So the LindEx Guys?

[Etheria Parrott]

I am hoarding my Lindens. I don't own a sim so I don't need to pay tier so I'm hoarding as much as I can to offset the 15USD process credit fee. Not everyone owns a sim. Other friends of mine are in the same position. I have just offered my hoard at 249. I don't care if I have to wait 6 months or more for the lindex to stabilize but it will sit there waiting until it does.

[Phil Deakins]

My resposes are in blue.

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Prokofy Neva wrote:

Let's go over the facts, shall we? As you are not in touch with them at all.

Au contraire. It is you who is not in touch with facts, as we shall see.

Tyche's preliminary report that there are 1,000 new grandfathered sims, meaning that there were 1,000 buys of the GF IS

NOT

any proof that people took advantage of that deal

WITH EXPENSIVE LINDEN DOLLARS HELLO.

What have grandather buy-downs got to do with any response to me? I've never suggested it as a reason. Also, I already posted that I agree with you, so why are you flogging the dead horse?

The fairy tale that there are all these people who ALREADY owned sims and ALREADY didn't use their Lindens to pay tier, and could suddenly have 142,000 Lindens or more to pay $600 for the grandfather is just that - a myth. Maybe there are a few, but certainly not enough to EXPLAIN the LindEx drop.

What have grandather buy-downs got to do with any response to me? I've never suggested it as a reason. Also, I already posted that I agree with you, so why are you flogging the dead horse?

 

I asked a simple question I haven't heard an answer to yet, although there likely is one: how can Tyche know which sims are now grandfathered? After all, they were private islands already in the stock of SL, already purchased from SL, at the level or class that they provide such servers. Whereas it USED TO BE that the class of the grandfathered sims was lower than new sims for which the Lindens charged $295, that's no longer the case. So how does she know which ones are GF? I'll ask her again.

Even if she is right and there are 1,000, hey, that's not TWO thousand which is what you'd need to have this many dollars trying to leave SL.

What have grandather buy-downs got to do with any response to me? I've never suggested it as a reason. Also, I already posted that I agree with you, so why are you flogging the dead horse?

10 -- and it's now more! -- is not "natural" in a controlled economy where the Lindens kept it at 248 as we all know. Look at the charts over 30 days or longer, hello. That's not how, oh, the ruble works, for example LOL.

Aha! You've finally managed to get off your grandathered buy-downs kick. You're learning

I'll take this opportunity to remind you (although you don't don't appear to have ever noticed) that the exchange rate went to around 260 about 4 years ago, and about 10 years ago it went a lot higher, so what's happening now isn't anything new. The reason for it may be different to the previous occasions, but we don't know what it is. What we do know is that it is NOT what you suggest, regardless of you stating it as a fact.

The idea that the raise in "process credit" fees caused people to hoard is also simply not sound and not based in facts or logic. People with sims *have to pay tier* so they don't have that luxury, they cash out to pay tier. People who have a store on a parcel with 4096 tier or even 16,000 tier or a homestead don't get this. They especially don't horde when there is now a faster cashout in exchange for the higher fees.

Oh. You decided to hop on my tail, and say that saving up before cashing out isn't sound. You're learning

It's simply not true that the LindEx was lower. My God, when GOM ran exchange it was $4.00 US and not $3.70 or $3.80 as it has been here for years. Please. We're not children.

Wrong. Read, read, reseach, and read.

Of course, in a world where you can't post your own blog link so any person can see what you actually said, you don't have to put up with people misrepresenting your statements in a childish manner. But we don't live in that world so as I said, I want to talk about this issue with grownups. Goodbye.

So do we. Goodbye

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[Phil Deakins]

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Etheria Parrott wrote:

I am hoarding my Lindens. I don't own a sim so I don't need to pay tier so I'm hoarding as much as I can to offset the 15USD process credit fee. Not everyone owns a sim. Other friends of mine are in the same position. I have just offered my hoard at 249. I don't care if I have to wait 6 months or more for the lindex to stabilize but it will sit there waiting until it does.

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You don't need to hoard L$. The process credit change doesn't affect cashing out. Hoard the US$ in your account, of course, but there's no reason to hoard L$.

[Uvas Umarov]

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Etheria Parrott wrote:

I am hoarding my Lindens. I don't own a sim so I don't need to pay tier so I'm hoarding as much as I can to offset the 15USD process credit fee. Not everyone owns a sim. Other friends of mine are in the same position. I have just offered my hoard at 249. I don't care if I have to wait 6 months or more for the lindex to stabilize but it will sit there waiting until it does.

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Sell them fast. The price is dropping quickly now. If you hoard in lindens, you are losing value. After you sell you can accumulate dollars in your account until you have enough to process a withdrawal.

[Etheria Parrott]

It does affect cashing out as far as I understand. There is a 15USD charge whether I cash out 200,000 Lindens or 500,000 so it's cheaper to wait.

[Qie Niangao]

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Etheria Parrott wrote:

It does affect cashing out as far as I understand. There is a 15USD charge whether I cash out 20,000 Lindens or 50,000 so it's cheaper to wait.

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I don't think so. You're talking about the US$15 maximum "process credit" fee for transfering US$ out of your account, right? That's not something you need to pay just to sell L$ and leave the US$ proceeds in your account.

But also, that US$15 maximum corresponds to a US$1000 credit (something over L$265,000 at current exchange rates), above which the fee doesn't increase. I mean, that's enough more than your L$20,000 - L$50,000 numbers to be worth mentioning.

[Etheria Parrott]

I missed off a zero I'm sorry and feel silly. I did mean 200k - 500k of course. Yes I meant the process credit fee. That is enough to encourage merchants to hoard.

[Rya Nitely]

The process credit fee is only charged when you transfer $US to Paypal, not when you sell L$. The only thing that has changed when you sell is that you get less money for your Lindens. It might be better to sell and then hoard your US$. When you hoard L$s at the moment you're losing money, not saving.

[Pamela Galli]

I was not hoarding, just not bothering to sell Lindens regularly because I did not plan to process credit more than twice a month. So I got stuck holding Lindens not realizing the Kindex had gone off the rails. 

But I do think all this is being engineered by LL, tho not quite sure what their ultimate goal is. I assume this is another way to squeeze some income out of creators. 

LL if you are reading, keep in mind you get more of whatever behavior you reward and less of what you punish or tax. I am assuming you want creators to create and sell less, correct? 

Ever hear of that famous goose?

[Rya Nitely]

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Pamela Galli wrote:

 

But I do think all this is being engineered by LL, tho not quite sure what their ultimate goal is. I assume this is another way to squeeze some income out of creators. 

 

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The Ebbe quote by eku in SLUniverse is worth putting here too. It sheds some light on things.

EL:  Well, I’m glad you’re happy. I mean I’ve been saying for quite a while that we’ve been aware that pricing of land has been a core issue, so we’re trying to be sensible about how we start to lower some of the cost, and as you’ve noticed, we’ve also taken some actions to pick-up some of the revenue elsewhere; on the exchange and on the redemption side of the equation to compensate a little bit for this. Because yes, i do believe that the burden of land owners is a bit too high, and we have other people in the world who are sort-of getting away with not being charged enough or taxed enough for how they use the product. So, we’re trying to shift cost from land to other places.

https://modemworld.me/lab-chat-3-bento-and-second-life/#mainland

__________________________________________________________ 

However, the current activity is reducing the value of L$ for everyone. Land owners and merchants are feeling the pinch. So, yes, it is giving with one hand and taking with the other. Nobody wins, except LL.

[Phil Deakins]

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Etheria Parrott wrote:

It does affect cashing out as far as I understand. There is a 15USD charge whether I cash out 200,000 Lindens or 500,000 so it's cheaper to wait.

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No. The charge is when processing credit - moving the US$ in the account out of SL altogether. There is no additional charge for turning the account's L$ into US$.

"I missed off a zero I'm sorry and feel silly. I did mean 200k - 500k of course. Yes I meant the process credit fee. That is enough to encourage merchants to hoard."

You may be right but, if people are doing that, then they've completely misunderstood what the US$15 max is charged for. If people are saving up their L$, they are losing a lot of money while the sell rate goes up and up.

[Phil Deakins]

That's very interesting. It may be LL's hand after all. Although his reference to the exchange may only mean the new charges for processing credit. What financial benefit would it be to LL if they stepped in to raise the sell rate to,say, 260? They get a miniscule amount of extra 'commission'. I know that a lot of miniscule amounts add up, of course, but would it add up to something worthwhile?

[Qie Niangao]

I think a weaker L$ may be a net loser for the Lab because it will drive off some Premium accounts as stipend values diminish relative to membership fees, and then land tier from those members dries up along with their Premium fees.

Granted, there aren't all that many Premium members left, but I dunno, fly around the Mainland and there are still quite a few inhabited areas, so somebody is Premium and has been paying tier on them, up until now.

Also from LL's persective, they lose some monetary control as fixed-fee sinks (such as upload fees) lose effect as the L$ devalues.

But LL is perfectly capable of shooting itself in the foot, so even if the company nets a loss from the change, it could show some narrow benefit that gets some manager a bonus.

They're likely picking over the bones of SL all the time, looking for fake metrics to carve out of her dwindling revenues.

[Phil Deakins]

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Qie Niangao wrote:

I think a weaker L$ may be a net loser for the Lab because it will drive off some Premium accounts as stipend values diminish relative to membership fees, and then land tier from those members dries up along with their Premium fees.

Granted, there aren't all that many Premium members left, but I dunno, fly around the Mainland and there are still quite a few inhabited areas, so somebody is Premium and has been paying tier on them, up until now.

Also from LL's persective, they lose some monetary control as fixed-fee sinks (such as upload fees) lose effect as the L$ devalues.

But LL is perfectly capable of shooting itself in the foot, so even if the company nets a loss from the change,

it could show some narrow benefit that gets some manager a bonus.

They're likely picking over the bones of SL all the time, looking for fake metrics to carve out of her dwindling revenues.

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For some reason, this whole thing brings Jack to mind lol.

You'll know the anwer to this, Qie. Is my memory right when it tells me that the last time the sell rate was up ~260, a few years ago, LL stepped in to bring it down to ~250? I'm sure LL did that, and it does make me wonder if it's LL that is pushing it up to ~260 - because they haven't stepped in yet.

I may be speaking too soon but the highest sell rate hasn't gone up for a while now. It looks like it might have peaked. Or maybe most people are fast asleep in bed.

[Qie Niangao]

Honestly, I don't remember anything about the last time the Lindex took an excursion. The records absolutely show it happened, but I don't think it registered with me at all at the time.

I'm not sure what LL could do, though, to intervene to drive the rate back down. I very much doubt that they ever did or ever would buy L$s to move the market, and the organic sinks would seem to have pretty fixed effect.

Although... heh. Right now, one thing they could do for the L$ would be to introduce a massive new sink: slap a big surtax on all Marketplace and in-world content sales. That would suck up L$s in a hurry, forcing some buyers back into the L$ market. Of course, it might kill the economy quite dead, but it would fix our little Lindex problem. :smileysurprised:

I truly don't know what's happening now. Ordinarily, I'd favor the "Linden is driving the exchange rate" theory because, well, usually they do. But as someone pointed out, the current lots for sale are piddling -- less than L$10 million at each price above whatever, like 250 or something. I don't think I'd do it that way, if I were Supply. Rather, I'd dump like L$100 million at the new target -- maybe even announce it publicly -- and let folks accept that it's the new normal and gtf over it. Anyway, I really don't think she's doling out dribs and drabs of little sell orders like this.

[wherorangi]

thanks. At least LL spoke seems like. So its something

[Medhue Simoni]

IMHO, it could very well be LL driving the value down. They control the value of the sell orders. This looks to be part of Ebbe's plan of taking more from those of us that produce value in SL. If LL continues this tactic, SL will gradually fall apart, as we'll all leave because we can no longer pay our tiers. LL is biting the hands that actually feed them.

[Medhue Simoni]

If I were a landbaron, I would be calling for LL to have a set linden rate that we pay for sims. It really makes no sense that land is priced in dollars and not lindens. It is only because the land is priced in dollars that LL can so flagorantly manipulate the lindex. If all land was priced in lindens, the lindex would be a much more stable environment, and if LL wanted to screw with the lindex, they would also feel the affects of it.

[Phil Deakins]

Suppose that LL wanted the sell rate at ~260. To achieve it, they could keep adding newly printed L$ to the sell orders just above the going rate, knowing that genuine sell orders would follow, and raking in plenty of cash in the process. Maybe that's what's happening - LL raking in some extra cash. Then keep on adding just above the rate until it reached 260. People would still go a little higher, but things would settle. It appears to have settled now, just above 260. It hasn't kept on moving up - at least not since I went to bed last night. To keep it up there, they may need to repeat the process from time to time.

It's the added quantities that people are reporting that make me think it's not just regular merchants cashing out - 10 million here, 15 million there, etc. Who has those sort of amounts to sell? LL do, because they can just type it in. Perhaps speculators do briefly. Even if people were mistakely saving up, only a very small number of people could save up several millions quickly, and surely some of those would wait to see how it all panned out.

I'm fancying LL for it now

[Qie Niangao]

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wherorangi wrote:

thanks. At least LL spoke seems like. So its something

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Well but that quote from Ebbe had to do with the change in the credit transfer fee, a while back now. It certainly wasn't directly addressing the current Lindex changes.

Also, these changes don't really do much of anything to increase LL's income from non-Land sources, which was the point of Ebbe's comment. I mean, sale of L$s to raise the rates might make a small and very short-lived burst of income, but as we see from the ridiculously low trading volumes, it would be just about enough to pay an intern to press the buttons, and even at that, the paltry sums sold now would be L$s they couldn't sell next week, so it's really short term.

Longer term, hmm... they get a 3.5% commission on L$ sales, but that's just a percentage, so devaluing the L$ just means they'd get more of a less valuable thing and would have precisely zero net effect. And then there's a tiny fixed-fee charge on buying L$s, but that's US$0.40, so it isn't affected at all.

I'm just not seeing any way for LL to be making any significant income from the change at all.

[Phil Deakins]

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Qie Niangao wrote:

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wherorangi wrote:

thanks. At least LL spoke seems like. So its something

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Well but that quote from Ebbe had to do with the change in the credit transfer fee, a while back now. It certainly wasn't directly addressing the current Lindex changes.

Also, these changes don't really do much of anything to increase LL's income from non-Land sources, which was the point of Ebbe's comment.

I mean, sale of L$s to raise the rates might make a small and very short-lived burst of income, but as we see from the ridiculously low trading volumes, it would be just about enough to pay an intern to press the buttons

, and even at that, the paltry sums sold now would be L$s they couldn't sell next week, so it's

really

short term.

Longer term, hmm... they get a 3.5% commission on L$ sales, but that's just a percentage, so devaluing the L$ just means they'd get more of a less valuable thing and would have precisely zero net effect. And then there's a tiny fixed-fee charge on buying L$s, but that's US$0.40, so it isn't affected at all.

I'm just not seeing any way for LL to be making any significant income from the change at all.

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I admit that I have no idea how much is actually being sold, but, if it's tens of millions of L$s, then it's a significant, albeit short-term, influx of cash, because, if LL is selling most of it, then all the buy $s are going straight to LL.

[Medhue Simoni]

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Qie Niangao wrote:

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I'm just not seeing any way for LL to be making any significant income from the change at all.

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As you pointed out yourself, there is a gain for LL. Whether it is significant or not, is totally dependent on volume. And...... the volume is there for a massive amount of gain for LL. Not to mention that fewer people will be taking their money out of SL because the price is that much higher.

[wherorangi]

if this is a Supply Linden driven thing, and I think we will know this in about a month if it settles at 258-260 (which I think it will) then is a 10/248 depreciation (about 4%)

there's quite a bit of perfect storm stuff from the residents pov been going on last few days and we still have to get thru end of month

i am pretty sure (if it is Supply Linden) its a combination of two factors

1) Putting more L$ into buyers pockets, which lets them buy more stuff. Spread the love further between landlords, shopkeepers and venues

2) The amelioration of the hit (clawback) that LL took thru the tiers reduction programme

if look at Tyche's estimates. LL are taking in $205K less now in estate tiers each month as a consequence of this. Was $US3.385 million in tiers in total

the top 20 estate barons contribute approx. 40% of this 3385. So just use this as a baseline and convert to L$ (in which the bulk of rentals are paid)

3385 * 40% = 1358. 1358 / 248 = 5.47. 1358 / 258 = 5.26. 5.47 - 5.26 = 0.21. 0.21 / 5.47 = 3.8% approx

when add in the other estates then LL pretty much breaks even with the private estate landlords

and gains 4% approx. from merchants (in terms of cashouts) and mainland barons (in terms of tiers) as well

with the mainland landlords it effective reduces the land bonus down from 10% to approx. 6% margin over private estate landlords

so I think when things settle the new normal will be 258 to 260

[wherorangi]

ps

Qie, you also mentioned earlier that if it was Supply Linden then LL could have stuffed 100M on the Lindex at 258 and just told us to suck it up

they can't really do this (the big 100M shove) as it would effectively block anyone from cashing for a time, and I think it would have made people really panic. Nobody could know for certain that LL wouldnt do it again

so I think that if I was Minister of the Exchequer I would have my minion doing it in 10M blocks, staggering it down over a period of days ( weeks preferably) 

[Qie Niangao]

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Medhue Simoni wrote:

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Qie Niangao wrote:

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I'm just not seeing any way for LL to be making any significant income from the change at all.

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As you pointed out yourself, there is a gain for LL. Whether it is significant or not, is totally dependent on volume. And...... the volume is there for a massive amount of gain for LL. Not to mention that fewer people will be taking their money out of SL because the price is that much higher.

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Well, but people not taking L$s out of SL would be disastrously bad for LL; that 3.5% commission on L$ sales, plus the recently increased credit transfer fee, is the only way LL gets any income at all from in-world sales. (It's a pathetically poor business model that we can be sure they won't repeat in Sansar, if it ever reaches commercial viability.)

I don't know if there's a way they could get what I'd call "significant" income from dumping L$s at the standard buying volume -- and last I checked, volumes have been at or below average through this whole incident. Again, though, even if they do, it's a short term thing that would mean their regular trickle of Supply-originated L$ sales would be stopped dead for months or years, the market consumed by all the regular L$ sales that would be displaced by Supply's one-time sales.

Nonetheless, as I've mentioned, LL has a habit of fantastically poor business decisions, especially when one manager can "steal" revenue from another one's profit center, so it could be another one of those episodes. I can even make up a just-so story that the piddling volumes offered for sale at each point is to disguise the source, in hopes of luring buyers at each price (but so far, spectacularly ineffectively).