All time low for L$?

The Linden dollar is at an all time low on gom as far as I remember. 3.30/1000 wanted, 3.38/1000 for sale. My guess is this is the bottom, and it will be back to 4.00/1000 within a few months.

Don't kid yourself. It'll hit 3.00/$L1000 by year's end.

LF

Considering that there is


A) No statistics to base the value on (at least none I see on GOM), and
B) No regulation in this supposed market...


Its like trading on a market from 1989. I know, my wife and I were MM back in the good old days before the indictments came around.


Quite frankly, this GOM and other various venues, have no way of controlling or predicting value of $L to dollars other than the random person comming in and selling a huge amount at whatever price they want.


It feels like everyone is their own company/corp. with their own company stock being used to sell the same stock of a single corp. Makes zero sense.

Well, we could look at it as an investment opportunity. This is the best time to BUY Lindens seeing as they are so cheap. By buying Lindens it should help raise the price a bit as orders get filled on GOM.

You know what they say...buy low, sell high!

While that is true most of the time, here I dont think it applies in the sense that buy buying low and continuing to sell it will drive the price up. Just look at the selling column. Plenty of money for sale, doesn't seem to be pushing the $l value up.

With no regulation of sales ppl like IGE horde Lindens and dump them back whenever they are out for some quick cash. That basically means you have no idea how much is in float so the pirce could just as easily keep tanking to the bottom.

Without some hard numbers to base the price on I am afraid its a crap shoot, esp since there are more and more ppl pouring into SL because of the basic free deal.

This only adds to an ever potential decrease in money seeing as how every has starter cash and not everyone will use GOM.

Just want to add that GOM's system is completely borked anywho.

If I had 1Mil $L and wanted to sell on their market at 0.01 USD per block, I could. Try that in a RL market and you go to jail. It under values the price of the stock/commodity and throws the market into a spin of going down.

I think this is the trend you have seen over the last month and a half. People comming in and dumping what they have at a lower price inevitably has dropped the price. Now if we knew how many lindens were in float we can see if they are undercutting its actual value, and if they were, this would incline more people to snatch those up seeing as how they would be worth actually more money (based on the float).

This would then drive the asking price back up.

Another thing that would stabilize the GOM is sometype of put/get or options system. Seeing as how there is no insurance of set prices this would be a difficult thing. Again they need some regulation of how many dollars are issued and how many are banked (i.e. still held by the lindens) to even come close to doing such a thing.

Also, having a marketplace full of people undervaluing their own creations for sale does not help. If I make chairs and sell them at 50$ and someone else sells them at 20$, even though the work is the same, that is killing any value the $ may potential have.

In the RL we yell about regulation on imported goods and tarrifs etc... but that is exactly what we seem to need in SL to stablisze the "outside" markets they have established.

Unless of course the Lindens are driving away from any type of RL money taken out of SL.

Heh, I remember seeing it at 60 cents per block of L$250, so USD$2.40 per block of 1K

Eggy, could be. The chart below is interesting and doesn't reflect that though. Alby posted this in the gom forums. I can't vouch for it's accuracy but here you are. Presumably the line going to zero on the bottom left is an error due to gom starting their business.

the thread

Yes, this graph is accurate. It's taken direct from GOMs historical data.

The 'noise' in the first 2 -3 months is due to a small user base settling on a L$ value.
The rise up the big mountain to nearly $5.90 was due to the excitement over snow sims. And then the over pricing of said snow sims (upwards of L$20 a meter) brings it down again.
The huge drop in November 2004 was when GOM switched to L$1000 per block, from L$250.

The remaining fluctuations since then are minor by comparison untill we get to August 2005, two weeks after GOM introduces partial fills and the value accelerates downwards...

And its the partial fills that are killing the value now.

Show me in a regular exchange where partial fills drive a day trade market, they don't unless you are a MM buying up positions for clients.

It's a combination of large "cash outs" emptying the Wanted column, combined with an "I want the money now" attitude to placing orders in the For Sale column.

If people decided to place their Sale orders AT the current price instead of trying to beat it by 1c each time then the fall would halt instantly.

Which is clearly speaking for the mechanism of not being able to set your price.

And partial orders being removed back to all or nothing would weed out anyone attempting to place huge blocks for sale at lower prices then the current get.

Stop trying to argue with supply and demand. This is the right price based on the underlying factors, but overlaid and modulated by the effect of confidence.

Look at the waiting GOM trades. Unless something unexpected changes, it's going on down to 3.30 and beyond. Below that, there is not much support visible until 3.07.

IF this matters ( and I think it does, if only because change is bad regardless of the actual value) we all need to demand LL action now. First, to alter expectations and boost confidence with a powerful and determined announcement. Second, with monetary measures to change the underlying factors. They are totally in charge of the underlying factors if they so decide. For either side to deny it is naive.

There ya go, 370k @ $3.40 so someone "in a hurry" place 3k @ $3.39

Are they realy so desperate for $10 they can't wait and place their order at $3.40?


The fall continues...

Are you replying to something I said?

I ahven't once mentioned supply and demand....

Quite frankly it is obvious the current market price has nothing to do with supply and demand.

If ppl were demanding more $L and go to an external resource to purchase them, the price would definately go up. That is not hte case here.

It is apparent that there are a lot of people who already have a stockpile of Lindens and are offloading them through GOM driving the price downwards.

I think the problem is one of LL not having more stringent demands on ingmae purchases (raise the upload fees, higher taxes, more % for land purchases), and maybe lower the money given for dwell.

As has been said many times in many threads already I am sure.

The fact is there needs to either be a sinkhole for $L in game, or more regulations on cashing $L out of game to bring the actual exchange rate to anywhere it should be.

A temporary fix for this would be to limit the participation of how many blocks you can sell.

Instead of being able to sell 1 block @ whatever, you could adjust how many blocks you were able to sell at the current rate, or make a bare minimum amount of blocks you could trade at all.

Something like 10 blocks minimum.

This would at least eliminate the lamers who come in and do what you said, sell 1-2 blocks at a penny under current price.

Hell I even think 10blocks min is too little. I would say 50blocks and up to start. Quite frankly you shouldn't even be in the market at all unless you can meet a min amount of cash fluidity, like in RL.

You want to trade online, go ahead, bare min 2k to open a day trade account. Going with that figure @ current rates would put your "buy" in at slightly over having 500k lindens to sell.

Granted that maybe slightly too high, but it is an obvious way to weed out the stiffle attempts.

Has it not been pretty well accepted that partial fills simply increased the efficiency of trading and the equilibrium price now more accurately reflects market desires?

This is a question of honest "academic" curiosity as I don't track this much and I neither buy nor sell L$.

And that's the problem. I think it's clear the the available supply of L$ for sale has far outstripped the demand. This is causing downward price pressure, as *the demand for L$ at the offered price is not sufficient to maintain that price*.


That's the flip side. We now have the situation where people don't care to demand L$, and so the price is going down to meet what demand does exist. The curve works both ways.


And where should it be? The principles of an open marketplace suggest that the exchange rate is whatever a buyer and seller agree it should be. That's what GOM does -- brings together buyers and sellers to agree on a price. If the price "should be" something other than what it currently is, the market will move there, and speculators will make money off it. I think the market is currently *moving* to where it should be, given the long neglect of the growing problems with the in-game economy by LL. Until the money supply is properly regulated the exchange rate will likely continue to drop.

Again.... Same as above but this time just 1k @ $3.39

Why?

Because it's first come, first serve. So putting it on 3.40 means you need to wait till the 157k put there before your 1k has been sold.

I know this, but are they so desperate for $3.27 (after commission) that they can't wait an hour or so if they post at $3.40?

Are these infact the very people that are complaining the L$ value is dropping?

I really don't understand the puzzlement here. The price on GOM is almost by definition the correct price, determined by the underlying factors (LL's choosing) and modulated in the shorter term by confidence and expectation (our reactions, analysis, fears, hopes etc).

The only way in which we could speak of this price as "wrong" would be on the basis that confidence and expectation were making seriously faulty judgements.

Perhaps because of misleading information, or through ignorance. I might agree the latter could be having some influence. Otherwise, isn't the "ratings cut" big enough it should have had some visible effect ? I too am to ignorant to be sure.

The puzzlement on my part is that "everyone" (a few exceptions) is complaining that the L$ is dropping like a brick, and yet it is only dropping because "they" continue to place orders lower and lower in price.

I have never argued that L$ is too expensive or too cheap. I just don't understand how selling 1k can be so urgent that the poster has to undercut everyone else.

I don't know if it's a minute, an hour, a week or a month.
The people selling probably like to play it safe. If there's a way we could easily see and understand the 'average buying speed'. That would maybe convince people to sell for a different ( higher but could also be lower) rate.

(And yes, i know 'blocks traded' is visible, there's no easy way to turn that into a 'waiting time')

You can never put an accurate figure on waiting time, no.

But to give an example, over 200k has sold in the $3.40 bracket in the past hour. Those 3k and 1k orders would have been filled by now without tempting more people to place orders at $3.39 - $3.38 - $3.37

Trading is not too bad .... $$


but 206k plat will only get you $46 US

where 50K L would get $170 US ?

but I can buy 50K plat for $27 US

Don't mind me..... just a goof mumbling...... confusion sets in,

*wanders away leaving the economics alone.....*