Stabilization Of L$

Y'know Alexander, that is a pretty durn BIG fundamental. Take the "rules" away from the stock market, and the whole thing blows up. The big cats win and the little guy goes bankrupt. You say that is the "only" thing GOM is suffering from, lack of regulation. That's a pretty big ONLY, isn't it?

Just for the record, I'm tired of folks telling others to go read books. Do you honestly think no one else reads? There are others out here who know how the system works, just like you. Why, some of us have even gone to COLLEGE! *GASP* So please, give us a break.

I'm somewhat amused by folks who point to the stock market as a guide for conducting business on SL. As far as I can see, throughout history the stock market has been one of the most unstable, volatile, unequitable systems I have ever witnessed. It's basically a way for the power brokers to become richer and it is so full of potential abuses that the Fed has to have all kinds of rules in place to even keep it marginally legal... and even then people abuse the system.

Do we really want SL to be modeled after such a system?

Or would it be better if we tried something a little different, a little more equitable, a little less prone to abuse?

I am assuming you are talking about the partial fill system that GOM has placed? If I am wrong please explain what you are talking about.

But if I am making 100k a week, than selling them quickly would be to my best interst. If I can sell 100k at 3.75, or sell 50k at 3.90 a week, which is better for me?

Well, I can think of one set of rules GOM doesn't have in place.

If you'll go visit GOM now, you'll see someone trying to buy about 250 million L$ at 1 cent each. You'll also see some folks trying to sell 1 block at about a gazillion dollars. Such stunts just cluttter up the board and make it difficult to run any reasonable statistical analysis on the system.

Yet GOM has nothing in place to stop "absurd" orders.

That's just one.

An idea just popped into my head which was so simple that I just had to go DUH. Was wondering if this has occurred to anyone else...

Let's say a big dog decides it wants to artificially inflate the value of the L$ so their company can make a killing. There are a few who could do this... IGE, AnsheChung.com... any one of the high-L$ barons.

If they were to place several good size sell orders on the market undercutting everyone else... say L$ at $3.50/1000... they could scare everone else into artificially driving the market low.

Then when eveyrone else on the block started selling out their hard-earned L$ at a loss, the big dog would buy them up like crazy. Then once the big dog held a majority of the L$, start selling those lowballed L$ at a premium.

Hmm... interesting concept. I haven't thought it all the way through, but I thought it might be fun for the bunch of us to consider.

But were does that stop, what about the orders at 2.00? Or maybe the order at 2.50? What about 3.00? What defines an "absurd" order?

I am not saying that GOM has a perfect market, just that markets will always set the price, not some fixed price system.

K Dnate, let's look at all the if's.

IF you make 100k a week. (How many people make that kind of L$?)
IF you need to sell them quickly. (Most SL folks have regular, weekly emergencies?)
IF you can sell 100k at $3.75 (probably on Ebay, because on a revised GOM, you'd have to force yourself to accept $3.90 for them. )
IF you absolutely could not sell 100k on GOM.
IF you absolutely could sell 50k however...

You see, that's a lot of ifs. To be honest, I think you're worrying yourself to death over maybes. I could postulate all kinds of "what if" scenarios that would have absolutely nothing to do with probable reality. Such is a waste of time. If businesses worried over every teeny little maybe, no one would ever risk anything and nothing would ever be accomplished.

Unless the scenario influences a significant number of cases, it's an invalid scenario that while it may, on very rare occasion, affect one or two people, will not affect the population as a whole.

Dnate, absolutely no insult intended, but I think a lot of these these objections you post, you could answer yourself if you'd stop to think about it. No offense, but it seems like you're posting objections without taking the time to question them yourself.

It's obvious that if GOM puts "absurd order" concepts to their system, they will have to define what an "absurd order" is. That might be an arbitrary amount (such as say, 25 cents above or below current market value) or it might be a calculated amount based on average volume shift over the past 30 days. Does that seem like a couple of reasonable solutions?

Those I do like, but then sometimes I like to place orders at a spot and just let them sit, I use it as a holding. I can't spend money I don't see

I think you have a flaw in the fact that you can just set a price. If GOM and everyone else buys at 3.90, what will they sell at? If they sell at 4.00, then I can just come and stay, well, I have 1,000,000L$ to sell, and I will sell them to anyone for just 3.95. Now I am undercutting the "fixed" sell price. Since I am also earning L$ per week, I can most likely keep this up for a while, if not forever. Then there is GOM buy all of the L$ for 3.90, and now I am taking away part of the buying base with my lower 3.95. GOM now is buying more then they sell, thus they are losing money. No company will lose money so either

1) They stop buying
2) They operate at a loss.

If they do 1, then I can come in and say, I will buy all of your L$ you want to sell for 3.85 and then I myself will resell them for 3.95, thus keeping my supply and making money too. If the go with 2, then they do not have a good business plan. Either way, I will still be able to depress the value down. I can do the same type of thing with an upturn too. I can buy at a better price, causing GOM to run out of L$ and then I can sell all my L$ at an inflated price. Don't think either that 1ML$ is that hard for me to have, I have held in cash almost that amount before.

I have thought the same thing before, I bet if you really wanted to this would work, but it would involve heavy risk on the investor part.

Quite frankly, no.

You dont know me, or what I know, but from the decade of MM I did I can tell you I don't really care if the value of alinden is 0.05 cents. I can still turn a profit cause I don't worry about the intrinsic long range value of the $L to US.

And if anyone had a clue they could/would/should clear their positions by days end, including the big guys, because this current setup is so volitile to use a single market, GOM, to make money it ain't gonna happen as quick as they like, or gain as much as they hope.

Any one who knows jack shit will spread their capital around, not pile it all in one place.

If you are currently doing that it really doesn't mean squat to me, as I am still making money and have been for quite while now.






Good. Glad someone did.





All the above stuff you have mentioned has been done before. You are asking for nothing new that the world markets haven't done sinc ebeing started in the 16th century.

As for you idea about setting a fixed value, good luck, doesn't work. Take a look at the 1930's for evidence about letting ppl set their "fair" value on something. The unfortunate thing is, some will be fair, other will undercut, others will overvalue. All that leads right into a depression.

Its called selling short. And is quite easy to do with GOM if someone wanted to do it, on either the bid or ask side.

ask side would require you to have the inital $L stock to sell out to all the positions.

bid side you would need US$ to buy up all the positions.

On either side you would drive the price down or up, accordingly, and they re-buyin a the lower price to sell against the now huge spread.

Nope, no flaw. Let's acid-test your theory and see if it pans out.

*First, you have to have 1 mil L$ to sell.
*Then, will folks do business with you, an unknown, for a mere difference of 5 cents, when they know they can trust GOM? Probably not.
*For you to continue to influence the market, you will have to have an unlimited source of L$... which you won't... so then you'll have to be able to outdo GOMs buying price... which if you're selling at $3.95 you won't have any room at all to wiggle. Basic math.



No one here is discussing GOM buying L$ to resell. The concept is GOM acting as an exchange service, converting L$ to US$ and vice versa. They wouldn't have to buy anything, wouldn't have to stock anything, would never lose on a deal.



You can't depress a value down when someone else is successfully maintaining market stability... at least, not in the long haul. And I'd wager that GOM has more clout than any other service on the market, save for LL themselves. I know a LOT of folks who won't do business with IGE or Anshe, but will do business with GOM. They have a reputation for user friendliness... and that goes a long way in any market.



I'm a merchant (a decent one I think) and I don't do anywhere near that kind of business a week. I doubt that very many do. And that's what they'd have to do to even THINK about entering the L$ exchange market.

No, I believe at this time there are only two forces powerful enough to change the way L$ are traded: GOM and Linden Lab itself. If Linden Lab gets into it... then there will only be one.

That is why we have the current situation:
* GOM, despite the good poeple behind it, hasn't done a good job. They've allowed-- and even promoted-- a volatile currency situation where LL feels it's necessary to take over the L$ exchange market. They've treated L$ as a game-- whereas LL knows it's far more than a game.
* GOM has allowed a situation which allows LL a potential foothold. One way they MIGHT be able to avert this is by totally changing their method of operation and making things so easy for the end user that LL has no need to open in-world currency exchange. Because if GOM continues business the way they are going... good bye GOM. They're doomed. Sort of like the monkey with his hand caught in the jar but refuses to let go of the peanut.

Right now, the only people who are happy about the devaluating L$ are the buyers who never sell anything. All they care about is the low L$ price-- and they don't look far enough ahead to realize that devaluating L$ is soon going to impact them as well as the whole economy, landlords and merchants raise prices to compensate for VERY REAL and STUBBORNLY UNCHANGABLE tier fees. Tier fees don't go down as the L$ decreases in value. So prices have to go up. Simple logic. Either that, or landowners abandon land (which is of serious concern to Linden Lab).

You know, brass tacks here, I've read post after post after post of folks giving reasons why a stabilized L$ is not a good concept-- and been able to tackle every one of those reasons head on. I have yet to see one viable argument as to why a stabilized L$ system would fail.

Like one user said way back there, 'I can't see why people are against the idea of a stabilized currency. It works.'

All I can think of is that a lot of folks still have a case of the "communism willies" and they equate a stabilized L$ value with that concept. They're concerned with wispy concepts of "free enterprise" and "individualism". Has nothing to do with either. Has to do with the basis of trade having a stable and equitable platform so that free trade and consumerism can take place on a more reliable basis. Nothing more, nothing less. I have to agree with that user, just makes no sense to me why people are against it. They don't seem to have a real foundation or truth to their reasoning.

I mean, face it... with LL about to take over GOM and the value of the L$ skydiving... seems to me pretty obvious that the current system doesn't work, eh?

First 1ML$ is not impossible for me to come by, I already have most of that money in one form or another.
How do you think GOM started? They where not always know for what they are now, I would just do the same thing. I know a few people in SL that I have done exchanges with on a limited bases already. I have earned their trust, why can't I do it with everyone else?
I do have an unlimited source, most every day I have more L$ in my account then I had the day before.
Why would I care what the profit margin is, I am still getting more then I would from anywhere else.



So then why is GOM buying all these L$ at 3.90? To exchange, you have to have the goods to exchange with. Where do they get the USD to buy the L$ with then?

Stabilized currency is a great thing to have, but you can't force it by having 3rd party people taking the hit.

I want you to do something before posting about GOM:

www.gamingopenmarket.com

I want you to go to their web site. Do you see GOM giving you a price they will buy at and a price they will sell at? NO! You, I, and any other person that signs up for their service will put a block of $L for sale at the price we want to put it at. Residents are the ones supplying both the USD and $L.

Take a look over at GOM. tonight is very interesting. Someone had a block of 3,600 units at 3.45 - apparently buying that block of L$ was the bubble - and is now driving the price down fast. The other traders have removed their buy orders to make way for the fall now.

Why would someone spend US$12,000 on L$ and then cause them to lose value? I've got to laugh at that move, unless they have far more to buy even lower to make up for their loss. But then they would have still more L$ that they couldn't sell without causing a further price drop.

Someone has a lot of money to lose.

Or maybe IGE is dumping.

Remember that the people selling $L in 1,000,000 chunks have not sold all those $L. People seem to instantly underbid them. If they can afford to risk the loss on a few hundred blocks, it could be worth the blocks they buy later when they remove those huge blocks causing people to think demand has gone up, and then sell high again, until they decide to scare people again and start the cycle over.

With no canceling charges you don't have to only place an order at a price you actually want to sell at.

Would be funny if people started letting these $L1,000,000 chunks sell off without underbidding them, but with this community I don't think that is much of a possibility.

You also forget that the $L will eventually go up
to US$4.00, and so THAT is when they make
their money back... a temp/small loss is no big deal.

Gabrielle

lol, I assume you are being sarcastic. You don't need a US$.70 profit to make money with a US$.02 commision.

People selling L$1,000,000 pretty much never sell them off. It may happen sometimes, but I haven't seen it and I watch GOM quite a few times every day. Those blocks are barriers or wishful thinking. If I was going away for a few weeks, I might place a block of L$1,000,000 at $4.00, more likely a bit less, thinking that it's like buying a lottery ticket. But I would expect that it would still be sitting there when I got back. Small randomly sized blocks at a spread of prices sell far more readily.

Of course.

But mostly trying to point out that if someone
buys L$10,000,000 at $3.50, drops it to $3.00
then it ends up going to $4.00... they have ended
up gaining and not losing anything....

and that says nothing about buy/sell in the meantime.

Gabrielle

Bah, you quoted me before I could delete, was changing my mind on having this commet at all, oh well.

You are correct in what you are saying. I'm just curious of what these large sellers would do if people stopped selling when they posted big orders, and their orders started disappearing rapidly. I wonder how long it would take, before these people pulled these orders off the market.

Ooops...
I wouldn't mind deleting my post for ya... heehee



Dunno... when LL implements buying in the GUI
we'll have to see how that effects things.

Gabrielle

It's interesting that the smaller IGE account has disappeared from the leader board. That is a block of around 10,000,000 L$ right there and I don't see where it went. The other leader board Linden holders don't look like they've absorbed it.

I wonder how often the leader board updates.

I think the leader board updates once a day at about 2am sl time, and it needs to update because someone just dumped about 10 million on gom