Stabilization Of L$

Well its something I keep a very close eye on, Arbitrage opportunities between GOM and IGE. Any opportunity where I can make some profit because of the differences in prices and I'm there.

Right now theres some opprtunity. Buy on GOM at 3.3, sell on IGE at 3.35. The only issue is the paypal fee to deposit back into GOM which is a problem. Usually need a 10cent gap to make it worthwhile.

See I think you have things mixed up here.

I dont make a single thing/product/service in SL, but I still make money.

What you are decrying is the ability of the trader to be a part of SL. And by trader I mean stock market (et. al.)

So basically I can't play in your universe because it requires you to work at changing prices and monitoring your business??

And I can promise you 1000%, if GOM does what he wants I will immediately open a free exchange market. And if I don't do it fast enough, someone else will.

Stop fighting the inevitable with step-back answers. Think ahead. Understand. Conceptualize new fundimental ways to manipulate the market to your business growth advantage. Stop trying to stifle freedom because you are on the losing side.

Um, yes.

Cause for the math declined.... 1 Mil linden at a 1cent move = 10k US.

That is 10k reasons to find a 1 cent move.

Or do you seriously laugh at the people in RL playing the penny stock markets and making fortunes?

Doesn't IGE already do this? I thought the appeal of GOM was that it was an alternative to the set price of IGE and AN$HECHUNG.COM...

So we'd have 3 services all doing the same thing?

I dun get it.

You know, I wasn't going to add more to this conversation. But then I see a post like this. What incredible propaganda.

To translate the above message:

"I'm a stock market player. I don't really contribute any goods or services to SL. I make my profit from the loss of others. And I love GOM because it's totally unregulated, so we can do things there that in RL would have folks arrested. I can manipulate the market like crazy and gain a lot of money without ever contributing a thing to SL itself. I don't really care what happens to landowners or merchants, so long as I can play the game my way. If you suggest changing that, you're "stifling freedom" (everyone start waving their flags now). So be sure to "think ahead" and "understand" and "conceptualize" (wow, how many other cliche phrases can I pull out of my hat here to indicate you're not already doing these things). And since you want to put an end to market manipulation and I don't want you to do that, you're obviously on the losing side."

Cheeze. First of all, if GOM went set-price you might TRY to open a "free exchange" market-- and you'd be closed down almost as soon as you started because you wouldn't be able to compete with a stable market. You couldn't undersell GOM because to do that you'd have to have L$ aplenty-- which means you'd have to offer a higher buying price than GOM... which you couldn't do unless you decided to lose money in the process. Eventually, you'd run out of L$ and have no way to replenish your source.

I kinda wondered when someone would try a propaganda stunt. Was frankly amazed everyone had stuck to voicing opinions and facts. Just knew this had to come sometime. LOL

Siggy, read about 4 or 5 message back for an answer to this one. Summarization: IGE "sets" their price according to GOM fluxuations. Different name, same game.

What about all the games that aren't traded on the open market, why do they have the same issues as SL? Why is the price dropping for the money of other games? It is because it is market driven. A "stable" market is only stable when the buyers and seller make it stable. A free exchange can, and will compete with your "stable market" system. GOM got it power from an open market, why would any other open market not get the same results?

Actually if GOM went fixed price and Alexander opened a GOM-like system (as it is now) - I don't think he would go under because of those reasons.

GOM doesn't actually buy/sell as IGE does - it holds, much as an escrow does. It doesn't need to replenish any bank of $$$ - as it doesn't 'own' them in the sense that the other 2 services do.

Such a new service would probably become 'the new GOM' with the other (now 3) services adjusting their prices (as they do now) to compete...

Answer: MicroSoft syndrome. GOM was the first on the market, got a strangle-hold on the system, and no one else can get a foot in edgewise. IGE tried, and now (from what the grapevine says) is having to dump bundles of L$ on the market at "let's get out while we still can" prices. GOM is basically a monopoly... a monopoly that LL has announced it is soon going to break. (LOL, then LL can play the monopoly. )

In a pure stock market, I would agree with you -- it's a zero-sum game, and for me to profit, you must take a loss. However, commodities and currency have some additional usefulness outside their representation as ownership of a corporation. Commodities are used in manufacturing and similar pursuits, and currency is used in facilitating transaction of goods outside a barter economy.

In the case of currency exchange -- and particularly in the case of a luxury currency like L$ that nobody will starve or freeze to death without -- as long as you feel you're getting your money's worth, you're not losing. Anybody who does not feel like paying a certain exchange rate has the option of *not* trading, and they're no worse off.

Wayfinder, I think I figured out the differances in what we are saying, you are holding an ideal that works very well on paper, but in practice, it has been shown to fail. I want to be shown were price fixing has worked in the long term.

K Siggy, let's think this through...

GOM decides to declare a "stable market" policy. It sets the L$ at $4/1000. Any seller can sell L$ there for $4/1000 and give GOM a 1% service fee. Any buyer can buy L$ there at $4/1000.

So a competitor wants to get in on the action. He decides to sell L$ for less than GOM in an "open market" method. But who is going to do business with Mr X? They might BUY from him, but they won't sell to him because they can get better rates at GOM. He can't buy L$ from GOM and sell them for less, because he'd be taking a loss. And he can't get people to trade at higher (or lower) rates on his board, because sellers won't sell at lower rates and buyers won't buy at higher rates.

So where's he gonna get his L$ to outsell GOM? Even Anshe Chung herself would run out of L$ in just a coupla weeks.

I fail to see the profitability in such an endeavor. Is there something I'm missing? If there is, I sometimes enjoy learning I'm wrong... especially if that info comes in useful in life. Just give me a working scenario or two in which another company could logically beat GOM if GOM went stable-currency.

Wayfinder,

I am afraid your system is flawed. The market will indeed find its true value. Right now there are over 20 million $L waiting to be sold on GOM. If we were to have a set price, anyone wishing to sell $L would be forced to wait their turn. Presently we have more $L to sell than we have buyers for. This trend is likely to continue, that means the wait time will get longer and longer.

If such a system was implemented, and someone needed RL money fast, they would simply undercut the market.

WHAT?
Most people use GOM rather than IGE because
you get more for your money with GOM.
It's that simple.

If I got more from IGE or Anshe I'd use the other instead.

Gabrielle

Actually, I find myself agreeing with you with the exception of one point:



The ones that are worse off are the large number of merchants (who far outweigh the number of GOM market traders, I would think) who rely on SL at least in part to earn a living. And every time the L$ takes a nosedive... they feel it on their income sheets. Now I can sympathise with the market players who use the market to gain a living. Of course they don't want a stable market. But I empathise with the merchants/landowners more... because they WORK for their bread and actually contribute to the SL experience. Playing the GOM for a sucker punch really benefits no one but the profiteer.

Yah I think there is - it's the whole player X needs to buy L$ thing.. That's not how GOM works..

I *GIVE* GOM my money - then Player Y pays GOM for my money - GOM gives my L$ to player Y and then gives player Y's USD to me..

if my L$ don't sell I can get GOM to give them back to me.. GOM doesn't need to buy L$. So I can't see why a GOM like service would need to either.

This hypothetical new service also wouldn't be setting it's prices - it would be working exactly as GOM does now - where the players set the prices..

Remember - Alexander said he would set up a GOM like service.. not an IGE like service.

Yes, Way... let's think this through...

Mr X is selling content or making land deals in SL and so
continuing to get more $L to sell on his site.

Everyone buys from Mr.X because he's cheaper, but
they all sell to GOM because GOM gives them US$4/block.

Since people give GOM $L and take $US, then soon GOM
has a TON of $L, but not much $US. Bad news.

Soon GOM runs out of $US, because no one's buying
from them which is how they'd get more $US, and
then no one can sell to GOM because they're out
of $US.

The End.

Gabrielle

LOL. Wayfinder stands with his six-shooters in hand. The opposition keeps firing at the same target... but miss Way by a longshot because they're not repositioning their aim...

I find myself answering the same charges over and over again here...



Sure they would. And they'd be welcome to. They can go to Ebay and sell off their paltry 100,000L for 20 cents less than GOM and huzzah! They just lost 20 cents per 1000 that they'd have earned if they could have just waited a coupla more days for it to go through the stable GOM engine. And they'll have almost zero effect on GOM, because their supply of L$ is limited and GOM won't even feel the bump as they continue in their daily track. Even a million L$ sold like that wouldn't be more than a gnat bite on the GOM machine.

So bottom line: so what if someone wants to undersell GOM? They won't do so for long, because THEIR L$ WILL RUN OUT. Yes?

You see, this is where you are showing your lack of understanding...

Day traders rely on a stable market to profit from continuous small trades back and forth. If the market moves there is a 50% chance the day trader will be left with stocks on the wrong side of the movement..

It is the large retailer cashing out that moves the market in big steps.

ALMOST a good scenario Gabrielle. You left out one variable. (And I think several newcomers to this thread are making the same mistake). No one is proposing that GOM "buy" L$. They're nothing more than the middleman. It is impossible for them to lose, because they buy nothing. The do just as they do now-- facilitate the transaction-- at a 1% commission rate.

We're speaking of a hypothetical GOM that just decided to stabilize it's buyer/seller rates at $4/1000. GOM would do nothing more than make the transaction. It is the buyers that buy and the sellers that sell. GOM does neither.

In order for folks to SELL at $4/block on GOM, someone else has to BUY at $4/block on GOM.

However, here is where your scenario comes in. Ms. Landbaron makes a LOT of L$ renting land. So she decides to set up her own exchange in competition with GOM in a "free market" mode. OK, *if* this land baron makes a significant amount of money, then that might present a concern to GOM. Agreed. Maybe.

However, for them to do this, they'd have to get both buyers and sellers to agree this is a good deal. Which brings up two questions:

What seller is going to abandon GOM to make LESS at Ms. Landbaron's site?

What buyer is going to be able to buy at Ms Landbaron's site when there are no sellers?

The only reason I can see that a seller might abandon GOM for Landbaron's site is if L$ sales take a slump on GOM. He takes his L$ to Landbaron's site, in which case the buyer/seller ratio on GOM comes to a closer balance-- benefiting GOM structure. The seller sells his L$ (which sale has almost zero effect on GOM) and then as soon as the seller is satisfied and GOM sales are running good again, the seller goes right back to GOM to do the majority of his selling, because he can get more on GOM.

Logical Conclusion: both buyer and seller sticks with the stable market of GOM. Ms. Landbaron's site does little or no business. GOM prevails.

I believe they mean someone will just create another market that does fluctuate, thereby giving people a choice to sell their money at a reduced rate.

If everyone sells their money for the same price they have to get in line. If someone puts up 12 million like they did today that person owns the market until their block is gone. No one else can sell.

The idea here to not have any requirements to sell. You should be able to set your price for the amount of currency you wish to sell. There should be no restrictions on your price. You should be able to pick your queue point based on market conditions, not based on how long it will take to whittle through thousands of blocks before it gets to your money.

Ah, if that is the case, then that itself is a flaw in GOM structure. We mentioned earlier the idea of randominzing sales with a priority kicker. If GOM is run on a FIFO basis, that is another one of those "not good" things, because it allows someone with 12 million shares to flood the market.

Mind you, here's the bottom line: if GOM decides to continue doing what it's doing... let it. L$ will still sale (albeit at a significant loss). Buyers will still buy (and continue to flood the market with L$). Such will probably continue for some time, merchants will close shop because they get tired of the continual hassle. Linden Lab takes over and GOM closes down because they're sticking with the same old tired method and (unless LL really messes up) GOM won't be able to compete with ingame sales. I mean either way, changes are going to be made. Whether those changes are for good or bad, time will tell.

Actually smartass, I own a SIM and I make profit from a game I host and helped design.

The propoganda you'd like to read wasn't there.

Simply restated, if you have a vested interest in SL, then make it vested. The casual business owner is not going to reap rewards of the system unless they decided to be uncasual.

IOW, change yer prices daily or weekly to reflect the changes in $L vs US instead of comming in here and bitching about the broken systems, doing nothing about it yourself in your own business, and spouting uneducated theories of how it should work with more uneducated guesses on how to manipulate it with mechanism that have been around or tried for over 4 centuries of world market trade.

The big leap for me is that GOM doesn't set a price atm.. if they did they just become like the other 2 dealers.

And if this is the solution - why isn't it happening now? why doesn't IGE just say 'the linden dollar is now 4.00! and all is well?

I think the reason that GOM is a de-facto standard of valuation is because the players are setting the price - take that away and GOM fails to set the price anymore..