Ginko vis-a-vis Northern Rock

Why should LL compensate people for making bad investments?






You have a choice. I have not seen one comment mention that anyone was forced to invest.

That would be a very democratic decision, but I don't see the need for that transparency. How would it help?

Ginko was billed as a bank - not an investment.

People do not generally consider a Savings account in the same catagory as a high risk investment.

Of course it was too good to be true - but people beleived their friends' recomendations.

Just my opinion, I see SL as a game therefore the players in the game should dictate its direction. LL should be there to maintain the grid and enforce TOS.

Whilst it's undeniable that NR overstretched it's self severely ( it would apear massively ), it does at least have a valid income.

Ginko's business model was allways flawed and likely to fail at some point, from memory in this case wasn't it actually triggered by a major theft of funds?

Understand, but i would consider putting money into an account offering intrest rates that high or even a couple of points above my countrys base rate as an investment.

The economy may be more open to such decision as the grid extends beyond LL's control.

http://blog.secondlife.com/2007/09/19/slgarchwg1/

Not exactly what i was thinking but theres nothing like ambition.

It would also be a good idea to consider it a loss at that point. If the fund turns success, then claim income for what is withdrawn.

That would be like an angel investor on virtual reality. Even the grounds of LL had a partial intake as such. That's a harsh comparison, because angels can afford the loss.

When I first saw Ginko, I read it as an investment more than a bank. The liquidity at the ATM made it look just like any other bank in SL. The daily interest is what all in-world banks/financials used as a competitive measure.

That competitive measure seemed to be more popular than a in-world bank that just advertises solid security on savings with interest.

Why would anyone need a bank in SL? The way $L are handled by LL is very similer to a current account anyway. I don't think anyone making a deposit into Ginko saw it as a bank, I would have thought they looked at it as a money making scheme.

Actually no - a lot saw it like a savings account.

People I know well enough to beleive.

Not everyone is savy on investment concepts.


No one needs a bank in SL

- No one needs investment schemes either. The whole concept of non taxed unregulated investments which lie in some shadow juristiction is uneccessary.

Why would anybody sit on their arse and camp an avatar all day instead of actually use SL? Yes, a money making scheme.

If you don't actually add real money to SL, it can be fun to find ways to earn it from nothing. Camp, interest, and sell First Land were all key in the scheme.

The avatar's account works as a bank with no interest (despite lindex trading), but if someone wanted to earn more without a business tier then these were the in-world options.

I'm pretty sure that the extinction of First Land caused some panic before the gambling hysteria. Look at today's land value, however. On my region, some bought first land and turned around and sold it for L$50k/1024sqm, and someone else bought it! I wonder who lost more, the land buyer or the Ginko investor.

Not to LL; to them, it's a business. If it benefits that business to interfere in the economy (as if they didn't already), then why ever not? (That's just an abstract argument, though: I don't really think LL should have bailed out Ginko, given the relatively small impact its failure seems to have had. But really: if instead the economy were gonna tank because somebody made off with some huge percentage of the L$s in circulation--with the result that nobody wanted to be in-world anymore--then yeah, I'd want LL to protect its business.)

Such as when?

Well, that's fascinating, Dzonatos. I don't suppose you could share a few more details about Ginko's sources of income with us.

You know. Just a teeny weeny tiny bit.

Not that it would matter - the UK isnt gonna pack its suitcase and run away in the middle of the night.

I am UK based and support my country but he does have a point.

A clear example is undated gilt stock.

War Loan is the most frequently mentioned instrument. It trades today at around £76.15 per £100.00 bond I think it has interest coupon at 3.5% on par value, that should equal around 4.67% yield.

It was issued in the Second World War (I think) to raise money. People paid that £100 thinking they may get their money back at some point.

Please note no part of this post or thread from me is designed to offer financial advice folks. Just interested in what I see are some obvious parallels between VR and real life in this instance

It's nothing uncommon for governments around the world to issue war bonds. Dzonatas was suggesting the UK is famous for this especially in financial disasters (I'd say WW2 was more of a human disaster than a financial one). Hence I was curious what specific cases she has in mind.

A difference definitely being people paid for those bonds - knowing they were perpetual bonds. They had faith in their government though.

Most of the Ginko Bonds were forced on people in exchange for what they though were liquid savings account balances.

Also, I think comparing Ginko with Northern Rock is fundamentally flawed for two reasons:

1) To ask "Should Linden Labs bail out Ginko?" implies that without a bailout Ginko has failed whereas in fact the exact opposite is the case. As I posted earlier on another thread, back in June 2005 Ginko publicly announced their goal was to be paying around 12% interest per annum within 3 to 5 years. How much are the GPB bonds paying? 12%. So one could be cynical and say they actually achieved one of their goals a whole year earlier than planned.

2) Northern Rock depositors are getting all their money back, Ginko depositors received bonds worth 1/4 of what they had on their accounts at the time Ginko securitised its debt.

Besides from LL's point of view Ginko didnt have any issues at all.

From their standpoint all that happened Nick P was gifted a lot of money from people.

They musta figured he was a popular guy. Or the best Escort in SL.

Yeah and now he's taking everyone for a ride.

I did not lose money in Ginko. I have been warning people about Ginko (and similar "banks" for close to two years now. Continuing to talk about Ginko keeps the issue in the public eye, and helps other people avoid making the same mistake of "investing" in other ponzi schemes masquerading as banks in SL.

Believe it or not, some people care about what happens to other people in their community. I am especially interested in this because I have written and teach a class in SL Consumer Skills for NCI. Along with ponzi schemes, I teach about most of the other pervasive frauds and deceptive trade practices in Second Life. These include: selling free content, business-in-a-box scams, deceptive land prices for island land, land bots, "pump-and-yank" island scams, permission_debit scams, extortion, land griefing, transparent prim scams, pyramid schemes, deceptive boxes, camping chair scams, and sales of fraudulently obtained L$.

Your World, Your Imagination.

How about CGI? Worse than Ginko, yes?

I like to read/hear some of your classes.