Most Bear Stearns Shareholders

Lost a larger % of their investment than Ginko (et al.) depositors...

Do you think your favorite RL stock or the SL mainland market is more likely to take a 25%+ nosedive tomorrow?

Suddenly, virtual world investing is looking a lot more attractive on a risk/return basis.

this is a irrelevant comparison

Er, because it loses less, and does it quicker?

Crappily regulated virtual market -vs- crappily regulated RL one?

We all know the RL market crash was due to people playing fast and loose, and impossible expectations. Same with Ginko.

No thanks, not interested in either scenario. I lose out enough as it is indirectly, as fools all around me trash the commonwealth of us all by going in for idiotic schemes.

* * * * *

As for the SL mainland market, or even the land market in general, let me put it this way.

If there's money to be made, you'll fall into one of 2 categories:

1) opportunist/skimmer that adds nothing
2) value-added services (I'll even put intelligent arbitrage in this category)

As an intelligent service provider, they will eventually find ways to stop passing out free money to the first category, and reasonably support the second so long as it's beneficial to them overall.

Just saying.

The difference being that in the crappy SL Market, the "Government" isn't stepping in and bailing out the failed Investment houses.

I wish our rl government wouldn't. We just backed JP Morgan in getting the sweetest deal of the century.

Stocks mixed after Bear Stearns deal




NEW YORK (AP) - Wall Street ended a temperamental session widely mixed
Monday after investors grappled with JPMorgan Chase & Co.'s government-backed
buyout of the stricken investment bank Bear Stearns & Co.
The Dow Jones industrials recovered from an initially drop of nearly 200
points to finish up about 21 points. The broader Standard & Poor's 500 and
Nasdaq composite indexes ended lower, as investors bailed out of investment
banks and small-cap stocks and fled instead to large companies apt to be
reliable during a weak economy.
"You move to the defensive names in times of market uncertainty -- safer,
consumer names," said Ryan Detrick, senior technical strategist at Schaeffer's
Investment Research.
The buyout of Bear Stearns was certainly more appealing than the
alternative: letting the investment bank collapse and causing huge losses for
anyone linked to it. And some unprecedented moves by the Federal Reserve gave
investors a bit of solace on what many predicted would be a day of precipitous
losses in the stock market.
Besides supporting the buyout, the Fed lowered the rate it charges to loan
directly to banks by a quarter-point on Sunday night -- two days before its
scheduled meeting Tuesday. The central bank also set up a lending option for
firms, including many non-bank financial services firms, to secure short-term
loans for a broad range of collateral.
The Fed appears to be pledging to do everything in its power to keep the
credit crisis from decimating the financial industry and the economy. Policy
makers at the central bank are expected to reduce the target fed funds rate --
the rate banks charge each other for overnight loans -- by at least a half-point
on Tuesday, and perhaps even a full point.
But the market remained extremely volatile. The sale of Bear Stearns -- at a
minuscule $2.21 a share as of Monday's close, or a total of $260.5 million --
stirred fear among investors worldwide about other banks' exposure to the
troubled credit markets.
"You're going to have some very weak players pushed out of business," said
Joseph V. Battipaglia, chief investment officer at Ryan Beck & Co. He said
JPMorgan's buy of Bear Stearns and Bank of America Corp.'s acquisition of
mortgage lender Countrywide Financial Corp. are probably not the only rescues
the industry will witness during this credit crisis.
According to preliminary calculations, the Dow rose 21.16, or 0.18 percent,
at 11,972.25, after falling nearly 200 and rising more than 100. The Dow was
supported in part by JPMorgan, by far the biggest gainer among the 30 component
stocks. JPMorgan rose $3.77, or 10.3 percent, to $40.31.
The Dow also got a lift as investors aimed for large-cap stocks such as AT&T
Inc., up 76 cents at $35.79, Verizon, up 79 cents at $34.61, and pharmaceutical
maker Johnson & Johnson, up $1.39 at $64.04.
The Standard & Poor's 500 index fell 11.54, or 0.90 percent, to 1,276.60.
The Nasdaq composite index, heavily populated by small and high-tech companies,
fell 35.48, or 1.60 percent, to 2,177.01.
"The market has absolutely no idea what's going on," said Dan Alpert,
managing director of Westwood Capital. "Some people have accused them of
whistling past the graveyard -- I don't think they even know where the graveyard
is."
He added that short-covering -- the unwinding of bets that stocks will fall
-- ahead of Tuesday's Fed meeting contributed to the market's atypical
movements.

------------------------------------
Background info above on "one off" basis for discussion purposes only Not edited or altered in any way including formating as it is copywrite

Bear Stearns is more or less the equal of Northern Rock the failed UK Bank. There are some close parallels with Ginko the failed SL Bank. All three had one thing in common, a failed business model that relied on borrowed and geared money and/or new investors.

The UK and US Government have choose to offer bail out terms to try to protect the financial system, however Linden Labs allowed Ginko to fail completely without any compensation at all

We shall wait and see who is right, Linden Labs or the RL Governments. Second Life is absolutely an ideal virtual modelling device to test out economic theory

John, there are some key differences, though. The SL economy is not dependent upon credit from banks, whereas rl is highly dependent upon banks. The SL economy didn't implode and its effect is limited, since most people keep their money with their own avatars or engage business partners that they trust. It did hurt those who took the risk in this unregulated, ultimately unaccountable market. But as a percentage of the population, few people really lost their shirts. RL is not the same - these losses damages the economy by risking people's livelihoods and their homes, and ultimatelydrives the cost of other things up, and it is felt in every taxpayer's pocket. Not so in SL. The same 250L outfit is completely unaffected by Ginko unless the proprietor lost their shirt in the bank crises, at which point they may charge more to recoup their losses.

The SL economy also doesn't play with derivatives, although the incestuous investment in other financial institutions instead of real SL businesses would be a close but not quite apt parallel. In both, you cannot fully gauge the risk as Midas investing in Ginko would also include the risk of Ginko investing in BNT, HCL, and whatever other holdings. But that is not the same as playing games with the collateral.

SL is a good test case for some economic theories, but this isn't quite the fit.