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I can understand Apple, Xbox, PS3, iPad, Linux, Solaris, etc. fanbois ... but can't understand the Goldman Sachs variety.

GS is one of the scummiest of Wall Street's firms, which is saying something.

That they were selling MBS tranches to clients, then simultaneously taking out options that would pay GS money when those exact same tranches failed, really tells you all you need to know.

GS' crimes are so varied and so well documented, I find it hard to believe you could not be aware of them.

Simply asking yourself "what part of this investment is something you would expect a commercial bank to invest in" as you reflect that GS is classed as a commercial bank in order to have access to Fed lending at essentially 0% interest, should perhaps give you pause.

EDIT: note for clarification, that the MBS tranches were assembled/packaged by GS themselves; GS was not simply selling a third-party product.

"That they were selling MBS tranches to clients"

Did they tell their clients that these investments were sound? In 1999, I could have called my financial advisor and told him I wanted to buy Pets.com (or whatever) stock. He might advise me against it, but would have sold it to me. And, he might have had it shorted in his personal portfolio at that time without disclosing this to me. Does that make him a bad guy?

Actually, to make the analogy to Goldman closer, your financial advisers wife would be the one actively managing his personal portfolio. And his wife would be legally barred from telling him what positions she held.

http://en.wikipedia.org/wiki/Chinese_wall

Interesting. So, some SEC regulations required there to be a Chinese wall between the part of Goldman which was betting against the MBS market and the portion of Goldman which was selling long to clients? If this is the case, then those complaining of the practice must believe that Goldman had some moral obligation to ignore SEC rules.

A better question is, "what parts of Goldman do not have Chinese walls between them?"

To be fair, some information leaks over the walls. For example, consider investment advice. Within a bank, you have "Investment Advice", and you have !Investment Advice. IA doesn't really get to talk to traders, all they do is provide unbiased recommendations to clients.

However, there is another department, which I'll call "Conflict of Interest Watch" (CIW, the name varies from bank to bank) which tags every report from IA with possible conflicts of interest. So if someone in IA writes a report about Facebook, some computer system in CIW will apply the label "Warning: GS has a business relationship with Facebook." So an analyst can write a report, submit it, and read the tags to determine if Goldman is doing business with Facebook (of course, reading the newspaper is also permitted).

The SEC fines the company $200k per report if they fail to report a relationship and $80k if they report a nonexistent relationship (to prevent companies from just tagging every report as "conflict of interest", a response to Wachovia doing exactly this). A certain investment bank (maybe Goldman, maybe not) is currently devoting tens of millions of dollars to doing a better job of this.

Wow, so those complaining about Goldman's seemingly two-faced behavior are implicitly complaining that the firm was actually following SEC regulations?

I believe the best known of the ones that failed was called "Abacus" - there is a lot of documentation publicly available.

From my viewpoint, representing an investment aas having a particular rating from Moody's or S&P would indicate that they told their clients the investments had a certain ratio of risk/reward.

Common stocks have no ratings from Moody's or S&P; these are interest-bearing investments that supposedly have a certain rate of return per year; though unlike CD's they do not have a fixed lifetime as mortgagees can repay a mortgage early, or refinance, without penalty.

I wasn't so concerned with the specific nature of the investment vehicle in question as it seemed the complaint about GS was simply that they had sold to a client a product which they implicitly had deemed a poor choice.

Not being a securities lawyer I don't have a 100% accurate answer for you; however I would say there is a difference between common stocks which have no performance guarantees and bonds/warrants/etc which do have guarantees (with risk/reward taken into consideration of course).

Umm wrong analogy, unless I've not understood. The difference is that Goldman (analogous to your broker) soliticited you to buy the product Goldman had created. And then having sold it you, bet against you.

In that case, I concur that the practice is questionable. The grandparent had not made this clear.

My theory is that the set of GS fans and the set of Ayn Rand fans is very similar. The appeal of GS to the randroid mindset seems obvious.

(Update: amused by the accusations of blasphemy.)

My theory is that your theory came from not reading any of Ayn Rand's book.

"Randroids" hate the Federal Reserve. Are you at all familiar with Rand's work? Because I can't imagine how you could possibly come to this conclusion if you were.

Note that I have not made any argument in favor of being a "randroid", and I'm not looking to argue with you about whether Rand was right or not about anything. I'm just pointing out that you've made an utterly ignorant statement.

I couldn't be more creeped out by Ayn Rand-ian philosophy, and I like Goldman.

> That they were selling MBS tranches to clients, then simultaneously taking out options that would pay GS money when those exact same tranches failed, really tells you all you need to know.

No, it doesn't. This not necessarily scummy or a conflict of interest. GS could have hedged its own long positions, for one (i.e. still net long). Or GS could even be net short, overall, and still have independent divisions, advisers, or traders who are individually long.

GS' crimes are so varied and so well documented, I find it hard to believe you could not be aware of them

I'm aware of the Abacus incident and something involving a relatively small number of subprime loans in Massachusetts. Since this is hardly variety, I have to ask, what other "crimes" are you referring to? Can you provide some of this extensive documentation? Because in all the time I've been following this crisis, I haven't seen anything else, and would love to learn more.

Caveat--the documentation must be actual evidence of crime.

Concerning Abacus, GS paid $550 million in fines to the SEC, not a small sum.

There is also the $650K fine and the $27 million fine impoosed by the British over the same issue: http://topnews360.tmcnet.com/topics/associated-press/article...

Perhaps I should ask you to comment on the HFT issue, which from some perspectives, appears to be front running of legitimate trades, and which GS is involved in?

There is plenty more, just a few samples from e.g. http://en.wikipedia.org/wiki/Goldman_Sachs#Controversies

include:

1. Insider trading resulting in 2 convictions

2. Helping Greece cover up (lie about) their true debt positions - since Greece is a country, rather than a human or corporation, criminal charges are a near-impossibility;

Further, there are many bloggers who are examining pieces of GS behavior - you may or may not choose to believe them.

Some of the ones that are critical include zerohedge.com and http://boombustblog.com/ run by Reggie Middleton (part free, part subscription).

A TV journalist named Max Keiser, rarely seen on American stations, is also critical; books such as "Chasing Goldman Sachs" also have their own take on GS.

The insider trading happened in 1986, and there's nothing about Greece in that Wikipedia link. I asked for actual evidence to back your assertion, and you linked a non-source and told me to read a blog.

It seems like whenever finance is brought up, the standards for what constitutes information just die. All I need to see is, Goldman can be clearly shown to have done X, where X is either a) illegal or b) unethical according to some standard philosophy of finance[1]. If Goldman is so evil as people say then this shouldn't be hard.

[1] For example, consider the repacking of low quality housing debt and selling collateralized debt based on it. The underlying assertion is that Goldman should have stopped selling them when many of the most sophisticated buyers didn't understand how dangerous they were--to say nothing of the salesmen.

There most certainly is something about Greece.

If you have Firefox as a web browser, I suggest you have a look at the little bar that pops up when you hit "Ctrl + F" ... note the two citations, one for Der Spiegel and the other from USA Today, in the below section...

"" Goldman Sachs between the years 1998-2009 has been reported to systematically help the Greek government to mask its national true debt facts.[72] In September 2009, though, Goldman Sachs among others, created a special Credit Default Swap (CDS) index for the cover of high risk national debt of Greece.[73] ""

By assisting Greece in hiding this information, the apparent level of risk of the debt was lower; people who bought Greek debt as a consequence under-priced the risk. This can be demonstrated by reality, as when the info got out, Greece's cost of borrowing went up rather than going down.

Therefore, GS' involvement in this matter led to investors losing money they otherwise would not have, which is ... unethical.

Helping a country or company withhold information that is known to be material from investors, is unethical.

No different than telling someone the tires they are buying are rated to last 60K miles when actually they are only rated to last 30K, except you have blotted out the big sticker on the tire that states that.

That the SEC, as for example in the case of Madoff, was told explicitly for years beforehand of the fraud, and did nothing, is a matter of public record.

A more skeptical person might therefore wonder what else the SEC is remiss at investigating. However you have the right to be incurious if you so choose.

Okay, I'll admit found the [73] citation the first time I searched, which is hardly indicative of wrongdoing, but I'll repost what I said earlier about the Der Spegiel [72] article in a separate thread:

> "[That article] I have little comment on, because it provides no useful contextual information. Trying to read this account of financial engineering is like trying to read about a science study in the daily paper. All the details are left out, and a newspaper cannot be trusted to get the big picture right. The phrase "special kind of swap with fictional exchange rates", for example, might be accurate, but it just smells like the writer misunderstood a forward contract or something."

I did some more digging and apparently the financial instruments in question are actually currency swaps (which one paper incorrectly calls forex swaps). Currency swaps are a legitimate financial instrument used by governments all over the place, and they come in different flavors. What are these swaps, how precisely are they sinister, and why?

I actually kind this find of stuff fascinating and will probably do more digging today, instead of working. I'd be surprised, though, if it turns out to be anything more than just another swap.

Goldman was scummier than Lehman, how?

I have to agree on your last point regarding average investors. Hard to have sympathy for anyone who buys something at a certain price and loses money.

That being said, it seemed like there were several aspects of "pump and dump", rent-seeking (we can get FB, noone else can, so we charge a totally made-up premium), as well as "make a big transaction at an improper valuation in order to get the inside track with FB's CFO for big fees on other transactions later" to the deal. That's not really how markets are supposed to work..

Meanwhile, it's still damn near impossible to a get a business loan, I hear.

I agree with you, a more public process for creating liquidity in stock would be great.

Unfortunately, while Sarbox may have prevented another Enron/Worldcom, it also prevented/delayed the Facebook IPO. (Interestingly, that's exactly what assorted limited government crackpots were worried about back when Sarbox was passed.)

Eh, putting it on sarbox reminds me of the attempts to blame the mortgage meltdown on Fannie Mae. Way, way too ideologically convenient. I mean, they just picked up 500 mil, I think they could find the resources to do a little extra accounting, even if you're contending that it's an unnecessary burden.

Everything that I can see (as an outsider) about FB's corporate DNA tells me what they want to stay private for as long as possible regardless of whether it costs them an extra 100k in accounting to go public. I mean, they just picked up 500 million. I bet they could scratch up the money to bring in Accenture and have them do a bunch of excel sheets once a year.

I don't really have any solutions, here, aside from some ill-conceived and emotionally satisfying proclamations of "destroy the IPO underwriting industry!". I'm just noticing that, if things are working the way the article says they are, it seems like Goldman's job in this case is all about creating exclusive deals and making insider connections, and very little of it is about evaluating Facebook's proper worth. Although maybe they think they're making a value investment. Who knows.

It's well known that Zuckerberg wants to keep secret much of the information that Sarbox (and various other rules affecting public companies) would require him to release.

I'm sure Facebook could afford several million/year on Sarbox compliance. But what is the benefit to them? As you said, connected insiders (such as Zuckerberg and Goldman's clients) are doing just fine with Facebook remaining private. So why bother with the hassle of Sarbox, potential minority shareholder lawsuits, and liquid markets that might go down more quickly than the current illiquid one?

Well, my contention was that sarbox is a tiny piece of the puzzle, just to make it clear. Closing a few loopholes and adding a few new costs didn't radically change the game to my mind, compared to the already-huge distinction between public and private. Although you know more about this stuff than I do.

I'm certainly not saying that FB is under any obligation to go public if they don't want to. Just that in this particular case, Goldman is primarily trading on them not being public rather than trading on their value. I mean, good for them for exploiting a bug, I guess, but this is why I think the financial industry are, in the large, a bunch of charlatans :)

Besides trying to pivot to a big-government/little-government argument, what specifically is your objection to Chris' comments? It seems pretty plain on its face that SOX materially increases the cost of going public; not simply because of what compliance requires you to disclose, but because of how it directly increases outside accounting costs.

If you want transparency from companies, you have to see them go public. It is not reasonable to demand public-company transparency from a private company. The word "private" means something. If the markets worked today like they did in 1996, do you seriously believe Facebook would be a private company? Why or why not?

I wasn't pivoting, I was pointing out a fallacy.

Fannie Mae and Sarbox are tiny, tiny pieces of their respective puzzles. Blowing them up because it's ideologically satisfying is thinking with your amygdala.

(BTW, the "big government / little government" argument exists entirely in the heads of the ideologically pure. The rest of us are more concerned with the "works / doesn't work" argument, on a case by case basis.)

I'm a near-statist liberal, so I'm pretty sure it doesn't just exist in the heads of comic book caricatures. I take your point about making scapegoats of things like SOX, but "unintended consequences" is part of the core narrative of regulation, even minor regulations (SOX isn't minor), and you're really not answering my question with this comment.

Do you think more companies should go public?

If not, do you think private companies should be forced to be more transparent? Why?

If so, do you not believe that it's become more expensive to be a public company in 2010 than it was in 1995?

I've stated my opinion several times now, and unfortunately it doesn't fit into those questions:

Sarbox's additional costs are a very small part of the equation compared to the fundamental difference between public/private, not to mention all of the costs that existed prior to Sarbox. If you're making the decision to go public or stay private, Sarbox is very unlikely to be a deciding factor. Hence, bringing it up is something of a red herring IMO.

EDIT: In response to below, I haven't read Sarbox, but I'm pretty sure it has no provisions regarding building a new HBase messaging system or online user privacy.

You continue to focus on the cost of Sarbox, but what if the real objection is that increased regulatory requirements would slow down a company that famously has a core value of moving very fast?

Respectfully, I'm pretty sure you need to read up on SOX before you talk so stridently about it. SOX most definitely does increase the costs of going public to a point where it changes the types of companies that do go public. In the '90s, companies went public with little or no revenue. In the 2000s, you can't get anyone to underwrite you until you pass a fairly high 8-figures revenue threshold.

But that's a decision on the part of the person doing the underwriting, right? You're describing psychological factors that have nothing to do with the cost of doing the underwriting.

Are you saying SOX tripled the cost? 10X?

If not for SOX, are you suggesting that pets.com would have a successful IPO today?

Yes, if it wasn't for SOX, I think a lot of companies no more sound than PETS.COM would have gone public. They'd have lots of users, moderate and consistent revenue, but no real prospects.

"8-figure revenue"

Which Facebook has. So why arent they public? Obviously not the monetary cost of SOX. It could be one of the toher parts of SOX (such as the regulations on public company execs) but I find it hard to believe the cost of the accounting department is the reason Facebook isn't public. There are thousands of companies smaller than Facebook being traded every day and they're not going backrupt because of the accounting costs.

Even without SOX, there were a lot of reasons to remain private. On the margins some companies remain private because of SOX costs. (If SOX is preventing useless companies with 0 revenue from going public I see that as a feature and not a bug). But on the scale of Facebook, the costs are not important. So there are other reasons driving this, not SOX.

You're right; Facebook easily can go public. I think the subtext is, had SOX not happened, it's very likely they would already have gone public.

What I'm suggesting happened was, SOX took the IPO mechanism, which was a common and easy path to liquidity for VC, and made it a much bigger deal --- not just because of the regulatory burden that it imposes, but also because it washed out many hundreds of companies that might have gone public instead of taking a C round.

Being one of a small number of standard bearers for tech's return to the public markets is a different thing than being one of the best of hundreds of tech companies at varying stages of growth on the market.

"Sarbox ... also prevented/delayed the Facebook IPO"

Could you elaborate? (I'm genuinely curious)

Sarbox adds additional accounting procedures, with the goal of preventing another Enron or Worldcom, where lax accounting procedures meant that they were telling their investors "everything is fine!" one day and "we're bankrupt, your stock is worthless", the next.

The contention is that these additional procedures disincenvitize companies from going public. My counter-contention is that they're a very small drop in the bucket compared to the pre-existing incentives and disincentives.

> My counter-contention is that they're a very small drop in the bucket compared to the pre-existing incentives and disincentives.

And Facebook isn't exactly "at the margin" either, where that drop in the bucket might make a difference.

It has always been damn near impossible to get a business loan. It was damn near impossible to get a line of credit, even for a business with steady cash flow and multiple years track record, in the mid-late 1990s†. Debt financing for IP-driven businesses whose only physical collateral depreciates at near the speed of sound sucks. Don't blame Goldman for that.

† Unless the companies I was at that tried were doing something wrong, but, before you whip out the snark, I wasn't the one running those companies.

My local pizza shop bought their oven with a business loan. They bought it from the bank, who had repoed it from another bankrupt pizza shop.

I can't tell if you're agreeing with me or not, but the differences between the "pizza shop" and "ISP" scenarios are pretty huge even before you get into the credit and business histories of the business owners. Sorry to be a pedant.

By the way, curious: how did you find this out? When your pizza place gets a new oven, do you just go ask them about how they financed it? Do you ask these kinds of questions of business owners in general? How do they respond?

I'm absolutely agreeing with you - I was giving an anecdote explaining why a bank might consider a business loan to purchase a durable good a low risk investment.

I don't ask questions like this of that many people, but I'm on friendly terms with my local pizza guy. I'm often his last client of the night. He didn't seem to mind telling me about running a pizza place, at least in broad generalities. On the occasions when I've asked small business owners about such things, they are usually happy to talk about it, provided they aren't busy and don't think I'm a salesman.

I have these kinds of conversations with small business owners all the time. Businesses I use on a regular basis or one-offs, doesn't seem to matter, they all seem to be willing to talk how how things are.

I'm not blaming Goldman specifically for that, but I am blaming the whole financial industry. They spend huge amounts of resources pursuing zero-sum games like this, or obfuscatory games like the mortgage thing and, it seems to me, they haven't gotten any better at actually routing money to where it creates value (their purported raison d'etre) since the 1980s. Instead we just see more and more sophisticated games.

I mean, I guess that's where the money is, so shame on us.

What specifically could Goldman do to reduce the risk to a bank of lending money to a small business that will be spent mostly on salaries and (in the balance) on equipment that will be worth 1/10th its purchase price if they need to call in collateral? Businesses are risky. That's why companies finance with equity.

One correction: Goldman did not increase the value of Facebook, just the appearance of their value. Who knows how much Facebook is actually worth? Their profits are tiny compared to the latest valuation. They are up to their ears in invested money. Their business model is showing ads that nobody clicks on. Goldman and the private investors might make out all right. But their recent investment has done little in my eyes to make Facebook more valuable.

Facebook's worth exactly as much as people are willing to pay for it. If Goldman gets people to invest at a higher valuation then they've increased Facebook's value by definition.

Until the bubble bursts...

This is a content-free comment. There may be a bubble, or, the decreased cost of capital afforded Facebook by Goldman's work will allow them to make major strategic investments, maybe multiple where they only could have afforded one, that will drastically increase the value of the company. This "bubblicious" stuff is only valuable if you support it with evidence.

I believe Facebook is overvalued. I cannot provide hard evidence since I cannot look into their finance books, but from what I understand their yearly revenue is about 4% of their latest valuation. I also do not see how their business model can sustain itself, let alone grow exponentially. Yes, they have a ton of users, but they manage to extract precious little money out of them.

Getting back to my original point: I believe FB is overvalued, but apparently someone out there is willing to buy their shares at these prices. Eventually, it will come to light that while FB is profitable, etc. they are not going to grow much and their stock will plummet. Until then, the FB stock craziness will continue.

Two things.

First, have you really done the math on how much money Facebook earns for each penny it extracts from end-users? Do you use Facebook today? I do, and I couldn't tell you what they're really making money on. They don't appear to have turned on the money spigot yet.

Second:

When you cry "bubble", you have to be talking about the market as a whole. It makes less (some, but less) sense to me to talk about there being a "Facebook bubble".

With that said: it's not just about how much money Facebook gets; it's also a question of what Facebook does with the money. During the Internet bubble, companies went public and spent the cash on Super Bowl ads with no revenue, or go-for-broke ship-free-hardware-to-all-of-America schemes. But Amazon was also a product of the Internet bubble. Were they a bad investment?

> First, have you really done the math on how much money Facebook earns for each penny it extracts from end-users? Do you use Facebook today? I do, and I couldn't tell you what they're really making money on. They don't appear to have turned on the money spigot yet.

No. I was talking about revenue, not profit. From the OP: $50B valuation vs projected $2B revenue this year. No idea what they do with what they get to keep.

> When you cry "bubble", you have to be talking about the market as a whole. It makes less (some, but less) sense to me to talk about there being a "Facebook bubble".

FB is a private company. The distinction is that it's a huge company that now major players on Wall Street are trying to invest in. These types of dealings could potentially put Goldman in a compromising position with another bailout just over the horizon. Also, could this trigger a bunch of inflated valuations of other companies in this industry?

You are the first person I've heard that objects to what Goldman is doing because it might harm Goldman.

I'm not objecting. Most of this is not affecting me at all. Just pointing out that Goldman did not increase FB's fundamental value. It's only trying to set up favorable conditions to offload FB on someone else and make out on the profits. The "someone else" may end up getting burnt. In fact I believe that they will get burnt sooner or later. Or possibly, it may be Goldman, who is then going to ask for a second bailout. In either case, it's not my money.

> This "bubblicious" stuff is only valuable if you support it with evidence.

I think it's going to be difficult to get our hands on that until hindsight clears everything up for us a few years hence. There's just too much that we don't know right now.

You could have said the same about Madoff....

Are you suggesting Goldman is using fraud to inflate the value of Facebook? If not, the comparison to Madoff is a nonsensical and inflammatory one.

I think the argument here is that the value of an investment ought to be the net present value of expected future returns on it (which in the case of a stock is theoretically equivalent to net present value of future dividend or stock buyback gains over the lifetime of the stock) If people are buying stock for more than that they're overpaying, whether due to misrepresentation of facts or bad predictions of the future. Unlike consumer goods, there is an objective measure of a "wrong" price[1], and that's one where you have no long term prospect of recovering the income from the share of the company itself, even if you can still profit from selling to other speculators willing to pay more.

[1]albeit not one that non-omniscient investors are ever likely to know

You all seem to be intentionally avoiding the fact that facebook has an intrinsic value independent from its market cap.

Goldman increased the value of facebook stock by 20%. Directly linking market cap to intrinsic value would require the Efficient Market Hypothesis, which I'm pretty sure no one believes anymore.

Exactly, this is all I was getting at. Has nothing to do with fraud.

Then why bring up a company which was overvalued primarily due to fraud? Why not bring up, e.g., Pets.com or AOL?

Look, the parent post stated that if people are willing to buy into a company at a particular valuation, then the company is by definition worth that much to investors. This is false and the Madoff scheme demonstrates it, as would any other ponzi scheme or speculative bubble that has collapsed. If you prefer a different example, write your own post.

In fact fundamental analysis is predicated on the very idea that company value is independent from stock market valuation.

How else can Warren Buffett make so much money investing in undervalued companies if their value is identical to valuation?

Maybe one could say: "Goldman has increased Facebook's price" -- the word "value" has several definitions; the commenter was talking about fundamental value, not net present value...

Their business model is showing ads that nobody clicks on.

And they still make a large chunk of $2 Billion off them?

I assume so. Someone must be misinformed about value/cost ratio of advertising on FB. Sooner or later it will come to light.

You sound very sure. Do you have access to private data?

I must have come off sounding more sure than I really am. No, I do not. Just seems to me that that's what very well may happen.

Heh, that's better. Your original comment makes you sound like you know exactly what you're talking about backed with figures and everything.

"Increasing the value of the firm they are investing in? Great job guys."

Did Goldman increase the number of Facebook's users or add a new awesome feature? Did they address the privacy concerns of Facebook's users? Did they make Facebook experience better for the users? No, no and no.

All they did is increase the "perceived financial value" of the company, which as we know from not too long ago, is intangible and fleeting at best, and total BS at worst (Reminds me of the $100bn "valuation" that 37signals got http://37signals.com/svn/posts/1941-press-release-37signals-...)

As far as I am concerned, Goldman can do whatever it wants as long as its actions don't have negative effects on the rest of us. Internet bubble of 90's hurt many people, and so did mortgage bubble of late 2000s. I don't want Goldman to contribute to and profit from another one of those. How do we make sure it doesn't happen?

No, because GS isn't an engineering firm; they're a finance firm, so what they do is decrease the cost of capital for Facebook's own investments, which might include:

* Rolling up other companies in their space (Yelp, Twitter, 4square, Instagram, Rdio, who knows)

* Buying their way into a strategic but lateral market (search, advertising, mobile, hardware, ISP, who knows)

* Drastically improving hiring and retention by improving comp packages and adding headcount

* &c &c &c

Your comment seems basically nonsensical, suggesting as it does that there is no way to improve Facebook that isn't visible in a commit log.

I also object to the comparison between the Internet bubble and the mortgage bubble; the structural causes of both were different, the underlying value of the tulips being sold in both were different (at the end of the Internet bubble we had, you know, an Internet), and most importantly the mortgage bubble was a financial black hole that sucked every homeowner involuntarily into its gravitational field, whether or not they were jackass speculators.

"perceived financial value" - is there another? All measures of "value" are based on perception.

I don't know about you guys but I'm already seeing Facebook looking more like MySpace in the sense that a lot of people got on, but I see less and less usage by most people in my circle. Of course a few people use it heavily, but the majority of my circle seems to have lost interest.

Just an anecdote.

Another anecdote: I'm using it more. I'm even using a Facebook group to share my wedding plans with my friends. It is really good. And it's completely private.

I killed my account a long time ago and haven't missed it.