I spent some time today and yesterday looking around for banks in Second Life. Strangely, some of them are offering daily rates equivalent to the ex-Ginko ones. I resisted the temptation to put any money here for the moment.
The remaining question is still the same I already raised in previous post. How can they offer such a rate ? What kind of economical activity can offer more than 44% a year ? If the answer is that they pay interests with the new deposits, their fate will be identical to Ginko's, so I don't really want to renew the experience...
Regarding this blog, you will see that I now opened comments to anyone, not only blogger users. I hope it won't get spammed by commenting bots...
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6 comments:
Hi John, have you got any clue about what to do with your shares on the WSE....im completely stumped as to how it works.....
Hi - the WSE isn't the most user friendly site in the world, but it's not actually that difficult.
Basically, for each 1L$ you had in Ginko, you now have one "Ginko Perpetual Bond" in your WSE portfolio. You will also have a cash balance (in Lindens) which is held by WSE. This may be zero, or it may have a few 'Linden Cents' in it.
You have two choices what to do with your bonds.
1) Keep them. Theoretically, they are meant to pay out 0.03$L every three months, per bond. So if you have, say, 1000 bonds, you will get 30$L every three months, forever. This will go into your WSE cash account, and you can withdraw it into your SL account from a WSE terminal.
However, this means having faith in Ginko being able to pay out on the bonds. They could default, and you might get nothing.
2) Sell the bonds on WSE. You can sell the bonds to someone else. This will get you a fraction of their nominal 1$L worth per bond, which you could then withdraw as above. The upside is that you would have your cash then and there. The downside is that currently people are only willing to pay about 0.20$L per bond, which means you would lose about 80% of what you had in Ginko.
Thank you wayne for this swift and very correct answer to peacefulove question.
I just want to add that additionally to the payout, each bond has a WSE market value. You can place two kind of orders on the WSE.
You can sell your bonds at market price. Your selling order will be matched by WSE to buying orders, and you will get the price the market offers.
The other variant is a "limit" sell order. In this case, you define a minimal price. If the buyers orders are below your limit, no transaction will occur. This allow a protection to you. However, if your limit is too high over the market, you will never sell your bonds.
Hope this helps.
Thanks for that its made everything alot clearer now!
Am I just a little cynical to compare Ginko bonds with "Imperial Russian War Bonds" - issued by the Tsar circa 1914?
Well said.
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