Wednesday, February 01, 2006

Now the Google Balloon Pops, Fewer Bubble Opportunities Rise


By Elaine Meinel Supkis

There is still funny money out there and plenty of fools willing to part with it. Just like all the previous manias, the Google mania collapses rapidly. The price was bid up on the IPO to insane heights and now that sober reality sets in, the price collapses, dragging down the stockmarket which is running on fumes anyway. Like America itself.

From Associated Press:
Google Inc.'s rapid financial growth decelerated in the fourth quarter as the online search engine leader's profit fell below analyst expectations for the first time since its August 2004 initial public offering.

Tuesday's disappointing financial report rattled previously bullish investors, causing Google's stock price to plunge by more than 12 percent in a backlash that wiped out $16 billion in shareholder wealth.

The Mountain View, Calif.-based company said its net income nearly doubled from the previous year to $372.2 million during the final three months of 2005.
Things are going just fine at Google but the demands of the vastly inflated stocks meant vastly insane profits must pour into the pockets of the investors which is a demented belief.

Just like the dying housing market, it doesn't matter how good something is, if the market has grossly overbid prices, they collapse suddenly and disasterously. When this happens, it can drag down entire economies, nay, countries and even the entire world, if the bubble is bad enough.
The amount of shareholder wealth shed by Google during extended trading exceeds the current market value of General Motors Corp.
For the most part, the energy giants are keeping the stockmarkets seemingly afloat even though their very success spells doom for all others who must consume, at some level, the ever increasing costs of buying from energy companies.

Meanwhile, our government continues its head long plunge into the abyss. From AP:
The government expects to borrow a record $188 billion in the January-March quarter, even more than it anticipated three months ago, the Treasury Department announced Monday.

The total will surpass the old mark of $146 billion set in the first quarter of 2004, a year in which the federal budget deficit hit an all-time high in dollar terms of $413 billion.
And you can thank Alan Greenspan for this! He is the ultimate enabler. He is the one who made debt cheaper than inflation and thus encouraged this insane binge of spending, he didn't yell when Bush cut taxes, he thought it was great.

And the GOP goes from one disaster to another. In the news is the Democratic party is quietly pulling in more money than the Republicans this time around, now that Abramoff isn't funnelling multimillions in funny money and the other K Streeters see the writing on the wall and are now anxious to purchase Democrats instead of Republicans.

Where do we fit in this puzzle? We don't. At least, so long as we are quiet.
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