People Making Money Net

I believe as a whole, Americans are a very compassionate and caring group of people. Along with that, I believe that most Americans would not willingly or knowingly allow someone to go hungry or uncared for. The amount of charitable contributions we make each year to organizations whose mission it is to help those in a time of need demonstrates the compassion of Americans.

There is however, a stark difference in freely giving to charity and being forced to serve another. When the government provides a service, no matter what that service is, where does the money come from to fund it?

Taxation.

The only way for government to give one American anything is to first, through the tax code, take money from another American. It must forcibly use one American to serve another American. In most literal terms, forcibly using one person to serve another is the definition of slavery.

So why do we continue to allow our government to enslave us?

Some would argue that our government should be there to provide a safety net, but how big does that net really need to be? Studies have shown that people change their behavior when the government provides welfare. With the “Great Society” programs of the 1960’s, came an increase in the number of unwed mothers and conversely when welfare programs were reformed in the mid 1990’s, the number dropped.

Big cities like San Francisco and New York have some of the most generous homeless programs in the country — they also have some of the largest homeless populations as well.

In Europe, where unemployment compensation benefits are very generous, people spend less time looking for jobs and in some countries, the dole is actually a career opportunity. Up until recently, unemployment benefits in the U.S. were modest and as a result, people took jobs that were available. Now, it seems to most that unemployment benefits will be extended indefinitely — giving little incentive to take a job that’s less than perfect.

Continued on the next page

With Sunday night's announcement that Goldman Sachs had invested $450 million in Facebook, one could almost hear the supple leather stampede of Ferragamo loafers beating down Lloyd Blankfein's door. After all, with Goldman's rare "special purpose vehicle," its private clients would be able to invest $1.5 billion collectively, without the SEC's oversight, in a social network that Goldman conveniently just inferred was worth $50 billion. And all for the rumored low, low cost of a minimum of $2 million and a promise not to sell until 2013. That is, if clients were willing to do it within the week and without the requisite memorandum explaining the risks.

Such is the magic of Goldman, reasons Fortune contributing editor Duff McDonald. In an article about the five reasons McDonald is not buying Facebook stock — including the troubling facts that (1) no one knows the company's actual financials, and (2) people use it to play backward games like Farmville and Cityville — he also cited Goldman's involvement as a reason to be wary. But we prefer to see McDonald's criticism as yet another reason for Goldman to be proud of being so dang vampire squid about the whole thing. Market manipulation is so baller. We're glad it's making a comeback so early in the new year.

Reuters' Felix Salmon has already pointed out that Goldman's motivation in investing in Facebook is partly to lock down the lead slot as a book runner for when the company does go public. Others have remarked that, depending on the fees that come with Facebook going public, Goldman might pay for its investment on that alone. According to Yipit founder Vinicius Vacanti, when you count them up, Goldman's strategic investments in Facebook actually value the social network closer to $36 billion. McDonald pegs it at $39 billion. Although, of course, it's in Goldman's interest to make everyone think Facebook looks like it's worth $50 billion, which might explain the rush job and lack of private placement memo.

By McDonald's hypothetical math, if Facebook offered the public a chance to buy 20 percent of the company in an IPO, that would be worth $10 billion. Goldman would earn a 2 percent underwriting fee as a book runner on that $10 billion, picking up $200 million. McDonald continues:

Goldman would have to share such spoils, so let's call it $100 million into their pocket. Subtracting that underwriting fee [$100 million] from the Goldman investment [$450 million], and you could easily make the case that for a net purchase price of $350 million, Goldman's ante only values Facebook at $39 billion. Hey, that's just off by $11 billion, so don't worry about it. Buy your shares where you can get them. In other words, go open a $10 million minimum private client account at Goldman Sachs. (Who says Goldman didn't learn its lesson about shafting its own customers? This time around, they've managed to get the customers to line up the shaft themselves.)

C'mon, you don't get to be America's great big bubble machine by expending energy trying to shaft clients. You gotta teach them to do it for themselves. Sorta like "give a man a fish," only, you know, with shafting. By Salmon's reasoning, even if Facebook stays private, Goldman could make out with an even handsomer reward with more private placement deals. "Right now, [Goldman's] in the highly enviable position of having the exclusive ability to parcel out Facebook shares to its own clients, and to make money on pretty much every trade in Facebook shares. That, surely, is more valuable than any one-off IPO fee." The greatest trick the devil ever played was convincing the world that Facebook was definitely worth $50 billion in January 2011? Is Lloyd Blankfein Keyser Söze?

Five reasons why I'm not buying Facebook [Fortune]

Goldman’s Investment Actually Values Facebook At Much Less Than $50 Billion [BI]

Why Facebook won’t go public [Reuters]

Related: Goldman Sachs Investment in Facebook Makes That $50 Billion Valuation Look More Legit

free rental agreement forms

Profs Tell Fox <b>News</b>: Stop Making Viewers Dumber | Education <b>...</b>

Need any more proof that Fox News is actually making its viewers dumber? Look no further than the latest study out of the University of Maryland. Fox's fake news program has actually managed to con... Read more of this post, Profs Tell ...

Victoria Kolakowski: 5 Facts About America&#39;s First Transgender <b>...</b>

Sworn in on Tuesday, Victoria Kolakowski became the country's first transgender trial judge. Surge Desk takes a look at her career and life accomplishments.

GREAT <b>NEWS</b>: Banks Cooking Up New Ways To Screw You

Internet Surpasses Television as Main News Source for Young Adults 29; Amazon's Disruptive Android App Store Now Open To Developers — Full Details 25; YouTube - Homeless man w/golden radio voice in Columbus, OH 18 ...