Friday, January 07, 2011

Facebook-Goldman Sachs: more hellishness

Simon Johnson has a posted an unsettling warning about the Facebook-Goldman alliance. The gist: as a TBTF bank holding company, Goldman is effectively subsidized by the federal government. Its borrowing costs are lower, and hence it piles on debt, and the risk to the taxpayer.

Luckily in this case Goldman is investing in social networking, one of those things that can only go up in price, never down... just like real estate.

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