What are Ginko Bonds worth?

There are but few in the business of computing that have earned anything like Mitch's reputation for wisdom and integrity.

Just in passing, I'm not quite as certain that printing up L$s to compensate the victims need be a total non-starter. It would be problematic if Supply Linden weren't already using the mint pretty liberally to manage the exchange rate, but as it is, I'm not sure how many weeks of L$ injection would be represented by the whole L$240 million; for that long, yeah, it would debase the currency, but eventually the exchange rate would return to status quo ante and Supply could go back to the LindeX to sell fresh L$s, exactly as if nothing had happened.

As for setting a precedent, by doing it openly (as opposed to just taking over the Ginko Guy's account and fixing it all behind the scenes), it would be a very bad idea *unless* accompanied by a policy change on in-world financial services, as you suggest, requiring registration as RL financial institutions regulated in some G8 nation (or something like that).

But would it fit LL's strategy? Indeed, why didn't they do something like this already? From LL's silence, we gather little information, but it may be that they rather hope somebody will bring that class action suit; LL's never been shy about publicity--good or bad.

Bank in SL ..... *lol*

You took your money from a backed up system which doesnt have that much of a loss.... and GAVE it to Ginko, these guys had no real investment in anything, yet you were happy while pulling in HUGE percentages in profit... so more people threw money at Ginko and they kept on with those huge percentages. Ideally I am not saying that these guys took your money and spent it but they STILL have in world assets that they are hiding behind GinkoTec.

This situation has NOTHING to do with other residents, nothing to do with LL, the Lindens hold the technology but arnt responsible or else Smith and Western or other gun makers would be held accountable for every gun crime EVER. You the investors had the option of leaving your money where it was where there was No interest...... taking it out of world and banking the micropayments for a tiny interest or pissing it against the ginko wall for promisses of RICHNESS BEYONG AVERICE!!!!! im sorry but why should i buy a worthless bond so that you can get your money back, and why should my business get destroyed because greed replaced common sense. I am sincerely sorry to those that lost money a close personal friend on SL lost 500,000 in ginko, yet his attititude was "hey its only money and it was good while it lasted". It goes to show that ginko was being held up by the likes of the gambling market and the downfall of ginko was due to the run when gambling closed....... I feel that the film " Its a wonderfull life " doesnt put Ginko in the same likes of George Bailey. SL has no banking system... has no investment system...no real legal system its all based on trust and faith withpeople you REALLLY dont know.

I would suggest that the BEST you can expect from LL is the ban of Ginko and removal of all assetts, that wouldnt get your money back but would punish those that run the scam *cough cough* sorry I mean bank. At least you have something with the bonds even if they are essentially worthless.

As a final note....

Your money wasnt LOST .... it didnt dissapear from inventory, it was CASHED OUT!!!!! by all of you over time. Its been converted into Dollars and removed from world, therefor expecting LL to print lindens to give the poor people who lost in Ginko is a little like me going to the horse track.... winning for a few races then when i place it all on the final race and loose....expect the rest of patrons to payme my pre race winnings. Ive bought some REALLLLLL crap in SL...things that just didnt live up to the promisses or advertisments but I dont deserve a refund as those systems dont exist in world.... as you have no regulation of financers you have no insurance against fraud or bad managment of investments. Accept that your bonds are ALL you have, or are GOING to have..... I really dont mean to offend anybody nore belittle those that have lost .... but seems a bit whiney when you say...." I made a bad investment .... I made MEGA MONEY,,,, now its all gone .. please Mr Linden can I have have my money back"

QFT!

I don't entirely disagree, and if LL were to do it, it surely shouldn't be to benefit the individual victims of the fraud, but to serve some broader purpose such as maintaining liquidity (which, admittedly, doesn't seem to be anything like the huge problem some had predicted to follow the gambling ban). Such an action would be more analogous to corporate bailouts (e.g., Lockheed, Chrysler, etc.) that were intended to benefit the economy as a whole (or, well, in the case of Lockheed, to keep afloat a supplier of strategic defense systems). I don't really think it's a necessary measure in this case, but it wouldn't have a particularly negative effect on the L$ (since Supply is printing them all the time anyway), and could even serve as an excuse for a much-needed change of policy regarding in-world financial services, and a forced liquidation of all Ginko's in-world holdings.

I wouldn't know the numbers but I suspect that most depositor "losers" are very small losses and some may have lost large amounts of money if they were stupid enough. So the whole body of concerned residents could volunteer to buy up the bonds just for the sake of helping those stupid ones and at the same time make LL see howcold and low grade it is not to cover these losses which were due to their thoughtlessness and noninvolvement policy.




IMO they will not really have any choice. Its as if a kid started a pretend country in his backyard and issued certificates to "citizens" and then issued a currency. No one is going to care unless something goes wrong and then it spills into real life. Then suddenly the government swoops in and asks....what is backing up this currency that people are buying and selling in your back yard?

Unless major revisions of laws happen, Sl currency has to be fictional and should not be permitted to be exchanged for real money, because too many rules are in place in the real world to prevent someone declaring a currency which has no backing in real terms.

I disagree. Ginko had what, 11-12k depositors, and how many millions of L on deposit? I think that there are a lot of small losses, yes, but there are also a lot of large ones for older players who were more invested. The "body of concerned residents" is not a unified person with one account. And the bonds still do not go away. All it does is transfer Nick's debt from one person to another. Personally, it should just die with the ignorant/greedy investor - take the eventual loss, either now or later, and sell it to a shark hoping that Nick will pay the thing back. Let the shark take the loss when Nick decides to pack up and run. That or take legal action. I would suggest that those with big losses go that route, but some of them seem to have the same blind faith or hope that things will be okay. To them, God bless ya, but you deserve what is coming at that point. Take the loss like a man/woman and learn.

snip
Ha, what currencies ARE backed by anything in real life, anymore? The FED, for example, prints dollars like they were silkscreen t-shirts in order to bail out the market. It's not backed by any corresponding resource other than the faith that we will pay our debts back.

You keep saying this and it is just not true. There are no laws against private currencies in the US. If you don't believe me check out these three examples of functioning private currencies:

Ithaca Hours
http://www.ithacahours.org/
http://en.wikipedia.org/wiki/Ithaca_Hours

BerkShares
http://www.berkshares.org/
http://en.wikipedia.org/wiki/BerkShares

Fourth Corner Exchange
http://www.fourthcornerexchange.com/
http://en.wikipedia.org/wiki/Fourth_Corner_Exchange

I don't think a private currency is wrong or not legal per se.

All that really matters is that it has some defined fungible value to both the vendor and purchaser.

For example Gold, the World of Warcraft currency is traded online and Blizzard seem to tolerate it, I believe that (like SL) there are some people within WoW who make a living from the game, and to be fair (and within reason) I have no issues with that. Rare amour sets, weapons, and other valuable loot take a lot of time and expertise to obtain, indeed all who play WoW are aware of the main and secondary auction houses in game where such items are traded (for hard cash) which equals Gold in WoW's case.

A potential Linden competitor Entrophia, has a currency called the Peg which is directly linked to the US dollar, indeed I think it is possible to obtain a first life cash or credit card to convert Pegs to US dollars via your local cash machine.

But all this is beside the point. The Ginko issue does leave a nasty taste, we will have to wait and see what (if anything) happens. Again I am sorry for those who have potentially lost money

I have a feeling Ginko will simply go down as

"Another Internet Scam"


And on that note ~ those who have their lindens invested in these other SL financial "opportunities" should consider theres nothing stopping them from being mismanaged or scams either.

You made the assumption that those invested are too stupid to know the risk. Just because people invested a large sum and found loss does not make them stupid. The risk is clear.

Beyond the risk, it is obvious that the bank run was heavely influenced, and you can't leave LL out of this mess because LL did publish influential media that affected the run.

Here is the bottom line. LL says the Lindens have no real value. That means anything invested in gambling in SL based on Lindens is not illegal because there is no real value being gambled. However, LL comes along and says it won't tolerate it. Even though there are tons of people believing and trusting in the "no real value," LL has created hypocracy over the gambling bit.

Even if a business is not in gambling, we can see businesses being shyed away because of the lack of clear terms on Lindens. LL has created an extremely high risk economy. The risk is higher than what GPB has even created. It is through GPB and gambling that this has come very clear for how extreme the risk is.

If you don't understand than this risk when you put money into the Linden economy, then, for the "sake of helping those stupid ones" (as Rebecca said) we make it plain and simple.

Not really. Ginko was advertized as a bank. It worked like a bank from the depositors standpoint. It got word of mouth as a Bank. It called itself a bank.

the term "Bank" implies low risk. Credible People have stated that even as late as the run, it was possible to deposit money into Ginko without getting documentation explaining the actual risk.

In the real world, High risks investments generally label themselves as such.

Now you can say most people understood the risk. But obviously not all did. A lot of people just choose Ginko becuase their friends told them how great it was.

I can't believe this thread has run 32 pages. Hope dies hard, I guess. I have had some experience with financial markets, and without reading anything beyond the title of this thread, I think I can answer its question defintively, because there have been Ginkos galore in RL for the past 300 years or so of recorded financial history and there will be again, and this whole scenario is VERY familiar - witness the current turmoil in RL financial markets: If Ginko bonds were real, you could use them for wallpaper if they were attractive enough as paper to be decorative, or as toilet paper if they were not. Since they are virtual, they have negative value - the negative value being the cost to you in storage space.

Those who believe otherwise, I have this bridge to sell you, it goes across the East River from Manhattan to Brooklyn, and I and my Nigerian partner who deals with deposed dictators seeking to transfer assets would really like to talk to you, and we would like to sell your contact info to telemarketers and purveyors of mailing lists....

Oh please.

LL instituted a policy that will keep LL functioning, otherwise there would be NO economy to speak of and everyone would lose everything. Did it affect the run? Yes. But Nick keeping a ridiculously low reserve and his unwillingness to liquidate anything generated more fear. It's fear that causes a bank run, not LL's policy. If Nick had quietly liquidated a few assets, even at a loss, to keep people calm and pay off the people looking to cash out, we would never have seen the mass conversion of deposits to GTP.

And LL did not create this "high risk economy" - most of the economy is fairly low risk: products and services are exchanged for L. This particular service, however, is ripe for fraud because it involves entrusting someone to return your cash, let alone with interest. LL didn't create this; they just won't regulate it, due to their laissez faire view of handling resident to resident disputes.

LL is not the scapegoat. But it can and should either ban this financial activity above board, or regulate it to ensure compliance with real world laws.

You left out Nick not outlining all of Ginko's assets to prove the fund was solvent.

My guess - he couldnt becuase it wasnt.

True, I intentionally left that out because him keeping mum was standard practice. He could have kept mum and still kept the fear down.

I also have experience of first life finance.

Personally I think this thread has run on because people want closure. In short this should either never have happened OR should never have been a permitted activity in the first place. In any event this amounts to the same thing.

The situation has been aggravated by previous media comments from Linden Labs (via the CEO), which on the surface would appear to give credence to Ginko. Indeed when I first entered SL about 2 years ago I thought the Ginko operation was either a legal exploit connected with dwell traffic and other virtual SL business activity, or perhaps a combination of this and first life web gaming sites.

A lot of personal research convinced me the risk was unacceptable, but not all here have the experience to decide such matters, and I imply no disrespect. Finance (like software) is complex, and can take time and experience to understand.

I believe this must not ever happen again, and I hope that LL employees (if they are reading this thread) must realise financial services (like gaming) within SL is a nettle they must grasp to prevent further reputation and legal damage

Finally I do not want to be saying "I told you so" if and when the next "virtual bank" goes skint

Obviously and whatever we feel about that is immaterial.

But LL isn't a government, isn't a legal bank, can't print money, has no license to do that. nor is it a legal security. As LL says themselves, the L$ is fictional!

What part of fictional is not grasped here? Its as if someone made a real money scheme using monopoly money and then when park place goes belly up the obvious reality of the scheme shows itself.

Well, this is interesting:



I'll quote from the prospectus:

"We will be investing the cash into high yield positions and disbursing a high rate of interest."

I wonder what those high yield positions would be? Oh, I know.

Silly me!

TGB can't be buying Ginko bonds because their CFO announced that Ginko bonds aren't worth anything (see post #4 of this thread).

Of course, that was when Ginko was still allowed to buy back their own bonds on the open market.

Maybe -

I still think a lot more would have stuck by him if he went

"Well I cant get at your money becuase its tied up in these investments.

But look its all here, dont worry."

- Lists off 750,000$ USD worth of reasonble sounding investments.

The Ginko story is basically this:


Mr. Ginko: Hi Im just some guy on the internets. I want you to send me money.

Investors: Tell us more! Whats in it for us?

Mr. Ginko: Well as long as I make money off of this deal Ill pay you lots of interest. Just dont ask me how.

Investors: Sounds good! Heres our money.


(couple years go by)


Investors: SL is going to hell in a bucket we want our money back now.

Mr. Ginko: (chokes) Ummm. Sorry! fresh out of pocket money.

Investors: But wheres OUR money?

Mr. Ginko: I cant tell you. HAHAHAHA

Investors: But our Acounts supposedly have lots of zeros in them!

Mr. Ginko: Yeah, Ive been meaning to tell you about that. Im getting out of the Bank Business and converting all your accounts into bundles of worthless stocks. HAHAHAHA

Investors: Damn, this sux.




The End.

Exactly.

You know this. Others know this.

Don't say "oh please" at me when you know you can't deny it. That would only be appropriate to say if someone said that LL should repay everyone back for Ginko's fictitious "bank" mistake.

When policy can change or be enforced randomly at will to the benefit of LL then everyone else is at an extreme risk.

It doesn't matter if you were not even involved in gambling at all. It doesn't matter if NP was involved with gambling at all. Others were. Other that created part of the economy flow now suddenly stopped on the ban and the random news by LL. That not only affected Ginko, it also affected other parts of the economy.

Randomly going back and forth between real and not real as for value of the Linden dollar is a severe risk. You know you can't deny this. Look at what just happened.

You can't just blame NP and expect that to solve this.

Yes and john you should probably make some kind of publication of analysis. I think a lot of people need closure and I get surprised to see this thread fronted over and over again. Also I too agree that people have to realize that not everyone holds the same skillset or understanding of things in SL including financing. Some if not many people see these things and look at it with no knowledge beyond what they can see and have simply not got the skills to reason it out because its not part of their education or life experience. Its the same with anything in SL including content creation not everyone has an understanding or education in every area. To assume that everyone is just gillible or stupid is just plain wrong and that is where regulation comes in. LL however probably wont ever be touching regulating things because that is not the role they will ever be willing to assume. They could ban it along with gambling however but that would also likely mean no stock exchanges.

Then what is your point, really, in even bringing up LL? You said LL *created* this high risk economy. I called bullshit. The economy as a whole is not high risk, except for this particular sector - but that is one created by the residents, and it is very much a buyer beware scenario.

I oh please as I wish when people try to impute blame or any measure of responsibility to LL for their own greed/bad decisions. LL had a role, but it was far, far from direct, and in my opinion it is extremely indirect and not worth mentioning. I expect LL to do only one of three things: ban the activity, regulate it, or wait until there is another investigation/lawsuit before they do one of the previous two option. LL has no real liability here for what occurred, but people are looking to impute some kind of blame to them. That's ridiculous. The only thing we should be talking about with LL is asking when they are going to ban or regulate. That's it. Whether or not the L has value is something we all live with and we know that it does have value - otherwise there would not have been a gambling ban, and people wouldn't have to theoretically wait 8.5 years to cash out their L.

As has been stated pages and pages back, there is no real solution to this particular situation because the money is gone out of world, long gone. Rather, the only solution is to take legal action, and no one seems to be willing to do that. Fine. It's your money. I hope you risked only as much as you were willing to lose.

I can and would and its obvious that no single individual has lost a large sum of money and if they have they are being quiet about it and working on tracking the guy down and sueing him.

I also think that those who have lost smaller amounts quite obviously dont care much or they would have grouped up by now and contacted on of the many dozens of lawyers who have a presence in SL.

Human beings however are known for complaining and not acting and this is how people like this guy get away with it. He is the one that did this not LL and unless someone is working in the background right now (which is possible if someone is seriously trying to get this guy and have their money back they would not be saying much to the community) to get his information from LL so they can track him down and drag him into a court room.

as a side effect because I have been posting in this thread and I believe some of my "evidence" has been used with regards to this issue I found myself kicked from the WSE group which i joined long ago with an intention of playing with this stock exchange. Last week I was kicked I have no idea why as I dont say much only read info and hang around at their exchange. When I asked why I was kicked no one has of yet responded, but I found it quite interesting seeing as Nick holds about 35% of the WSE shares. I"M assuming they dont want me to see messages or something. I invest pennies in the WSE and have never caused them any issue except over the questionable practices over what is pretty much a 1/3 partner in that exchange. (I haven't tried to see if i can rejoin the group though cause i just can't be bothered). I'm getting the feeling though that people are working in the background though because I have never had anything against WSE except to question why on earth they would let this nick guy put his bonds up for sale in like 1 post lol

I think something IS happening, but to blame LL no its not where blame lies. The only blame I have for them is that they should have frozen his avatar when this blow up occured but its quite possible no one filed any abuse reports so they have no one actualy going to them over it. Only this endless thread of speculation and "what ifs".