Exchange rate is now over L$270 / US$1.00. How high will it go?

[Charlotte Bartlett]

3 hours ago, animats said:

Somebody has a sell order pending for L$129,639,049 at L$259 / US$1.00.

Wonder who wants to cash out nearly half a million US dollars? Is that unusually large? Or just a big landlord cashing out the rent payments?

that's not a land baron.    

LL have been transparent in that they make a level of profit from the LINDEX and also print money within that objective / have sinks.     When you put in large cash out "markers" it keeps the rate within the range that LL wish it to be.

[Alwin Alcott]

7 hours ago, animats said:

Somebody has a sell order pending for L$129,639,049 at L$259 / US$1.0

since when we can see individual orders?

[Solar Legion]

7 hours ago, Alwin Alcott said:

since when we can see individual orders?

The above has been present since I started back in 2006.

The person you have quoted mistook these aggregate numbers to be individual sellers.

Edited February 19, 2020 by Solar Legion

[Theresa Tennyson]

On 2/17/2020 at 8:45 AM, Qie Niangao said:

 

[ETA: Incidentally, the 9 point spread between bid and ask is about par for the LindeX. I'm not financier enough to know if that approximately 3.5% spread is a natural consequence of the market's fee structure. Would arbitrage be possible with either a tighter spread or lower fees? Dunno.]

My assumption is that limit sell orders are filled by market buy orders - typically the "Buy Lindens now" box in the viewer - and limit buy orders are filled by market sell orders, which is how Linden Lab provides new Lindens to the system. It wouldn't make financial sense for anyone else to use market sell because a limit buy at the top of the range will go through just as quickly for a better rate. The new market-rate Lindens from Linden Lab are the reason for the spread.

If Lucia's initial comment was referring to a limit sell at L$270, which is what it sounds like, then there are two possibilities.

1) Somebody who didn't understand the market placed it there thinking that it was necessary to hit the limit buys in the list, not realizing that market buys from the viewer would get them a better rate.

OR

2) Someone was trying to increase the exchange rate on a market buy. It's interesting that it was placed before anyone from Linden Lab would have been awake. There is apparently quite a bit of financial funny business involving rare gacha items on the Marketplace bought with stolen credit card numbers right now - there might have been an attempt to launder Lindens by using market buys.

[kali Wylder]

I haven't needed to buy Linden dollars since I started hosting. IIRC i could get $5,000 for $8 and change US dollars.  Has it really more than doubled in price since then?

[Solar Legion]

40 minutes ago, kali Wylder said:

I haven't needed to buy Linden dollars since I started hosting. IIRC i could get $5,000 for $8 and change US dollars.  Has it really more than doubled in price since then?

The 4096 I rent costs me L$5404 - right now that's $22+ when factoring in the transaction fee.

In short, it's fairly up there if going by those numbers. Mind it was "worse" at one point and the $1.49 transaction fee isn't helping matters either.

Edited February 19, 2020 by Solar Legion

[Theresa Tennyson]

19 minutes ago, kali Wylder said:

I haven't needed to buy Linden dollars since I started hosting. IIRC i could get $5,000 for $8 and change US dollars.  Has it really more than doubled in price since then?

I don't think you're remembering things accurately. The exchange rate has been a few Lindens either side of 250 for most of Second Life's history.

[Garnet Psaltery]

44 minutes ago, Solar Legion said:

The 4096 I rent costs me L$5404 - right now that's $22+ when factoring in the transaction fee.

In short, it's fairly up there if going by those numbers. Mind it was "worse" at one point and the $1.49 transaction fee isn't helping matters either.

There must be some compelling reason to be renting at that high a cost, assuming that's a weekly rate.

[Solar Legion]

14 minutes ago, Garnet Psaltery said:

There must be some compelling reason to be renting at that high a cost, assuming that's a weekly rate.

Monthly, thankfully.

[Qie Niangao]

2 hours ago, Theresa Tennyson said:

My assumption is that limit sell orders are filled by market buy orders - typically the "Buy Lindens now" box in the viewer - and limit buy orders are filled by market sell orders, which is how Linden Lab provides new Lindens to the system. It wouldn't make financial sense for anyone else to use market sell because a limit buy at the top of the range will go through just as quickly for a better rate. The new market-rate Lindens from Linden Lab are the reason for the spread.

Hmm. We agree that market buys are filled by limit sell orders, and market sells are filled by limit buy orders. In my mental model of the LindeX, though, the majority of sales are limit orders (and the corresponding majority of buys are market price, much of it through the viewer or Marketplace) and those limit sales are by both private sellers and Supply Linden. I sorta figure the Lab sets a target exchange rate and keeps adding a few million L$s for sale at that rate as demand uses up the queued sales at that price. Some private sellers will undercut the target by a point for a sale quicker than waiting for the backlog to clear at the current best selling price. And some, apparently, will be desperate enough (US$ tier due?) to take the spot market, otherwise our limit buy orders would never fill. I do not think Supply Linden makes those spot market sales -- it just seems too labor intensive to maintain the desired exchange rate -- but I don't think I can prove it.

Somebody who understands Over The Counter markets could explain what determines the Bid / Ask spread. Worst case, I could read some Finance, I suppose.

Now I have to admit I hadn't read Lucia's comment correctly, and I'd never seen such a huge gap within the limit order prices. But just as I was typing this, I saw a smaller but similarly silly gap on the Buy side:

I mean, even if one were trying to launder money, what would be the point of skipping L$269 and L$268? It's not as if the L$267 order was somehow "left over" when those better prices were filled because there'd be no way to fill them as long as the better price were available to sellers. It's a tiny lot, so probably just a screw-up... but even if it were a huge order, I'm not seeing how it could effectively move the market. That doesn't mean it's impossible, though.

[Prokofy Neva]

On 2/17/2020 at 5:12 AM, Lucia Nightfire said:

The exchange rate is now over L$270 / US$1.00. How high will it go? 😕

Also, does anyone else see that there is no reporting of sell orders between rates L$262 / US$1.00 & L$269 / US$1.00 ? 🤔

https://secondlife.com/my/lindex/buy.php

Yes, that's evidently a sign that there are more and more Premium accounts being purchased and their stipends and sign-up bonuses then flooding the market -- it's like Yeltsin printing rubles.

Evidently the Lindens are not intervening (of course they intervene all the time with Supply Linden) because the want the new Bellissarians to feel like they have a lot of cheap, ready cash to buy all those house add-ons and furnis from the Lindens' friends.

Eventually I think even they will tire of this, however, as the house add-on manufacturers realize more and more than cashing out their Lindens is worth less and less, especially with the new fee, double the old.

 

[Prokofy Neva]

On 2/19/2020 at 1:10 PM, Theresa Tennyson said:

I don't think you're remembering things accurately. The exchange rate has been a few Lindens either side of 250 for most of Second Life's history.

That's not true whatsoever. I have InfoNut issues and blogs going back for years and I just ran across one from 2008 lamenting how the Linden stood at 325. 

[Prokofy Neva]

23 hours ago, Qie Niangao said:

Hmm. We agree that market buys are filled by limit sell orders, and market sells are filled by limit buy orders. In my mental model of the LindeX, though, the majority of sales are limit orders (and the corresponding majority of buys are market price, much of it through the viewer or Marketplace) and those limit sales are by both private sellers and Supply Linden. I sorta figure the Lab sets a target exchange rate and keeps adding a few million L$s for sale at that rate as demand uses up the queued sales at that price. Some private sellers will undercut the target by a point for a sale quicker than waiting for the backlog to clear at the current best selling price. And some, apparently, will be desperate enough (US$ tier due?) to take the spot market, otherwise our limit buy orders would never fill. I do not think Supply Linden makes those spot market sales -- it just seems too labor intensive to maintain the desired exchange rate -- but I don't think I can prove it.

Somebody who understands Over The Counter markets could explain what determines the Bid / Ask spread. Worst case, I could read some Finance, I suppose.

Now I have to admit I hadn't read Lucia's comment correctly, and I'd never seen such a huge gap within the limit order prices. But just as I was typing this, I saw a smaller but similarly silly gap on the Buy side:

I mean, even if one were trying to launder money, what would be the point of skipping L$269 and L$268? It's not as if the L$267 order was somehow "left over" when those better prices were filled because there'd be no way to fill them as long as the better price were available to sellers. It's a tiny lot, so probably just a screw-up... but even if it were a huge order, I'm not seeing how it could effectively move the market. That doesn't mean it's impossible, though.

In ancient times, a Linden named I believed "TJ Linden" who was a RL economist and monitored the LindEx would explain policy to us. I assume that the Lindens have someone at least part-time like that thinking about what it means to have Premium account dollars flooding the market and lowering the value of THEIR currency, after all. Or do they? I can understand why they'd be mostly preoccupied with fraud and perhaps not thinking of the macro issues?

[Theresa Tennyson]

11 minutes ago, Prokofy Neva said:

That's not true whatsoever. I have InfoNut issues and blogs going back for years and I just ran across one from 2008 lamenting how the Linden stood at 325. 

That would have been a freak spike. This link shows the historical Linden exchange rates since 2005 (hit the "All" button under the graph.) There is one line in 2008 over 325 but it dropped back down immediately.

https://secondlife.com/my/lindex/market.php

Edited February 20, 2020 by Theresa Tennyson

[Beth Macbain]

[Prokofy Neva]

 

 

7 minutes ago, Theresa Tennyson said:

That would have been a freak spike. This link shows the historical Linden exchange rates since 2005 (hit the "All" button under the graph.) There is one line in 2008 over 325 but it dropped back down immediately.

https://secondlife.com/my/lindex/market.php

I'm glad to see that you admit now that your claim "The exchange rate has been a few Lindens either side of 250 for most of Second Life's history" is wrong. The graph illustrates this. It doesn't matter if 325 is a "freak spike" because there are other bad patches that last along time and have a terrible effect.

It's also obvious that when you have that compressed of a graph over 15 years that you can't tell how long the peaks and troughs are, really. But don't let the facts get in the way of your usual desire to say something to counter me, even if the sky is blue. I'm going to try to figure out the "block" on here again.

Edited February 20, 2020 by Prokofy Neva

[Theresa Tennyson]

18 minutes ago, Prokofy Neva said:

I'm glad to see that you admit now that your claim "The exchange rate has been a few Lindens either side of 250 for most of Second Life's history" is wrong. The graph illustrates this. It doesn't matter if 325 is a "freak spike" because there are other bad patches that last along time and have a terrible effect.

Note that I said "most."

https://www.merriam-webster.com/dictionary/most

And for the poster who said they were getting L$5000 for $8.00 and change, the exchange rate would have needed to be over 555 Lindens/dollar.

18 minutes ago, Prokofy Neva said:

I'm going to try to figure out the "block" on here again.

Try looking for tooltips...

Edited February 20, 2020 by Theresa Tennyson

[Prokofy Neva]

30 minutes ago, Theresa Tennyson said:

Note that I said "most."

https://www.merriam-webster.com/dictionary/most

And for the poster who said they were getting L$5000 for $8.00 and change, the exchange rate would have needed to be over 555 Lindens/dollar.

Try looking for tooltips...

So again, because this "tool tip" seems to have eluded you:

It's also obvious that when you have that compressed of a graph over 15 years that you can't tell how long the peaks and troughs are, really. 

[Theresa Tennyson]

On 2/19/2020 at 1:10 PM, Theresa Tennyson said:

I don't think you're remembering things accurately. The exchange rate has been a few Lindens either side of 250 for most of Second Life's history.

 

1 hour ago, Prokofy Neva said:

That's not true whatsoever. I have InfoNut issues and blogs going back for years and I just ran across one from 2008 lamenting how the Linden stood at 325. 

 

11 minutes ago, Prokofy Neva said:

So again, because this "tool tip" seems to have eluded you:

It's also obvious that when you have that compressed of a graph over 15 years that you can't tell how long the peaks and troughs are, really. 

So, what you're saying is we can't tell if the brief period of 325 is longer than the plateaus on either side?

[Selene Gregoire]

[Lewis Luminos]

On 2/19/2020 at 6:10 PM, Theresa Tennyson said:

I don't think you're remembering things accurately. The exchange rate has been a few Lindens either side of 250 for most of Second Life's history.

I remember it sticking at 270 to 275 for a very long time, since I started in 2006 and possibly as late as 2009. I was gutted when it dropped to 250 (because I only ever buy L$, I have never earned enough to sell).

[Wildefire Walcott]

gettin' nostalgic SL forum vibes from this thread...

[Qie Niangao]

On 2/20/2020 at 7:29 PM, Lewis Luminos said:

I remember it sticking at 270 to 275 for a very long time, since I started in 2006 and possibly as late as 2009. I was gutted when it dropped to 250 (because I only ever buy L$, I have never earned enough to sell).

Something like that is kinda confirmed by the "all" data graph mentioned above. Here's another that shows the long reign of 250, and a bit of the transition before and after.

I sure wish gridsurvey had continued collecting these data, but it was great while it lasted.