one having a family depending on an income.

In this case, however, the story’s focus is a gentleman whom was making about $750,000 per year and owned a nice & luxurious home. This is where the concern lies.

It does not, ON THE SURFACE anyhow, portray extreme difficult circumstances. The viewing public is to feel sorry for a former millionaire. One problem with this economy is that everyone attempted to live like a millionaire by using credit. NO CASH AVAILABLE.

There is nothing wrong with being a Pizza Delivery driver. NOTHING. People have been doing this job for the past 20 years. This news story gives the impression that delivering pizza is somehow beneath the conscious OF MANKIND. WRONG MESSAGE.

Pizza delivery drivers are no different than any other employee. They may make a bit less in salary, but otherwise, no difference.

The video also comes across as ELITIST. The wife made a comment about going to work at the end of the story. I believe her job was in managing the “snack food” bar at her children’s school. AND!!!, if you need to work, then work.

ABC, if you want to contribute something meaningful and useful to this crisis, be careful not to use broke millionaires as your example!!!

There is plenty of blame to go around. The past six months has provided blame to the Financial Industry. Many U.S. citizens are both upset and concerned that the Fed continues to bail out these firms deemed “too big to fail” while not doing enough for those who have recently become unemployed or currently going through foreclosure.

Reality ”can” justify the bailouts of financial institutions. If the capital markets are in disarray, the ecntire economy would be affected, including those entities not normally associated with the financial industry (Bankruptcy of local governments, layoffs in the educational system, reduction in public services including various insurance programs).

However, remember that WALL STREET is and has always been in business to make money, PERIOD!! They raise money for small and large businesses, local and international governments, and extend lines of credit. I don’t blame the STREET for creating this current meltdown, but give them responsibility for extending the difficulties.

This is how this story begins, WITH YOU & YOUR GREED. The housing meltdown initiated the crisis. People began to default on home loans where such defaults reverberated throughout the entire global financial system.

MAIN STREET (MS) bit off more than it can chew. Many purchased a home because of its size without looking at the costs of maintenance (Excluding a mortgage, there’s insurance, taxes, etc….). But, MS only concern was to get qualified (At any cost) and move in. The SPEC’s will not discuss the cars or other material items MS thought were necessary goods.

To be fair, there were many who persuaded MSto accululate excess. Mortgage Brokers, Real Estate Salesman, the news media, politicians, etc… In order to have any sense of self-worth in the U.S., you 1st need to “Display” yourself. If not then you are not one of the few whom are experiencing the American Dream.

WALL STREET then stepped in. They took your GREED and created tradable investment securities using it & your ignorance. CDO’s (Collaterized Debt Obligations), CLO’s (Collaterized Loan Obligations), CDS’s (Credit Default Swaps) and so forth. These firms got into trouble when the asset creating value in these securities (YOU and your mortgage payments) started to either default on their obligations or became severely delinquent, causing the value of the securities to drop.

Now here we are. Government bailouts will continue. But, the government cannot print money forever nor save everyone. For those who recently joined the ranks of the unemployed, it is time to use an innovative mind and create wealth for you and yours. Remember, the U.S.’s biggest lender, the People’s Republic of China is now doubting our economy & may begin to sell U.S. Treasuries subsequently creating more chaos.

If you did not catch this weeks edition of The Daily Show, I have enclosed one of the clips.

John Stewart has just summed up this entire financial mess! Basically, everyone is a Speculator, there are no EXPERTS (Regardless of how the Morning News shows describe their guests).

Let John explain it further: