Hypatia Callisto

Copout.

Or is the word "ad hominem" ... even though its a polite one. Just call her crazy, yeah that'll do it!

And for all I know, you're one of the ones who are playing the information asymmetry game with the folks executing market sells and buys. You know, every time I buy lindens I place a buy order just to frustrate those people. Supply Linden probably gets a lot of sales from me. Heh.

Information asymmetry - Wikipedia, the free encyclopedia

Adverse selection - Wikipedia, the free encyclopedia
Moral hazard - Wikipedia, the free encyclopedia
Principal-agent problem - Wikipedia, the free encyclopedia

I documented this problem when the interface first changed to execute market sells, probably according to advice from Lawrence Linden. And now the web interface is even more obscure, so you don't see how to execute limit buy and sells.

But here it is when it was changed.





Here's a gambling game for the peanut gallery...

How high do you think the L$ will go after years of Supply Linden sales, once it's not profitable enough for the speculators just sit on L$ anymore and wait for poor people to execute sales via the market buy or the viewer?

__________________
"To begin with," said the Cat, "a dog's not mad. You grant that?"

"I suppose so," said Alice.

"Well, then," the Cat went on, "you see, a dog growls when it's angry, and wags its tail when it's pleased. Now I growl when I'm pleased, and wag my tail when I'm angry. Therefore I'm mad."

"I call it purring, not growling," said Alice.

"Call it what you like," said the Cat.

Desmond Shang

You very well may have, and that's what scares me. And it's not like I'm going to criticise you much for being egotistical; I've got a very wide streak of elitism myself, and it would be like pots calling the kettle black.

All that said, there are people that make any analysis that you and I have done look like Econ 101, and they have put their knowledge to work and cashed in pretty big. Most of them are too intelligent to post on forums about it, and just quietly work the numbers.

That's not to say they don't leave traces, though. I've learned a lot just by looking at the maps, at the coming and going of regions on the reports (which are awesome) and watching the LindeX like a hawk.

It's also amazing what you can learn if you place a very inexpensive buy or sell order (say about a dollar) at certain rates, and just watch the timing of things. Or put say $L 300k up and watch it finally sell through, while watching the market volume play by play. There are some *very* unusual, undocumented things going on with the currency exchanges; I'm sure of it.

* * * * *

With regard to other issues Hypatia's discussing, one of the last things Zee admitted to was a gentle month over month increase in the $L exchange rate value, from 265 to 264, to 263, 2, 1... and so on. When he left, the exchange remained right where he left it at 258/9.

The claim he made was that he wanted to see people leave USD in the system, as $L were gently appreciating in value. Why he wanted that, I don't know, other than possibly they could make real bank interest on people leaving USD in the system, enough to counter the gentle increase. Maybe the theory was: if it's a big musical chairs game, be the person holding the chair just in case of disaster?

In any case, due to integer math, one couldn't keep moving the LindeX by a point every month; 259 would have become 250, then 240, then eventually it would be $L 1 to the dollar in a decade or so.

__________________

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Argent Stonecutter

And if I have that L$ as US$ credit instead, will they charge me interest on that as well? That would make it hard for me to accumulate the money I need to pay for my account. I guess I could pull it all the way out to Paypal if they did that. But either way, that would reduce the demand for L$, which would reduce the value of the L$... because it's demand that gives the L$ value.

Just making the announcement would cause a crash in the L$.

Argent Stonecutter

I'm not sure what you're showing there. Those two images show the basic and advanced views of the LindeX. There have been basic and advanced views in the LindeX for as long as I've been using it... you have always had to tell it you want the advanced interface to see limit options. It's always been a bit obscure.

Jacquelin Seisenbacher

I'm afraid I disagree. Piracy and theft are the same thing. Counterfeit would probably be a better terminology, as someone suggested in another thread. That is where the original remains, but copies are made without permission, and the copies are passed off as valid. As a point of personal interest, real piracy is some nasty nasty business. Yes, real pirates do exist, and they aren't how tv makes them look. They have automatic weapons and are serious business. So, not quite the same thing as making unauthorized copies of something. Also, and this is a beef I have with companies like Sony et al, it is theft or piracy when you take a physical DVD or CD from a store, but it is not piracy or theft when you make a copy of it. The reason they use the terminology they do is to give it drama. Being a hater of drama and a proponant for using the right terminology, it makes me want to slap them with an old smelly fish.
As to the OP, yes, the words we use to describe this are very important, using words that are too dramatic decrease how people view the seriousness of each case, and contrarywise, using a term like "copybotter" just sounds cutesie, and doesn't covey enough ... oomph.

__________________
"Be yourself, everyone else is already taken" Oscar Wilde

Gigs

I'm not calling you crazy, I really can't make sense of your position in your most recent posts.


Arbitrage isn't a result of moral hazard... or gambling ... or information asymmetry. It occurs as a result of, and as a solution to, incomplete information between markets and between independent parties.

If you can buy L$ cheaper over at SLX and then move them to LindeX for a small profit, then there's either incomplete information, or people are willing to pay the premium to have the L$ straight into there account. The arbitrage dealer, by moving the L$ and rebalancing the markets has eliminated the differences and communicated the price change. The same occurs across the spread on a single market. When the spread blows out by more than the commission amount, there's an opportunity for arbitrage to make a set of trades that closes the spread again and stabilizes the market.

__________________
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"It is the paramount duty of governments and of politicians to secure the wellbeing of the community under the case in the present, and not to run risks overmuch for the future" - JM Keynes

Gigs

It used to always be the "advanced view".

Gigs

Honestly, most of this is econ 101 stuff. Currency markets more than anything behave like ideal little markets on the microeconomic level.

On the macroeconomic level things are a lot more complicated.

That's interesting. I saw the value of the L$ slowly increasing, but I wasn't sure if that was a "command input" or part of natural influence.

Originally, Supply Linden was supposed to let the market find its own equilibrium point, merely limiting the rate of change. I criticized this plan because they had the ability to add inflationary pressure easily but adding additional sinks for deflationary pressure would be much more difficult and have a larger lag. I suggested that it would be easy to cause "pilot induced oscillations" if they did that.

Argent Stonecutter

When? I had to turn the advanced view on in 2006. I think you're misled by the fact that once you turned it on in the account, it stayed on, and you didn't have to turn it on again. Maybe I only remember because I had to turn it on for my alts, when I switched from Argent David to Argent Stonecutter then started using Argent Silversten as my banker.

When they redid the website this setting was lost, so you had to set it again, but new accounts have always had to turn that option on before they could see limit buys and sells.

Desmond Shang

I swear, I think one of the few things Zee did every day (warning: this is speculation on my part) is that I think he watched Supply Linden like a hawk and fine tuned it with regularity.

Note its famous holiday failures when demand suddenly spiked (a rote algorithm would have flattened that flawlessly), it's odd nonsequential market sales injections (by virtue of the weird "spreading out" in time when resident sales process) and the otherwise remarkable ability for Supply Linden to consistently run sliiiightly short, allowing the market to dip a point just for a moment but then kick back up.

Someone's watching Supply Linden close. As well they should, for something that makes so much money out of thin air.

My biggest fear is that one day, Supply Linden will 'break the buck' if for any reason interest in the grid flags a bit, thus losing any traction at all and putting us into some very scary territory. It's the LindeX, ultimately, and that demand pressure for $L that enables me to pay 100k+ USD tier with $L payments.

Once breaking the buck happens... it's going to be very interesting to see the LindeX engine put back on the tracks. It's already starting to happen at there.com; rents for houses (essentially: their form of tier payments) have been coming down. Talk about a huge warning sign of impending collapse...

Gigs

$370,000 USD a month out of thin air, if anyone is wondering.

A 1.5% increase in the money supply per month or so.

Businesses with positive monthly linden flow and logged in users are flat.

Shelly

I don't think it is technically theft because the original item is not taken. I would be inclinded to consider it piracy or couterfeit.

__________________
Lead me not into temptation, I can find it myself

Argent Stonecutter

ARRRRRR!

Hypatia Callisto

Argent, my screenshots are from the date that the basic interface was instituted on the SL website. Take a look at the SPREAD. WOW.

ETA: some people got rich that day. I could have gotten rich that day I guess, but call me an idiot for not wanting to take advantage of my fellow content creators and even the unknowing land barons like that. I feel like its.... theft. However you want to call that invisible hand thing.

It used to always be the advanced view.

And yes, its a classic case of information asymmetry, however you want to dress up your economic astrology.

Hypatia Callisto

Gigs, they changed the website and fucking hid the limit buy and sell that day, and people got caught with their pants down.

And you call that "incomplete information" (I call your answer to this "astrology")

I call it "information asymmetry" as its more accurate.

Others called it "getting cheated".

Argent Stonecutter

Sorry, I didn't catch the date. "Always used to be" lead me to believe you were talking about something that changed recently, not three years ago and after the Lindex had only been open for, what, less than a year?

Hypatia Callisto

Hrm, this is what I said.

I really hate being misquoted.

Argent Stonecutter

OK, I was quoting Gigs, sorry. I misunderstood that your pictures were intended to display something that happened three years ago when they were part of a message that said "and now the web interface is even more obscure". I'm still misunderstanding you and Gigs. What do you mean by "and now the web interface is even more obscure"?

I'm not saying that having to turn on advanced mode is NOT obscure, I'm asking what it is you are referring to as a recent change (if it is indeed a recent change you are referring to) since it's not (as I assumed) what you were showing in those screenshots. I always though "advanced mode" was a bit of a con, yes, but it doesn't seem any more or less of a con now than before the recent change in the website.

Hypatia Callisto

Well, now its hidden under the "Manage" button.

Perhaps its an improvement over the last change, when people really didn't expect how the Market Buy actually worked. But it sits right next to the "Buy L$" button, which is a quick and easy path to "Market Buy" again.

More a bitch than a con... the first change I have screenshots of here really felt like a con to me. It pretty much marks when I started to get sour on the economic management of SL.

Gigs

Who's getting cheated? The people who place market orders?

Hypatia Callisto

Perhaps you should reread them, and also, read a bit more.

Gigs, with respect, I think you've never read an economics book aside from those written by Murray Rothbard and Ludwig von Mises. I am merely rephrasing people I have read like:

David Hume
John Maynard Keynes
Friedrich Hayek
Milton Friedman
Henry Hazlitt
Benoit Mandelbrot

I could quote them all verbatim if you want instead, if that makes you happy?

And now, I am learning more about demurrage by reading

Silvio Gesell

and bits and pieces I can listen to and read of Bernard Lietaer on YouTube and web interviews.

And yea... thanks Archer Braun for the tip on Lietaer (who was one of the Euro's architects), though I think Bernard Lietaer is mostly just a banker with a few good ideas he extrapolated on from others, the tip has lead me to look closer at Silvio Gesell's experiments in Bavaria (these have been mentioned by Friedrich Hayek in some of his essays ... and I should have paid closer attention), and Keynes initial ideas of a global currency incorporating demurrage. Already located the online book for Silvio Gesell's ideas.

Who, the hell, is Silvio Gesell

Lucky for me I can read German well enough to compare if the translations suck Gesell is getting added to my economics aka astrology collection

But anyway, demurrage fees seems to be the kind of sink that SL needs, and Gesell's experiment was really very interesting.

Gigs

Your name dropping does not impress me or contribute anything to this thread.

On demurrage: You don't need literal demurrage when you can cause inflation. The Keynesian strategy of late has been to reduce interest rates (to near zero) while increasing inflation until there's an effectively negative interest rate of return.

Hypatia Callisto

Yeah, those people, when they are placing market orders because they don't KNOW they have a choice to place market orders or make a market buy.

People cashing out that day did NOT expect market sell to work like it did. Most of them who got caught by that had not read the blogs or the forums, and didn't realise what they did till AFTER they did it and said WTF.

Yeah... but that's fine, you can consult your Von Mises/Rothbard astrology chart.

Hypatia Callisto

Yeah, that had an interesting failure last year... anyway, your astrology isn't really very accurate in describing the Black Scholes model.

I described (very briefly) how the Fed works and you can't figure it out? Gee, do you even read their website?

I'm telling you who I am rephrasing. If that doesn't tell you anything, then there's really not any talking to you, you and I have nothing really to say to each other. I read people and then I compare their work.

I didn't even list newer books I have read, such as work from Steven Strogatz on the nature of sync in market fads and stock market behavior.

Desmond Shang

I remember when people were making money hand over fist, in some cases a couple hundred bucks a day on pure arbitrage spreads, when that point spread of the LindeX initially was wide open like that. This was the age of people screaming for higher trading limits, or making alt accounts, because it was essentially free money for anyone able to watch the spread and type in some numbers.

Some very close friends of mine were very involved in this; and all those that were, were *especially* hush hush because for every extra person doing it, the less arbitrage returns there would be for the rest.

I had noticed the possibility personally, but... meh, I didn't because I made a very erroneous assumption. I figured the wide gap would collapse within a day or two, and I wasn't going to rush and hustle for what was ultimately going to be maybe a few hundred bucks before the spread slammed shut (hoo boy was I wrong!).

Every time I thought it would snap shut tomorrow... that wide arbitrage gap just sat there, gaping open. Ultimately I think it was a couple months before it finally closed up, but close it did. Yes, some people made a crapload of money. I wasn't one of them. Ah well.

Maybe I was stupid not to jump in, but in retrospect I was busy building Caledon up to what it is today, and I don't regret that focus at all.

* * * * *

One general rule about the grid... almost *any* significant change leads to an opportunity, somehow. There's almost no significant change possible that can't open an opportunity.

For instance: when sculpties came out, for those who knew how to make a decent sculptie it was cash~in time for a good long while, pretty much at the expense of anyone else trying to do organic shapes.

Anyone not actively looking for these scenarios and ready to jump on them, is pretty much going to miss them. It's amazing how much just a little bit of market investigation and learning a few simple new things can be worth, in the long run, if the timing is right.