** How to Crash the LINDEX and Profit from it!

Greetings, Preclears!

I'm here to give everyone a quick lesson in what's really going on in the Lindex market today! That's right, it seems that some leading economic minds have figured out a simple way to profit off of your fears! A very out-ethics Thetan, indeed.


1.Seed the bottom of the graph! - Buy high! Buy about L$10,000 at 251, and sell it at 265. This manipulates Linden's graph to display a quantity at the low end. Don't do it all at one amount! No sir! This will make people think "Oh! It's only one person cashing out! No big deal!" - By all means, distribute your "seeds" between 265 and 261/1US$! This way it'll look more like a market concensus. And it only costs about US$1 per seed! A fine, fine investment for the return that's coming!

2.Post in the forums to get the emotions rolling! - Ah, the Reactive Mind! The next step is to post that the "L$ is dropping precipitously - you better cash out NOW!" This causes people to run to check the graph and, my stars! By golly, there's a whole bunch of sales at the bottom of the graph! SL's Leading Economic Mind was right! Better cash out now! Cue: fear, emotion, and other things that would make your e-meter needle rockslam!

3.Watch the impetus! - Since they're nervous about the market dropping even further, these poor wogs will jump on the emotional bandwagon to get their L$ sold - QUICK! So what will they do? They'll sell at the very bottom range of your "seeds" ! It's a wonderful feeling when a plan comes together, isn't it?

Now that people are selling at the bottom end of your seeds, for a while, the downward trend will only pick up more steam as people see the "new" (manipulated) average price of the Linden! More people will panic, and more people will begin selling around or lower than your seeded "low" price! Now would be a good time to post yet ANOTHER thread, speaking of how, even though you have no idea why, this trend is indeed very frightening and disturbing, and you better cash out everything now and weather the storm!

4.Buy low! - Why, you've just made a market for you, you genius you, to cherry-pick! Pick a price and begin buying low -- buy much more L$ than you seeded with at this low price! Because you're about to get rewarded for your hard work!

5.Stop seeding, sit back and wait again! - Sellers who think that this is a temporary 'bump' will hold. Eventually, after you've bought the amount that you wish, and wish to profit on, the market will 'eat away' at the bottom end until it reaches equilibrium in the mid 250s/L$ again! And once it does,

6. PROFIT! - Time to sell those hard-earned lindens at the new, "recovered" equilibrium price! Hey, you've just made an easy US$100-$200 depending on how much you bought at that lower price! A post to the forums that would help now is, "The market is recovering. I reccomend waiting until it reaches equilibrium at L$252/1US again". After all, you are SL's leading economic mind. They'd be foolish not to listen to you!

Just a quick tip from your friendly neighborhood Source. Enjoy your Beingness,

-Hubbard

P.S. IM me for an excellent "ZX4 Attack Heli" helicopter - NO CHARGE! That's right, FREE! Thats a full L$500 less than at some "discount stores" in SecondLife!

Hubbard Thetan - Your Bridge to Bargains!

Great post. I also suspect the very same.

The same thing happens in the stock market. Except it's worse there because short selling (borrowing shares from someone else and selling them) is easier, and because naked short selling (attempting to sell shares that don't even exist, which is illegal) can cause huge price drops and massive panic.

Trading is inherently risky, but most of the risk is caused by panic. Once you realize this, and learn not to tie up all of your money in L$ or whatever it is you're trading, you see that price drops, even large, devistating price drops can represent excellent buying opportunities for everyone except those who panicked and sold at the low.

I'm still thinking about your post - but I must say...

Your name is hilarious.

Awesome thread.

I've always suspected this myself. Nice analysis.

As SL's Leading Analyst of Threads Entitled "** How to Crash the LINDEX and Profit from it!", I say bravo, Hubbard Thetan, bravo!

Say, does anyone wanna join a cult?

btw, are you a lapsed Scientologist in RL?

So, why should it go back to 250 again? If anything it should go to 300+

Ricky's analysis is pretty good, I think, that en masse (as a crowd) people are 'farming' the stipend, whether they know it or not.

The only thing this manipulation will likely do is weaken the L$ permanently. You'd be pretty irrational to throw your L$ away like this.

Hubbard's outline is a simple version of how "stock operators" worked Wall Street quite openly back before the Securities Exchange Commission was created to try and put some controls on market manipulation. In the 1920's, markets were hot and volatile.

One of the biggest "operators" got out just before the Crash of 1929. He had been very successful, but was increasingly concerned that there were fewer and fewer inexperienced traders entering the market who could be easily stampeded into buying when he wanted to sell and selling when he wanted to buy. He knew it was time to liquidate when he started hearing his bootblack giving him advice on particular stocks, and at what prices to buy and sell them, and how the market was "for sure" headed higher.

For those interested in more insight into the manipulation of thinly-traded markets, read Edwin Lefevere's "Reminiscences of a Stock Operator" (1923). "Although Reminiscences was first published some [80] years ago, its take on crowd psychology and market timing is as timely as last summer's frenzy on the foreign exchange markets." -- Worth magazine. The fictional and quite readable account, written by a journalist who was also a short story author, is generally regarded as about the real-life stock operator Jesse ("The Great Bear of Wall Street" Livermore, who made and lost huge fortunes several times and ultimately took his own life. http://en.wikipedia.org/wiki/Jesse_Livermore

Frank

What a cynic!

But it wouldn't surprise me in the least.

Well said.

I'd be shocked to learn that your "lesson" has any basis in fact, whatsoever, lol. In my opinion, various fundamental and technical analyses lead to only one short-to-mid term conclusion for the L$. Down. It is possible that someone is ALSO trying to play games, but I don't think this is going to have a lot of bearing on the underlying facts.

By the way, this seems like pretty wild speculation. Are you offering any facts at all to back it up? If not, this post should be qualified as "your wild opinions about what's going on in the lindex market today" rather than "A LESSON about what's really going on in the lindex market today".

Why is everyone afraid of speculation?

I think the analysis was interesting, if incorrect.

Still, It would be interesting to know if it is many people or a small number who have been recently flooding the exchange.

There's more plausibility in that post than in the nonsense our Top Economically-Run Brain posts.

Silly question? what would happen if someone decided to do the same thing while you were doing it and they under priced you? Wouldn't they rake in the profits?

I agree that what is being discussed happens, but I think 10,000 $L would never do it. That's a bit small on an over 3 million $L / per day volume. Now there are those that already have more than 3 million $L, and if they decide to do something like this in cycles, I believe it has already been done and worked.

I personally remember noticing some accounts losing their money on the leaderboard, huge blocks of $L temporarily sitting on the GOM market that were not selling, because others would step in and sell lower in panic. I then remember this post coming out:

/invalid_link.html

then the million blocks that had been pressuring the market magically disappeared. Someone else noticed the same thing here:

/130/cf/63305/1.html

I think this only works in a panic stage anyway. You need people wanting to cash out so bad that the large blocks you pressure with will not sell, but be underbid by the desperate. The situation when what described was occuring happened when people were speculating that the Linden Labs run currency market would crash the market instead of boost it. If the market is pushing upward on its own, putting huge blocks for sale at low prices should lose you money. On the other hand, I don't think it is absurd to think that abnormal rushing to sell would not be pushed further down than normal by a big $L holder forcing them to sell lower and lower to get a sale.

People have likely shifted their priorities for US$ verses $L. The holiday season is more expensive, so even if they aren't the ones cashing out, they could be the ones not buying. There is likely going to be natural downward pressure as we move toward Christmas. If you don't panic, there will be cheap $L to buy later, and an inevitable bounce up that will make you money without you having to purposely crash the market. Though I would be suprised if no one tried to help push the price down when its wanting to go down anyway.

I've got no problems with speculation. I just think it's lousy of someone to label their speculation along the lines of "a lesson in what is really happening in the market right now". The origional poster seems to be holding themself out as some type of virtual economic authority, rather than some person venting some possibly wildly inaccurate opinion which isn't backed by much of anything. It's just this "economic lesson" vs. "my opinion" mentality that I take issue with.

Of course, the same can be said of the comments of some of SL's other top economic authorities on this topic. I don't mean to be exclusionary here.



True. It is an interesting set of opnions.



I think it would be great if we could view some statistics along these lines.

What is the plausibility that the moon is made of green cheese? Please check out my soon to be released eBook, "A Lesson in What the Moon is REALLY Composed Of!"

But... but... I read it on teh Internets!

Could it be not true!?


Yet if such action hasn't happened yet, it well could, though perhaps one might have to do it simultaneously on all major currency exchanges.

Perhaps it would take a lot more financial leverage, but if better-than-RL-market returns are easily forthcoming I don't doubt someone will discover it and work it like a pump.

I suspect that manipulating the market would be far easier, and require a smaller 'investment' than say, trying to buy up land as fast as it can be made available for resale.

Just a thought.

I've got no doubt that like RL, someone discovers an L$ trading idea and attempts to work it like a pump every day. But even if the origional poster's theory on someone else's possible trading idea were accurate, what's wrong with that? If LL chooses to provide a 1 sided market and someone comes up with a clever idea to profit from it, how is there any wrong doing there?

LL should provide a 2 sided market with buy orders to cushon the impact of such trading ideas, IMHO, but at the end of the day I don't see anything wrong with trading within the constraints of LL's market. There's probably nothing wrong with posting a little "news" in the forums either really. It just blends in with everyone else's wild speculation.

Just my L$5.32 (2 cents sure is costing a lot more L$ these dyas hehe)

If LL hadn't killed off http://www.gamingopenmarket.com (i.e. GOM), then we would have a two-sided market.

True! I do miss the GOM. I wish that LL (or another resident run company) would provide an exchange with at least AS MANY (ideally many MORE) features. I'd give it a shot but I've already got too much going on hehe.

It would be neat to have at least the GOM equivalent back, plus maybe margin, futures, ability to go long or short, etc.

Actually, I didn't suspect this but a variation. Took me forever to find it, but check out this quote. Read the LAST paragraph :

"It might cost me millions, but I don't care..."

As soon as I read that I suspected not that some economic mind is planting small seeds to temporarily lower the value of the L$,

but

that someone with much greater resources may be unloading larger amounts of L$ into the economy at a low price, while also trying to induce a little panic, with the ultimate goal being lowering/"crashing" the market enough to do some damage to Ginko.

But an L$ with a lower value is a GOOD thing for Ginko. Keep in mind that Ginko has already sold almost all of their L$ for USD. Let's say for example that Ginko sells L$1,000,000 at the rate of L$250 per $1.00 US (LL's stated "target value".

Ginko gets $4,000.00 US for that L$. Now, someone comes along and tries to "crash the market to do damage to Ginko" and the rate crashes to L$500 per $1.00 US. Ginko now uses $2,000.00 US to purchase L$1,000,000 (the same amount they sold earlier), netting themselves a nice $2,000.00 US profit.

I'm sure that they would be very thankful to anyone attempting to manipulate their finances in this manner. In fact, in the scenerio that you've provided, it is most likely that Ginko would be the CULPRIT, manipulating the market in this way in order to buy cheap L$ and pay interest. This is not to say that I find the scenerio likely, OR that there is anything wrong with trading L$ any way that one likes, within the boundaries of LL's market.

Bear in mind - I'm not an economist and yes this is speculation.

What I mean is, if they value of the L$ drops enough, and if people have less faith in the stability of the L$, more people will withdraw money from Ginko.

I can't find the exact quote but I think Nicholas said basically they had converted X amt of L$ to real-world cash and the amt of new-clients and new money coming in was covering the day-to-day influx/outflux, it didn't make economic sense for them to convert any of that real-world money back to L$. Sure, Ginko will be getting a better deal, but converting cash back into L$ while/if a large # of people panic and pull their money out of Ginko means that Ginko has less real-world money to fund whatever project it is they are using to generate such a high rate of return.