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I want to know what those bonds are for.

Author
Jin Atavuli
Sensible People
Sigma Grindset
#1 - 2015-12-20 18:16:38 UTC
When somone does a "300b bond with 3% back per month till payed off in 4 months", what are they doing. I couldn't imagine that doing station trading or even importing (without a major war like fountain) with that much isk could return that much profit unless your station trading all that isk on 20 accounts. Could someone tell me how you scale that much isk, is there like certain projects or an idea? I don't know much about economics, but whats it all used for?
Rykker Bow
Center for Advanced Studies
#2 - 2015-12-20 18:48:20 UTC  |  Edited by: Rykker Bow
Some quick ideas of where to drop that kind of isk into an investment:

- speculation purchasing
- alliance/corp level infrastructure
- station trading (yes, 300b+ can be used in that)
- market manipulations
- high end manufacturing infrastructure
- T2 BPO trading

The Mjolnir Bloc - Lowsec PvP for the sophisticated - The Mjolnir Bloc Killboards

Jin Atavuli
Sensible People
Sigma Grindset
#3 - 2015-12-20 19:04:09 UTC
Thanks. I am new into the marketing world.
Paul Pohl
blue media poetry
#4 - 2015-12-21 01:24:21 UTC
The simple answer is they are making more than 3% on whatever is invested

Knitram Relik
State War Academy
Caldari State
#5 - 2015-12-21 01:55:21 UTC
Paul Pohl wrote:
The simple answer is they are making more than 3% on whatever is invested




This. I assure you I could find a use for 300 bil if I had it. And I'd make more than 3% a month at it too. Too bad I don't have the collateral or credit to even try for that big if a bond issue.

"The problem with quotes on the internet is that it's really hard to verify their authenticity." - Abraham Lincoln

Paul Pohl
blue media poetry
#6 - 2015-12-21 02:22:02 UTC
Knitram Relik wrote:
Paul Pohl wrote:
The simple answer is they are making more than 3% on whatever is invested




This. I assure you I could find a use for 300 bil if I had it. And I'd make more than 3% a month at it too. Too bad I don't have the collateral or credit to even try for that big if a bond issue.


Anyone could.... well ok... perhaps not those using API spyware... and the OP....
Sabriz Adoudel
Move along there is nothing here
#7 - 2015-12-21 03:05:40 UTC
One thing I'd do with 0.3T ISK is do a gamewide buyout of all reasonably priced PI materials, with a view to reselling them over time at a new, higher price.

Another would be a gamewide buyup of (ship hull X) and (ship hull Y) and (ship hull Z). Keeping the actual ships redacted as I may invest heavily into them soon.

As well as that there's just straight up alliance logistics. Sometimes an alliance needs three titan pilots and hulls fast, has lots of collateral but doesn't want to firesell it.

I support the New Order and CODE. alliance. www.minerbumping.com

Jerry T Pepridge
Meta Game Analysis and Investment INC.
#8 - 2015-12-21 03:31:47 UTC
Jin Atavuli wrote:
When somone does a "300b bond with 3% back per month till payed off in 4 months", what are they doing. I couldn't imagine that doing station trading or even importing (without a major war like fountain) with that much isk could return that much profit unless your station trading all that isk on 20 accounts. Could someone tell me how you scale that much isk, is there like certain projects or an idea? I don't know much about economics, but whats it all used for?


Roleplay

@JerryTPepridge

Darkstar01
Doomheim
#9 - 2015-12-21 07:24:31 UTC  |  Edited by: Darkstar01
Jin Atavuli wrote:
When somone does a "300b bond with 3% back per month till payed off in 4 months", what are they doing. I couldn't imagine that doing station trading or even importing (without a major war like fountain) with that much isk could return that much profit unless your station trading all that isk on 20 accounts. Could someone tell me how you scale that much isk, is there like certain projects or an idea? I don't know much about economics, but whats it all used for?



Here are a few scenarios:

1. Someone has 300 Bil worth assets that would take over a month to liquidate. But there is an opportunity to take advantage now, so they use the assets as collateral to get the loan. While the asset is being held as collateral, it gets liquidated slowly and the proceeds are used to pay back investors.

2. Titan / supercarrier manufacturing - A titan cost around 60 bil worth of raw materials. Plus you have other miscellaneous fees such as logistics, null sec system rental, etc.

Some of those people you see issuing 200 - 300 billion bonds on MD are probably in nullsec renter corps or alliances, in the business of supercap production.

Let's say a titan costs 60 bil to manufacture, and the retail price is 100 bil. That's around 40 bil profit per ship.
It takes 1 month to manufacture the ship, then give or take another 2 - 3 weeks for logistics of minerals and manufacturing of capital components, and also another 2 weeks for selling the ship. Now you are looking at a 2+ month operation.

A 300 Billion isk bond with a 3 month duration could be used to fund the raw materials, logistics, and 0.0 system rental for Titan production. The bondholders get 3% per month, and after the 3 months are up and the titans are sold, they get repaid their principle.


Someone with a good reputation on MD could easily "refinance" their bonds. So it's possible when someone does a smaller "follow up" bond after their large first bond offering, it could be used to pay off some of the investors from a previous bond offering.

It could also be because they want to expand their operation, or one of their shipments got blown up and they just lost a big chunk of ISK and now they need more, but the profit they make will cover it.

3. Alliance infrastructure as Rykker Bow mentioned. Once you get the alliance infrastructure set up, the taxes you collect from bounties can easily pay the interest of the bond (and also the rent that you collect, if any). Alliances have other programs as well, such as purchasing minerals mined by members below market cost.
Bumblefck
Kerensky Initiatives
#10 - 2015-12-21 12:38:41 UTC
Jerry T Pepridge wrote:
Jin Atavuli wrote:
When somone does a "300b bond with 3% back per month till payed off in 4 months", what are they doing. I couldn't imagine that doing station trading or even importing (without a major war like fountain) with that much isk could return that much profit unless your station trading all that isk on 20 accounts. Could someone tell me how you scale that much isk, is there like certain projects or an idea? I don't know much about economics, but whats it all used for?


Roleplay




I want pledge 20bn

Perfection is a dish best served like wasabi .

Bumble's Space Log

Dextrome Thorphan
#11 - 2015-12-21 15:12:29 UTC  |  Edited by: Dextrome Thorphan
Jin Atavuli wrote:
. I couldn't imagine that doing station trading or even importing (without a major war like fountain) with that much isk could return that much profit unless your station trading all that isk on 20 accounts.
Huh? Why would you need more than 1 account for station trading?

Jin Atavuli wrote:
Thanks. I am new into the marketing world.
You don't need any marketing knowledge to do some trading.
(Unless by marketing you ment economics instead of marketing?)
Jin Atavuli
Sensible People
Sigma Grindset
#12 - 2015-12-21 20:14:01 UTC

Jin Atavuli wrote:
Thanks. I am new into the marketing world.
You don't need any marketing knowledge to do some trading.
(Unless by marketing you ment economics instead of marketing?)[/quote]

I did. Thanks. I am now having many more ideas on what I want to do when I get better at station trading.
Tau Cabalander
Retirement Retreat
Working Stiffs
#13 - 2016-01-03 03:02:30 UTC
Dextrome Thorphan wrote:
Jin Atavuli wrote:
. I couldn't imagine that doing station trading or even importing (without a major war like fountain) with that much isk could return that much profit unless your station trading all that isk on 20 accounts.
Huh? Why would you need more than 1 account for station trading?

More orders, or to try to make it look less like one person is controlling the market on one item.

Contracts are even more restrictive... though there is a simple way around that which seems borderline exploit in my paranoid mind.