The following text is an extract from the Ginko website.
"Please be aware, your withdrawal limit will show as L$0 if there isn't enough available to withdraw. Alternately, it will show you how much you can withdraw given the current reserve available, up to L$5,000 per day. This is a temporary implementation."
Not enough available to withdraw ?
How bad is that ? Ok, they give you tons of warnings when you open your account, and they state there are no guarantees, and so on. Anyway, that sounds bad, especially as this morning, the ATM said my limit is zero !
The website also mentions robots being used to withdraw, which is illegal. But if people was their money back so madly, that's not exactly good sign.
To be able to follow the story, here are present values from the Ginko statistics:
Total in savings deposits: L$154,962,383
Total in term deposits: L$35,223,381
Accounts created in the last 7 days: 322
We will see in the next days if there will be a Ginko collapse or if they will survive. So a few questions to you now. Do you think Ginko will go bankrupt ? Do you use them, and if yes, what is your plan ? Withdraw as much as you can, or do you maintain your trust ?
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3 comments:
http://virtuallyblind.com/2007/07/31/ginko-buying-avix/
Hi JohnLight
Yes, I do think that the future doesnt look so bright for Ginko.
"Ginko has basically no money to pay depositors" or so says the report. As soon as money is deposited, a user may get lucky and withdraw from their account.
Good luck with your mission to becoming a "Second Life Millionaire"
Oh well. Panic is a way to bring any bank — virtual or not — to its knees. No bank on Earth has enough money if everybody starts withdrawing their money from it due to "panics". And believe me, I know, I was a victim of a RL financial institution that closed down due to court orders in Spain, and all its world-wide delegations went crazy when all the people now wanted to withdraw their money... only a percentage was able to do so (I chose to keep the money there, let the court processes go on, and then get repaid — later, after many years — with an interest set by the Government. I found out that the interest is actually slightly higher than what I was getting from that financial institution :) )
RL examples abound, so it's no surprise that Ginko is a victim to people panicking and wanting their money back.
Of course, it all points out to what people have been suspecting all along: Ginko effectively pays interest mostly out of new deposits (ie. effectively just like a Ponzi scheme). Nicholas, however, is very clever with the introduction of the savings accounts at 0.2% daily interest. We'll see if he can manage to sail through this new crisis in peace using that clever trick. Already afifth of all deposits are on saving accounts, which is a good sign — and it means that at least Ginko will survive another month, even with less money and customers.
On the other hand, I just remembered something — people are now transacting wildly at Ginko Financials, and that means a lot of people viewing their site. I've already bought a few ads :)) So, if all goes down the drain, at least it means that I was able to sell some ads — no loss there! Hehe
Alas, if a lot of people, instead of fuming over the inability to withdraw money, will start buying ads like crazy while Ginko is the focus of attention, Nicholas will once more have money to pay for withdrawals... that's why his "Ponzi scheme" is rather clever, it has several sources of income available :) A pity that LL forced him to shut down the lottery, though.
Hi Gwyneth (or Bom Dia shall I say ;-))
thanks for your comment, and for your slog (http://secondslog.blogspot.com/) on which I spent some time after reading your comment.
A remark first about banks having or not the money to pay all their debts. Real life banks are submitted to strong regulations, which force them to have a certain percent of coverage. They also include rules with their accounts stating how much you can withdraw.
Yes, real banks do that as well, but usually these limits are so high that you don't care.
I also liked your remarks about the ads on the Ginko website. But I see two points here. First attracting customers looking at your own death means you will die, so it's a short term strategy.
Secondly, I don't think that someone coming on your website being angry about his money (virtual or not) stored by you will be really attentive to the ads.
But that last sentence contains something wrong when talking about Ginko... when you give some money to Ginko, it's no longer yours ! And this is the difference between Ginko and a RL bank: no guarantees at all !
I'm not complaining about that. I knew the risks when I started using their services. Any people claiming they've been robbed by Ginko shall first re-read their terms of service... and cry.
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