Ginko Has Not Allowed Withdraws For Over A Day Now...

Well thats the thing isnt it?

IF it is a Ponzi --

Ponzis work as long as theres steady stream investors willing to invest money...

So if everyone shuts up and Ginko restores its rep - then it could weather the storm.

The in a year we could be here and its a billion Lindens of debt instead.

---

If its a well convceied but high risk investment scheme outlying the plan should be enough to quiet investors.

The ones who didnt think Ginko was actually a "Bank" anyhow.

Th stories of people needing to withdraw funds to pay their SL bills leads me to beleive a lot of investors DID see it and use it as a BANK and not a long term high risk investment.

After all it has Bank right in the name.

We shall see. Just as an experiment, I added myself to the queue to close out my whopping L$1722 account balance. Number 2003 in queue.

What I'm most concerned about is whether admitting I have (had?) US$6.25 deposited in GF disqualifies me for the Busy Body Committee--they (we?) have all the fun!

You didn't have to be an 'investor' to take a hit on this one.

Try having residents of your sims financially wiped out.

You Ginko customers have my sincerest sympathies. Let this be a lesson to all: if it sounds too good to be true, it probably is.

Agreed Desmond old friend you warned me about this issue some time ago. This might affect other virtual landowners in Second Life too

By way of background for others here my background is in personal finance in the UK.

I well understand how stock markets and mutual funds/collective investments/share trading schemes work but I hold up my hands and openly confess a lot of what happens in virtual worlds is beyond me, because in part it depends on detailed software knowledge, of which I do not have.

In short, and without breeching any privacy, Desmond was one of two people who warned me about Ginko some time ago. He said that despite extensive VR/software knowledge there was no way Ginko could generate the returns it was paying based on VR (i.e not first life/real) techniques. Desmond did NOT express an opinion about first life finance.

In turn I commented it was just possible (in theory) a skilled stock market private investor/trader could generate returns that might just be within the same yardstick as (then) current Ginko interest payments. In fact I know a few people that can and do.


I considered that the most likely candidates for off world Ginko investments might be legal porn web sites, CFD range trading on the markets (CFDs = Contract for Difference) or perhaps the UK legal Betting Exchanges (you can use these to bet on sport events and horse races, the difference being that you can back a horse to loose rather than win)

It now would appear that Ginko may not be doing any of this, or at least has not publicly stated these potential revenue sources are NOT the source of funding interest payments.

I looked at the Ginko web site again this morning. I see Nicholas has reinstated interest payments amounting to around 45% per annum on standard accounts, or a one-year term deposit up to 75% per annum.

I do not see how these payments can be legally generated from deposits

I also note he may be planning an IPO to raise cash...................

People have been saying Ginko is a Ponzi scheme ever since it first appeared, nobody can pay the sorts of returns promised without dipping into new deposits to pay interest on the old. Everyone who deposited must have known, even just at the back of their mind, that one day it would collapse.

To be fair if you had come from a game like EVE online thoes returns would not seem out of place, in fact they would seem a bit low (our corp alone was generating roughly 800% return on investment per week in cash-Ships-modules and ammo for corp members, in fact we used part of our surplus income to pay for GTCs that were awarded to that weeks highest cumulative killpoint leader)

Had Nicholas kept all the investments inworld, backing the land trade, then yes, it would have been possible - but he did not. He invested in "websites" and such, and most of the money is out of world. Not to mention the 100k USD worth of cash in salary to himself and his hires, even when there was no profit.

[11:14] Ginko Financial ATM: Thank you, you are number 2271 in the withdrawal queue. Withdrawals are being processed in the order they are received, as soon as funds become available.

I deposited L$1 just for the fun of it, then tried to withdraw it, and got that message above. I wonder how long it'll take?

Broccoli

Please let us know!

I did this with 2 alts because I wanted to get into the forum

here is the thing. They keep talking about tos. Well in case of lag i repeated the process. I clicked the machine it said stick in your money to open an account. There were NO tos handed to me NONE zero ZILCH. So I put in a Linden and a page opened up still not TOS but on the about us page in small print that was rather hard to read were words to the effect that "this is a bank you can put your money in here make interest and not have it just lying around sitting in your pocket etc and on the very last line of this incredibly small print i read that they "may" have to take your money to invest it in order to produce a return. It was on the about us page. In any event all this malarky about agreeing to stuff before you stick your money in is just that malarky. He calls it a dialy interest account in a bank. The ads say bank. He used his reserve which was too small and one week later there is still no actualy money.


The queue is massive and I could not even get my 1 L out.

/shrug

and this was added to the bottom of the about us page since I put my 1L in to see what would happen

"These accounts not being insured in any way by any government, like in the case of most real life savings accounts, we cannot guarantee that we will never go bankrupt. "


I hate to say it but not matter how much anyone wishes it appears ginko has collapsed. No amount of hushing up will change that if they do manage to recover I will be surprised and it will be good for present depositors but the new ones coming in no nothing about this collapse until after they stick in their lindens. Basically the machine takes your lindens and its gone right now. They still accept deposits but the deposit is disappearing into thin air. I'm sorry but that i way scary.

Hire that kid from that John cusak movie to get your L$ back!

TWO DOLLARS!!

His money has already gone. Nicholas was seen in the Gnubie Store earlier buying some Megabling Stilettos, and a pair of Hello Kitty Luxury Lace Panties.

I"m gonna buy a perpetual bond with it just waiting for the price to drop a wee bit more

The whole idea of banks in SL gave me the willies from the beginning.

Banks make money by loaning it out to businesses/people willing to pay higher interest rates.

If someone borrows money from Ginko, cashes it out and cancels their account, what possible recourse does Ginko have to reclaim their lost principle? Hm.

So, the alternative is they cash out their L$ at a 3.5% penalty and invest the money in RL, oh and then pay taxes on the RL proceeds.

How are they offering 45% interest? By counting on depositors forgetting they have a balance and resident turn-over in secondlife I bet.

Not something I would trust with my secondlife savings. Not by a long shot.

I was on the fence after reading the other 7 threads and 4,231 posts, but you've convinced me. I've decided I'm not going to invest with Ginko. Thank you.

Good one. But I just want to quickly point out that there are 44 innocent SL'ers who happen to share that last name.

There are 33 people in NYC with the last name Ponzi too.

It's a Portocarrero scheme.

Okay. Point taken. You're right.

Yeah the 100K in RL salaries is pretty much adding insult to injury.

Especially when its Quite a large chunk of total deposits before Interest.

Heh. For some odd reason this made me wonder about my government. I pay 15% self-employment tax plus income tax, capital gains tax, sales tax, etc. My government representatives (who set those tax rates and decide how to spend the money) have run up debts that my descendants will be paying for generations. They all make more money than I do.

LOL you may have accidently compared the Ginko man to a politician -

And he was upset over being caleld a Ponzi operator !

You should read how banks in sl operate otherwise you make up a theory of non-backed operations wich not how 99% of the banks in sl operates. With the scenario you presented they'd all be out of business after less than 2minutes.

Yeah instead "Banks" in SL are almost Universally either land trusts, loansharking schemes or modified Ponzis

Actually, as long as the deposits going in are significantly greater than the withdraws going out, a "bank" can operate indefinitely without any backing whatsoever. It's only when something happens to change it - such as a run on the bank - that the problem becomes evident.

Ponzi himself had almost no actual backing... His "sure fire investment", postal coupons, didn't exist in even a fraction of the amount he would have needed to invest in to provide the returns he claimed (There were a few thousand, he needed hundreds of millions). But since people kept putting money IN more than they were taking money OUT, it seemed like a solid plan, because whenever a few people took money out, there was plenty there.

Actually, Ponzi kept enough money around to actually pay back a couple pretty serious runs caused by news reports on his scam. His problems didn't really begin until the government got involved.