Posts tagged Facebook
By Peter Schiff
WhatsApp With That?
Two pieces of business news announced this week provide a convenient frame through which to view our dysfunctional and distorted economy. The first (which has attracted tremendous attention), is Facebook’s blockbuster $19 billion acquisition of instant messaging provider WhatsApp. The second (which few have noticed) is the horrific earnings report issued by Texas-based retail chain Conn’s. While these two developments don’t seem to have much in common, together they shed some very unflattering light on where we stand economically.
Given the size and extravagance of the Facebook deal, it may go down as one of those transactions that define an era (think AOL and Time Warner). Facebook paid $19 billion for a company with just 55 employees, little name recognition, negligible revenues, and little prospects to earn much in the future. For the same money the company could have bought American Airlines and Dunkin’ Donuts, and still have had $2 billion left over for R&D. Alternatively they could have used the money to lock in more than $1 billion in annual revenue through an acquisition of any one of the numerous large cap oil producing partnerships. Instead they chose a company that is in the business of giving away a valuable service for free. Come again?
Mark Zuckerberg, the owner of Facebook, is not your typical corporate CEO. Through a combination of technological smarts, timing, luck, and questionable business ethics, he became a billionaire before most of us bought our first cars. And in the years since social media became the buzzword of the business world, Wall Street has been falling over backward to funnel money into the hot sector. As a result, it may be that Zuckerberg looks at real money the way the rest of us look at Monopoly money. It also helps that a large portion of the acquisition is made with Facebook stock, which is also of dubious value.
But even given this highly distorted perspective, it’s still hard to figure out why Facebook would pay the highest price ever paid for a company per employee – $345 million (more than four times the old record of $77 million per employee, set last year when Facebook bought Instagram). The popular talking point is that the WhatsApp has gained users (450 million) faster than any other social media site in history, faster even than Facebook itself. Based on its rate of growth, the $42 per user acquisition cost does not seem so outrageous. But WhatsApp gained its users by giving away a service (text messaging) for which cellular carriers charge up to $10 or $20 per month. It’s very easy to get customers when you don’t charge them, it’s much harder to keep them when you do.
Boosters of the deal expect that WhatsApp will be able to charge customers after the initial 12-month free trial period ends (it now charges 99 cents per year after the first year). Based on this model, the firm had revenues of $20 million last year. But what happens if another provider comes in and offers it for free? After all, the technology does not seem to be that hard to replicate. Google has developed a similar application. More importantly, no one seems to be projecting what the cellular carriers may do to protect their texting cash cows.
WhatsApp gives away what AT&T and Verizon offer as an a la carte texting service. As these carriers continue to lose this business we can expect they will simply no longer offer texting as an a la carte option. Instead it will likely be bundled with voice and data at a price that recoups their lost profits. If texting comes free with cell service, a company giving it away will no longer have value. People will still need cellular service to send mobile texts, so unless Facebook acquires its own telecom provider, it can easily be sidelined from any revenue the service may generate.
Some say that texting revenue is unimportant, and that the real value comes from the new user base. But how many of the 450 million users it just acquired don’t already have Facebook accounts? And besides, Facebook itself hasn’t really figured out how to fully monetize the users it already has. In other words, it is very difficult to see how this mammoth investment will be profitable.
From my perspective, the transaction reflects the inflated nature of our financial bubble. The Fed has been pumping money into the financial sector through its continuous QE programs. The money has pushed up the value of speculative stocks, even while the real economy has stagnated. With few real investments to fund, the money is plowed right back into the speculative mill. We are simply witnessing a replay of the dot com bubble of the late 1990′s. But this time it isn’t different.
In another replay of that spectacular crash fourteen years ago, the appliance and furniture retailer Conn’s has just showed the limits of a business built on vendor financing. In the late 1990′s telecom equipment companies almost went bankrupt after selling gear to dot com start-ups on credit. For a while, these “sales” made growth and profits look great, but when the dot coms went bust, the equipment makers bled. Conn’s makes its money by selling TVs and couches on credit to Americans who have difficulty scraping up funds for cash purchases. For a while, this approach can juice sales. Not surprisingly, Conn’s stock soared more than 1500% between the beginning of 2011 and the end of 2013. These financing options are part of the reason why Conn’s was able to keep up the appearance of health even while rivals like Best Buy faltered in 2013.
But if people stop paying, the losses mount. This is what is happening to Conn’s. The low and middle-income American consumers that form the company’s customer base just don’t have the ability to pay off their debt. The disappointing repayment data in the earnings report sent the stock down 43% in one day.
In essence, Conn’s customers are just stand-ins for the country at large. In just about every way imaginable, America has borrowed beyond its ability to repay. Meanwhile our foreign creditors continue to provide vendor financing so that we can buy what we can’t really afford.
So thanks for the metaphors Wall Street. Too bad most economists can’t read the tea-leaves.
Peter Schiff is the CEO and Chief Global Strategist of Euro Pacific Capital, best-selling author and host of syndicated Peter Schiff Show.
Order your copy of Peter Schiff’s latest book, How an Economy Grows and Why It Crashes.
11-Year-Old Girl BANNED From Selling Cupcakes By Control Freak Government Bureaucrats
America is being suffocated to death by red tape. You are about to read about an 11-year-old girl in Illinois that had her cupcake business brutally shut down by government bureaucrats. Her name is Chloe Stirling and her crime was doing something that we used to applaud young people in America for doing. Instead of sitting on her sofa and watching television all day, she actually started her own business. And it turned out there her little business started thriving. In fact, it started doing so well that a local newspaper took notice of it. Well, that is when the control freaks swooped in and took her business away and banned her from selling any more cupcakes. The really sad thing is that people are being paid to do this with our tax dollars. All over America, little entrepreneurs are having their lemonade stands shut down and are being banned from selling Girl Scout cookies, and our tax dollars are paying the people that are doing it. As I wrote about earlier this month, the level of economic freedom in the United States is at an all-time low, and it gets worse with each passing year. The country that so many of us love is dying, and it is being replaced with something that I like to call “the USSA”.
In the Union of Soviet Socialist Americans, you have to have a government “license” or “permit” to do just about anything. If the government does not give you permission, you can get into a whole lot of trouble.
Little 11-year-old Chloe Stirling must have thought that this was still the nation that George Washington and Thomas Jefferson once founded, because she dared to actually start a business and sell cupcakes to the public. Little did she know that she would soon make national news…
An 11-year-old girl from Illinois got a dose of regulation American-style this week when local government officials shut down her cupcake business.
Chloe Stirling, from Troy, got the front-page treatment from her local newspaper, which featured how well her business, Hey, Cupcake, was doing. By all accounts, it was a successful little enterprise. Chloe was getting $10 for a dozen cupcakes and $2 for each specialty cupcake. She even donated her cupcakes when a boy in her school fighting cancer held a fundraiser.
So why did they shut her down?
Well, it turns out that she didn’t have a “permit” to sell cupcakes and her kitchen was not “licensed”.
Like I said, you have to have permission from the government to do just about anything these days.
Another example of this phenomenon that is absolutely infuriating took place out in Fauquier County, Virginia. When a mother held a birthday party for eight 10-year-old girls and posted the photos on Facebook, she never imagined that she would soon be hit with $15,000 in fines…
Martha Boneta owns a small farm in Fauquier County, Virginia, where she recently hosted a birthday party for eight 10-year-old girls. They wore hats, picked veggies, and made goat’s milk soap. The county says she should have obtain a license before hosting such an event and hit her with a $5,000 fine.
Boneta also got slammed with two more fines for $5,000 each, one for advertising a pumpkin carving and another for violations in the small shop on her property. Boneta sells produce from her farm, as well as eggs, yarn, birdhouses, and local crafts. She sought and received a license for the shop in 2011, but the county now says she can’t sell handiwork or produce from her neighbors under that license.
Stuff like this just makes me want to scream sometimes.
What is happening to this country?
A few years ago, my wife used to take old pieces of furniture, sand them down, repaint them and sell them to others. It was something that she really enjoyed doing and she made some extra money along the way.
But if you try doing that in some areas of the country today, the EPA could potentially hit you with a fine of $30,000 for a single incident in which you do not follow the proper procedures. The following is an excerpt from a discussion that some furniture painters were having on Facebook. It is a little technical, but it is worth reading. In this excerpt the identity of the business has been removed to protect the business from overzealous regulators…
As a painter in PA, I am required by law to test everything that I disturb and I must charge the customer $60 for every test I perform which adds up. What the law states in my area is that if I disturb more than 6 square inches on anything made prior to Jan 1 1979 I must test it. Disturbing means, sanding, scraping, or even using a sponge/scuff pad (like you use on your pots) if I disturb more than 6 inches, I must take photographs, document in 4 different logs, I have local, county, state, and federal log books. If I find lead then I must suit up. Originally, the law stated that if there were no children around then you didn’t have to do that however some lame brained legislator decided that if a child enters the premises for more than one hour a day, we must assume they will be in contact with the lead and therefore will contract lead poisoning. Then the legislators decided that if you were over the age of 60 then it didn’t matter, you didn’t have to test who cares if you get poisoned. Lo and behold OSHA stepped in and joined forces with the EPA, they decided that all were at risk including your pets and the leaves on your trees can hold the lead dust and …..well, that’s a whole other issue.
What is happening now is that so many painters decided they weren’t going to follow the lead law, that OSHA and EPA send out secret shoppers. A lot of us don’t even put our logo’s on our vehicles because that invites these shoppers to investigate. If you come to the **** ********, you won’t see signage on the building, you have to get to the actual door of the workroom to know we are there. We no longer have logo’s on our vehicles either as the fines are too stiff. There isn’t one of us that can afford a find of $30,000.00 A DAY, not a year, A DAY.
The government bureaucrats are running wild and the rest of us are just sitting back and letting it happen.
Things have gotten so bad in this country that the federal government even requires small-time magicians to submit “disaster plans” for the rabbits that they use in their acts. The following is an excerpt from one of my previous articles…
Central planning in this country is getting completely and totally out of control. These days, you can hardly do anything without running into a suffocating web of red tape. For example, a small-time magician from Missouri that does magic shows for kids was absolutely horrified when he learned that the Obama administration is requiring him to submit a 32 page “disaster plan” for the rabbit that he uses in his shows. Yes, this is actually true. His name is Marty Hahne, and he thought that it was bad enough when the U.S. Department of Agriculture busted him for not having a “license” for his rabbit. He went out and acquired the proper “license” for his rabbit, but he never dreamed that eventually he would also have to submit a 32 page “disaster plan” for the same rabbit.
You can read the rest of that article right here.
Are you starting to get the picture?
These control freaks want to completely dominate every aspect of our lives. The “nanny state” is entirely out of control and it is up to “we the people” to do something about it.
Barack Obama revealed the kind of mentality that is behind this “nanny state” when he recently made the following statement…
“I would not let my son play pro football”
And without a doubt, the control freaks that run things will try to ban football (or at least “tone it down”) the moment that they think that they can get away with it.
America was supposed to be a place where liberty and freedom were maximized and the interference of the federal government in our lives was supposed to be minimized.
Instead, what we have now is just the opposite.
No wonder Americans consider the government to be their biggest problem.
This article first appeared here at the Economic Collapse Blog. Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here.
Image credit: http://theeconomiccollapseblog.com
Meet “BOSS”: The Department of Homeland Security’s Facial Scanning Program
Ever heard of BOSS? Didn’t think so.
BOSS stands for Biometric Optical Surveillance System, and it is a crowd-scanning program that has been in development by the Department of Homeland Security (DHS) for almost three years now.
Did you catch that? This is the DHS, the ridiculously dangerous, cancerous, gargantuan waste of money our “leaders” foolishly created after 9/11 to prevent “terrorism.” Whereas in the beginning most people actually believed the DHS was there to stop cave dwellers with terroristic tendencies, it is now completely clear that its primary mission is to protect the oligarchs and political criminals from domestic dissent. For example, the New York Times notes that:
In a sign of how the use of such technologies can be developed for one use but then expanded to another, the BOSS research began as an effort to help the military detect potential suicide bombers and other terrorists overseas at “outdoor polling places in Afghanistan and Iraq,” among other sites, the documents show. But in 2010, the effort was transferred to the Department of Homeland Security to be developed for use instead by the police in the United States.
It now should be abundantly clear to anyone paying the slightest bit of attention that the DHS has one mission and one mission only. Bring the degenerate activities we consistently engage in abroad back home for use on “we the people.” You know, to protect us. From the New York Times:
WASHINGTON — The federal government is making progress on developing a surveillance system that would pair computers with video cameras to scan crowds and automatically identify people by their faces, according to newly disclosed documents and interviews with researchers working on the project.
The Department of Homeland Security tested a crowd-scanning project called the Biometric Optical Surveillance System — or BOSS — last fall after two years of government-financed development. Although the system is not ready for use, researchers say they are making significant advances. That alarms privacy advocates, who say that now is the time for the government to establish oversight rules and limits on how it will someday be used.
I’m sure the secret FISA court is all over it.
The automated matching of close-up photographs has improved greatly in recent years, and companies like Facebook have experimented with it using still pictures.
Using fake names on Facebook, Surveillance State, androids
File this one in the ever-burgeoning category of: how insane can legislators get?
Congress is now debating an update to the 1986 Computer Fraud and Abuse Act.
Turns out it’s already a misdemeanor to “exceed authorized use” of a computer, but the DOJ wants to make it a felony.
Of course, what does “exceeds authorized use” mean? Well, it means, for instance, an employee sending emails to pals while he’s at the office—because his employer has a rule against that.
In other words, the feds want to back up employers’ rules and turn them into felonies. Splendid.
“Yeah, you remember Jack, don’t you? Used to work here? One day he made an online reservation at the Wynn in Vegas, and now he’s in jail. Life is tough, keep your eyes straight ahead and don’t mess with the boss.”
“And Betty? She ordered three lipsticks on a slow Thursday and she’s now upstate. I hear the shrinks got hold of her. Dosing her with an anti-psychotic. Hope she has three live brain cells to rub together when she gets out.”
Then there’s the Facebook issue. The company, originally bankrolled by a CIA front, has a rule against users setting up accounts with fake names. Does the DOJ want to go after Facebook users who break the rules?
The Surveillance State, aided by Facebook, wants to know who you are at all times. They want you to be your name and no other name.
It’s a technical issue, see? It’s a lot easier to spy on you if you’re Mary Jones all the time when you’re online. As opposed to Mary Jones and Dragon Lady and HiHat and Ben Franklin and The Beast From 40 Fathoms…
The joke is, most people lead lives that are fictional already. The NSA and its allied partners spy on those lives.
Here’s the same thing from another angle. John Smith, citizen, follows the straight and narrow. He, like every other John Smith, is a target of the Surveillance State. He hasn’t committed any crimes. He isn’t a threat. But that doesn’t matter. He’s there. He’s a unit. Therefore, he’s on the radar.
But John Smith is a fiction. He’s a convenient, solid, average, normal persona/role in the stage play called Society cooked up by the Real John Smith, who is hiding. Inside himself. You rarely see him. Once in a blue moon, he pokes his head out and says something off-key. Then he retreats behind his facade.
There are millions and John Smiths, and the NSA is spying on all of them. The fake ones. The fictions.
What if every John Smith invented six or seven new personae?
“Sir, are you pretending to be somebody else?”
“Yes, and the pretending is now more intense. It’s ongoing.”
“But you see, sir, that introduces confusion, when we spy on you.”
“I used to believe I was a John Smith android forever. Wow, was I kidding myself. I used to go to one church service on Sunday. Now I go to three different churches. And I’m also an atheist.”
“I campaigned for Democrats only. Now I campaign for Democrats, Republican, Libertarians, Communists, and Anarchists. Of course I don’t vote for anyone. I’m exploring monarchy as well. I think the divine right of kings could make a comeback.”
“But who do you actually worship?”
“The NSA, of course. And the CIA and DIA, Interpol, MI-5, the old GRU, and the Chinese Secret Service.”
“Sir, we have you on the record talking to about eight different wives.”
“Only eight? I must have misplaced a couple.”
Some people will assume I mean they should actually marry a dozen women. Those people are the literalists. They always go for the lowest-common-denominator reading. They think if they have a little fun, do a little acting, a little pretending, it might infect their minds. It might take them over. They’re the John Smiths. They live inside walls of fear.
Reality is one fiction among a limitless number of possible realities.
The basic problem with Reality is that’s it’s only one.
Posted by Judy Morris
State Department bureau spent $630,000 on Facebook ‘likes’
State Department officials spent $630,000 to get more Facebook “likes,” prompting employees to complain to a government watchdog that the bureau was “buying fans” in social media, the agency’s inspector general says.
The department’s Bureau of International Information Programs spent the money to increase its “likes” count between 2011 and March 2013.
“Many in the bureau criticize the advertising campaigns as ‘buying fans’ who may have once clicked on an ad or ‘liked’ a photo but have no real interest in the topic and have never engaged further,” the inspector general reported.
The spending increased the bureau’s English-language Facebook page likes from 100,000 to more than 2 million and to 450,000 on Facebook’s foreign-language pages.
Read the rest at the Washington Examiner, here.
What big government does best is spend big money, our (taxpayers) big money. But on, of all things, Facebook likes? I guess they never thought of taking some of that self marketing and promotion money for other uses, such as providing security at Benghazi? I guess everyone has their own priorities, reasons and agendas.
Texas Teen Faces 8 Years in Jail for an Insensitive Joke on Facebook
A very disturbing pattern is becoming evident all across the nation. For a country that has 5% of the world’s population yet 25% of the entire planet’s prisoners, we sure do seem to eager to bump that figure up even higher. My guess is the trend has a lot to do with the private prison system in the country, which means higher levels of incarceration equals higher profits. I think it also has to do with a troubling move toward criminalizing speech and an attack on the First Amendment generally. This particular case occurred in Austin, Texas and nineteen year old Justin Carter now faces eight years in jail for an insensitive joke on Facebook. Thanks to the site Texas Prison Bid’ness, we can gain some perspective on the private prison industry in the Lone Star State:
Now, here’s the story from KHOU in Houston:
Justin Carter was 18 back in February when an online video game “League of Legends” took an ugly turn on Facebook.
Jack Carter says his son Justin and a friend got into an argument with someone on Facebook about the game and the teenager wrote a comment he now regrets.
“Someone had said something to the effect of ‘Oh you’re insane, you’re crazy, you’re messed up in the head,’ to which he replied ‘Oh yeah, I’m real messed up in the head, I’m going to go shoot up a school full of kids and eat their still, beating hearts,’ and the next two lines were lol and jk.,” said Carter.
“LOL” stands for “laughing out loud,” and “jk” means “just kidding,” but police didn’t think it was funny. Neither did a woman from Canada who saw the posting.
Justin’s dad says the woman did a Google search and found his son’s old address was near an elementary school and she called police.
Justin Carter was arrested the next month and has been jailed since March 27. He’s charged with making a terroristic threat and is facing eight years in prison, according to his dad.
Friends and family have started an online petition they’re hoping will garnish more attention for Justin’s plight. You can find it by clicking here.
This is almost incomprehensible. Were his comments insensitive and disturbing? Sure. Would a call from the police to his parents to discuss the matter have been warranted? Maybe. That said, I cannot think of a single reason why this kid would ever spend more than a night in jail for simply doing what many immature kids do every minute of every day. Expect many more cases such as these, as the U.S. fully transitions into a police state economy.
Full article here.
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The Guy Who Used To Protect Your Facebook Data Now Works For The NSA
Last week Mike Riley of Bloomberg, citing four people familiar with the process, reported that thousands of companies work closely with U.S. national security agencies by swapping sensitive trade information for benefits including access to classified intelligence.
Riley’s scoop — along with Michael Hirsch’s report in The Atlantic that Silicon Valley and private defense contractors built the government’s surveillance system — sheds light on the remarkably close relationship between private technology companies and the government.
It turns out there’s also some personnel overlap, as reported by James Risen and Nick Wingfield of The New York Times:
“When Max Kelly, the chief security officer for Facebook, left the social media company in 2010, he did not go to Google, Twitter or a similar Silicon Valley concern. Instead the man who was responsible for protecting the personal information of Facebook’s more than one billion users from outside attacks went to work for [the National Security Agency].”
Kelly’s move from the world’s largest social network to the world’s largest spy agency — which had not been previously reported — makes sense in that both organizations collect, analyze, and exploit reams of data about millions of Americans.
Image added to original post.
In what I would call the debate between a real Libertarian and a part time libertarian, the video says the rest.
Judge Napolitano vs John Stossel Over Severity
Posted by Donald Mathieu
From my perspective John Stossel supports freedom and liberty from a personal perspective based on his own emotions, not on principle. Violations to the fourth amendment, or other amendments, no matter the Constitution, seem to be acceptable to Stossel unless he is personally inconvenienced. No intelligent debate here but always happy to hear Judge Napolitano, who consistently appears as a clean mountain stream surrounded by toxic lakes and rivers.
As always, your thoughts and input are welcome below.
WHICH INTERNET COMPANY HASN’T GIVEN THE U.S. GOVERNMENT ITS RECORDS?
NEW YORK: Outraged Internet users searching for an alternative to the privacy-busting companies they’d trusted are turning to a company that provides what it calls, “the world’s most private search engines.”
StartPage and its sister search engine Ixquick were launched in 2006 to staunchly defend their users’ privacy and civil liberties. StartPage provides a private portal to Google results, while Ixquick provides private results from other search engines.
The services have not participated in PRISM, nor have they ever provided user data to the U.S. government or to any other government or agency in the U.S. or anywhere in the world.
That is more than nine of the biggest Internet companies — Apple, Google, Microsoft, Yahoo, Facebook, YouTube, PalTalk, AOL and Skype — can say.
“The Privacy of our users rests on three important foundations,” explains StartPage and Ixquick CEO Robert Beens. “We are based in the Netherlands, we use encrypted connections, and — most importantly — we don’t store or share any of our users’ personal search data.”
- No User Data Stored: StartPage and Ixquick never store user data, including IP addresses and search queries, so government agencies have no incentive to ask for these. This privacy is so complete; the company doesn’t even know who its customers are, so it can’t share anything with Big Brother.
- Encrypted (HTTPS) Connections: StartPage and Ixquick were the first search engines to use automatic encryption on all connections to prevent snooping. When searches are encrypted, third parties like ISP’s and the NSA can’t avesdrop on Internet connections to see what people are searching for.
- Not Under U.S. Jurisdiction: StartPage and Ixquick are based in the Netherlands, so they are not directly subject to U.S. regulations, warrants, or court orders. They can’t be forced to participate in spying programs like PRISM. The company has never turned over a single bit of user data to any government entity in the 14 years it has been in business, which is not surprising since there is no data in the first place.
StartPage and Ixquick are also the only search engines whose privacy practices have been independently verified and third-party certified through the European Union’s Privacy Seal program.
“Unfortunately, it takes a scandal like PRISM to wake people up to the erosion of privacy”, says Harvard-trained privacy expert Dr. Katherine Albrecht, who helped develop StartPage. “As people get fed up with being spied on, they look for alternatives. We already serve nearly 3 million private searches each day, and we expect that number to grow as people seek shelter from search engines that store and share their private information.”
The company will expand its privacy services this summer with the addition of a new private email product called StartMail. StartMail will offer a paid, private email platform with strong encryption. Anyone interested in beta testing the program on its release can sign up at www.StartMail.com
My choice since mid 2009, thanks to Katherine Albrecht.
Second NSA PRISM Spy Leak Shows Govt, Tech Companies Are Lying to You
A second leaked slide from the NSA’s top secret PRISM operation details how the NSA actually goes straight to the servers of top tech companies like Skype and Google in order to compile your personal chats and information — exactly what the U.S. Director of National Intelligence and major corporations said wasn’t happening in statements made yesterday.
Quite frankly, it looks like The Guardian has absolutely side swiped the Director of National Intelligence James R. Clapper, Facebook, Skype, Google, and a host of others who denied that the NSA PRISM program was directly tied into the tech company servers. More specifically, there was heavy denial in regards to how the NSA spy program actually worked, which is actually now detailed on the second slide. A slide that, at the time of writing this, has not even hit the front of Drudge or other sources. Here is the slide from the top secret PRISM project, which utilizes the top tech companies in order to watch and hold every letter you type through their services:
Image added to original post.