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

Yes. Backing ad farmers, who can get hundreds or thousands of percent return on their land.

Ginko has not collapsed yet. It's just not letting people withdraw funds. Give the folks with the L$192 million in deposits some hope they can get their money back.

The fact that he has been fairly forthcoming with information about the current crisis and he is fighting to keep Ginko afloat instead of just packing it in and disapearing is a very hopeful sign. But unless he has an ace he hasn't played, sincere effort to make things right still doesn't pay the depositors. Hope for the best, prepare for the worst.

Absolutely astounding!

I think what is really astounding was that anyone actually believed Ginko when they claimed a 60%, with no track record, transparency or method of verfying that they were delivering on the claim.

It reminds me of the days of the internet stock bubble. At that time it was fashionable to be a day trader in stocks (to the point at which even taxi drivers were doing it). If you interviewed them, everyone claimed to be making money and huge returns. Later on in more sober times, studies found that >90% of the traders lost money in the long run.

So the lesson is just because someone CLAIMS to be doing great, ask for the proof. It's amazing how that "success" shrivels when subject to cold hard financial reality.

Are they allowing withdrawals again yet? If so, what is the limit? What's the official latest?

Reuters has a brief story up on what's happened: http://secondlife.reuters.com/stories/2007/07/31/crisis-in-second-life-financial-sector-deepens/

My condolences to anyone who hadn't already managed to withdraw their money from Ginko.

Looks like it from the web page and it's $L5000 per day.

man that does not sound good. Is it just me, or is announcing they are doing a sketchy IPO not the best news you could give a room full of nervous and angry clients?

Casinos could offer a return like that....

One thing they could offer a high rate of return and let your account grow and grow- "officially"

- long as people keep their money in.

Its people wanting to get their supposed big money out, thats the problem.

This interview sheds some more light (or dark) on the subject:

http://virtuallyblind.com/2007/07/30/interview-with-ginkos-nicholas-portercarrero

Sample quote:

VB: I understand, I’m more trying to figure out what your next steps are. Maybe this is a better question: Does Ginko have assets that cover the depositors claims against it right now?

NP: Not in any liquid form, no.

Ginko has now limited withdrawals to 5000l a day.

They haven't shut the doors in face of this bank run, but it is just open a crack.

A peek at their website shows about 63 transactions an hour, so they could be bleeding 300,000L an hour...or 7 million L a day.

I see their deposits are advertised at 170 millions now, used to be 200 million a week or two ago, so the bank run is going at a snail pace.

I wager they lose half their deposits in the next 2 weeks, unless they shut the door completely.

I can't EVEN draw out my 5k.
Though I'm sensing SL problems may be the cause...

No it's because they don't have any L$, they're broke....

One thing that's inaccurate in that article - they talk about the effect of the gambling ban, Ginko and WSE on the economy by citing the amount of money spent inworld has decreased... I'd say that's it's impossible to compare right now, that reduction could be more attributable to the current problems with SL.

The Dead Ginko Sketch

http://forums.secondcitizen.com/showthread.php?t=16901

Well if all these links and the information in them is correct one could possibly draw conclusions based on:

1) Nicholas has stated Ginko does not have liquid funds to repay depositors in full

2) Some investments he has made do show "promise" but they are highly illiquid and if off loaded would need to be sold at a deep discount to the par value

3) A complex not fully explained take over bid by Ginko attempting to purchase AVIX (a SL Stock Exchange) failed, as it would appear the take over bid required the use of AVIS's money to proceed.

4) Decent salary payments to various support people have been paid, which would seem to be material in first life terms, paid over several years

5) The fixed term deposit bonds being offered by Ginko, paying up to 0.2% compound per day, (annual equal around 100%) would possibly appear to be a means to refinance Ginko. I personally fail to understand how they could ever be repaid, but then perhaps I am missing something

6) Nicholas cannot predict when the run on the bank will cease, from that statement one could offer a theory Nicholas cannot magic $L 167 million Lindens from what could be termed as virtual thin air

7) Quite a few people have first life substantial sums deposited within Ginko

It remains to be seen what view Linden Labs and Gov Linden have on this issue

9) At this moment in time it would appear nobody yet has legged it (done a runner)


Anyone else any views

I think this is a good summary from what the articles said..

I have a comment/question on #9 -

Could It be, he feels he doesnt need to bail and disapear?

Theres no way anyone can really get at him. Least he might think so.

He could feel he can weather this and grow the fund again and go back to pay him and his buddies big salaries.

After all the name he gave is a fairly common name in Brazil.

and San Paulo is a city of 11 MILLION people.

Unless Linden Labs gets involved hes going to be pretty hard to track down by American and European lawsuits.

And of course there is allways the possibility that he isnt really who he said he was. Or that records are spottier than were used to in the US and Western Europe.

I`ll not lie i feel a little cheated, but after a year of banking with them i do not think they well rip use off.

I`ll ride out the storm and see what happens. On the other hand if i lose My L (over 700 real dollers) ill not use them again .

I well say if they do *take the L and run* it will look bad on banking in sl. so i feel second life should intervene and set some roles.

Like i said i don`t think they will rip use off,


here is what there web page says
Withdrawal Issues [UPDATED 07/31/07 5AM EDT] 07/28/07 03:54:30 AM EDT
Due to extreme withdrawal volume over the past several days, we are currently unable to process withdrawals in a timely fashion. To help keep things under control, we are temporarily changing all accounts' daily withdrawal limit to L$5,000 per 24 hours until we are able to restock our L$ reserve more rapidly. We may continue to raise and lower the withdrawal limit over the next few days.

This is not a guarentee that you will be able to withdraw L$5,000 a day, it is possible you will receive an error message at certain times of the day while attempting to withdraw funds.

We do expect to return the withdrawal limit back to it's normal L$300,000 per day as soon as possible.

In the meanwhile, please do not contact customer support asking when withdrawals will be returning to normal, unless you have lost funds. Customer support cannot give you an answer, cannot withdraw your funds for you, and will delete your ticket. Our support system is becoming overwhelmed.

-Hinoserm

[UPDATED 07/31/07 5AM EDT] by Hinoserm

it always amazes me when those who have a financial difficulty, or are the victim of another, are automatically labled "ponzi schemers". i personally have never had an issue with ginko, and i have yet to do a "run" on the bank. i will not sit and say im not worried though because i am, but i will ride it out. and if those who have substantial sums invested with ginko arent having a cow, then maybe yall should chill too. in other words stop making a bad situation worse with speculation and hearsay.

My alt (main account ) has a shed load of L$ invested in GF ..along with many others who allso have eight figure sums (some have millions ) .

Its very very possible that we may never see that cash again ... But ! ..I remain optimistic that all that can be done is being done to fix this problem .

grid problems may be playing a part in the error's ... If so .. it's a lucky break for GF as it will allow time to restock fund .

Early this week Ginko went offline and then returned with a 5K limit witch then was raised a short time later to 10 K with a note that the limit will be restored to the former 300,000 .

This tells me that GF are infact " Trying " to resolve this , But with all the panic it has caused a lot of smaller investers trying to withdraw and in-turn raising the panic higher .

I'm confident that that this will blow over and i hope im not proved wrong .

In the meantime we will watch and wait with baited breath and see what the next few weeks bring .


side note : GF have introduced a " term deposits feature " that allows people to lock in L$ for a set amount of time and gain a .20 interest rate , To encourage the use of the new term deposits feature, They have lowered the standard interest rate from 0.13% per day to 0.10% per day.

Both good moves imo ... and allso shows that they are not going to walk away just yet .

I know people will say " why lock in ? " .. The answer is simple .... you cant get your L$ anyway right now ... so locking in you will have nothing loose .... 0 - 0 = 0 .

Good luck to all involved and lets hope we see some more positive moves in the next few days .

Thank you maggie , Thats the point i was allso trying to make ... but you seemed to say it better than me

Big investers are not flinching .... tells me a lot .

Stop the panic guys ... wait and see .

Ok First off

1) hes offering an interest rate (over100% on the term deposit) that is not only beyond current junkbond rates (curently between ~ 9 and 15% for US bonds, and thats includenig bonds for buisnesses that are in bankrupsy) its beyond international junk bond rates. (30%, and again for a company that is currently in bankrupsy)

2) currently the current casino operators have lost a big chunk of the reason to stay open, I suspect (along with a lot of others) that a bunch of them will be "cashingout" and since a lot of thoes properties are on mainlands their just not going to poof when they cancle. others will be trying to convert to other venues, which will be putting a crimp on demand for Retail-rental space or non gameing clubs.

3) LL is making more land availible and in fact has raised the base price for bidding on a lot of land, in fact I would not be surprsed to see a land glut appear soon even without the Gambleing bans efect

4) the biggest monenymakers pre Gambleing ban were gameing and real estate.

5) yet somehow hes going to pay a higher interest rate than previously. . .

well lets see

theirs a 5k limmit(as of just now) on withdrawals

so even if you wanted to and had say a 500,000 investment it will take just over 3 months at that rate to pull the cash out.

Offhand I would say that most of the "big investors" are just waiting to see when they can cash out.