Earlier quoted context omitted.
> I'm more convinced that we're in a 2nd bubble now more than ever. I agree. So far I've mostly dismissed talk of "the next bubble", but this pretty much solidifies it. Of course no one knows when the bubble will burst, so I guess investors are making as much money as they can before it inevitably does burst. It's a classic case of the "greater fool theory" http://en.wikipedia.org/wiki/Greater_fool_theory
If this acquisition goes bad, Facebook goes from being worth 100 billion dollars to being worth 99 billion dollars. People don't lose their savings or retirement accounts. To me this just confirms that people who talk about bubbles now weren't here for the last real tech bubble.
This is no different than the real estate cycle in L.A. or South Florida a few years ago, when people would buy and sell condos based on market potential multiple times before the condo was even finished. It all works until someone down the line tries to cash in. It will work for FaceBook and Goldman Sachs, but a whole lot of consumer investors are going to get AOL'd in the long run.