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thinking through the FW manipulation...
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Machete Visor
Caldari Provisions
Caldari State
#1 - 2012-06-25 16:07:32 UTC
Please feel free to correct me where i go astray... i don't know all the ins and outs of the mechanics of converting LP. But what I think I read what that a ton of very liquid minerials were converted into standard and improved implants, tempest/stabber fleet issue bpcs and minnie datacores, with a likely not inconsequential ISK cost (tax).

I guess an intermediate step is that the items were really converted at a "real price" (not an inflated price) equivalent to certain obscure implants....


Thinking this through... the manipulators converted very liquid assets to semi-liquid to illiquid assets (tempest fleet issues). We all now know their positions... pure economics dictates that the price crash in these items if they try to liquidate them, until demand comes in to soak up the stock.

So how might that happen...

...implants are a function of time. People use them when their clones get popped... so would expect prices to crash for a good while until enough people get popped to use the demand. Or they hold off liquidating to try to maintain some price level... in which cash inflation chips away at their profit. Would also expect a certain population of mission runners to stop converting to implants b/c of the price decline...

...tempest/stabber fleet issues require some minerials to create. The tempest are very illiquid so prices should crash (most of the production cost is the BPC). Basically means fun ships for minimatar pilots at a great price. If the tempest crashes from 400M to the minerial cost of 100M (approx?), then that wipes out 75% of the "manipulation" profit in those items. Stabbers would crash from 60M to 5M?

...datacores are used in invention. Have hovered around 300k per and now are down to 150k. Dropped to 50k. Could spark a wave of very cheap t2 goods if they liquidate those stocks. But from 300k down to 50k? That is a massive profit hit.


So i guess i am thinking the market should take care of this one over time, and we should all see some fun shiny ships in play. If you are holding t2 goods that use those datacores, sell. Sell your implants. Sell your stabber/tempest fleets. If CCP acts and takes everything from them, well, you might miss a small pop. I think datacores is the only item to crash thusfar, so maybe hold those.
Aryth
University of Caille
Gallente Federation
#2 - 2012-06-25 16:11:35 UTC
Machete Visor wrote:
Please feel free to correct me where i go astray... i don't know all the ins and outs of the mechanics of converting LP. But what I think I read what that a ton of very liquid minerials were converted into standard and improved implants, tempest/stabber fleet issue bpcs and minnie datacores, with a likely not inconsequential ISK cost (tax).

I guess an intermediate step is that the items were really converted at a "real price" (not an inflated price) equivalent to certain obscure implants....


Thinking this through... the manipulators converted very liquid assets to semi-liquid to illiquid assets (tempest fleet issues). We all now know their positions... pure economics dictates that the price crash in these items if they try to liquidate them, until demand comes in to soak up the stock.

So how might that happen...

...implants are a function of time. People use them when their clones get popped... so would expect prices to crash for a good while until enough people get popped to use the demand. Or they hold off liquidating to try to maintain some price level... in which cash inflation chips away at their profit. Would also expect a certain population of mission runners to stop converting to implants b/c of the price decline...

...tempest/stabber fleet issues require some minerials to create. The tempest are very illiquid so prices should crash (most of the production cost is the BPC). Basically means fun ships for minimatar pilots at a great price. If the tempest crashes from 400M to the minerial cost of 100M (approx?), then that wipes out 75% of the "manipulation" profit in those items. Stabbers would crash from 60M to 5M?

...datacores are used in invention. Have hovered around 300k per and now are down to 150k. Dropped to 50k. Could spark a wave of very cheap t2 goods if they liquidate those stocks. But from 300k down to 50k? That is a massive profit hit.


So i guess i am thinking the market should take care of this one over time, and we should all see some fun shiny ships in play. If you are holding t2 goods that use those datacores, sell. Sell your implants. Sell your stabber/tempest fleets. If CCP acts and takes everything from them, well, you might miss a small pop. I think datacores is the only item to crash thusfar, so maybe hold those.



The prices dropped due to us sucking liquidity out of the system to pump back into more assets. Think of it like us building a snowball with the liquid ISK of trader's buy orders.

They have mostly recovered already. Once people knew why the prices dropped, and that it was over. they recover quickly as people gobbled up the underpriced stock.

Long term, there is no hit, as these are HUGE markets. Top 20 in EVE type market. If you add up the implant market you are looking at 150b+ a DAY easy. 5T spread across implants/cores/ships is really nothing. Which was intentional.

Leader of the Goonswarm Economic Warfare Cabal.

Creator of Burn Jita

Vile Rat: You're the greatest sociopath that has ever played eve.
Machete Visor
Caldari Provisions
Caldari State
#3 - 2012-06-25 16:18:23 UTC
Aryth wrote:
Machete Visor wrote:
Please feel free to correct me where i go astray... i don't know all the ins and outs of the mechanics of converting LP. But what I think I read what that a ton of very liquid minerials were converted into standard and improved implants, tempest/stabber fleet issue bpcs and minnie datacores, with a likely not inconsequential ISK cost (tax).

I guess an intermediate step is that the items were really converted at a "real price" (not an inflated price) equivalent to certain obscure implants....


Thinking this through... the manipulators converted very liquid assets to semi-liquid to illiquid assets (tempest fleet issues). We all now know their positions... pure economics dictates that the price crash in these items if they try to liquidate them, until demand comes in to soak up the stock.

So how might that happen...

...implants are a function of time. People use them when their clones get popped... so would expect prices to crash for a good while until enough people get popped to use the demand. Or they hold off liquidating to try to maintain some price level... in which cash inflation chips away at their profit. Would also expect a certain population of mission runners to stop converting to implants b/c of the price decline...

...tempest/stabber fleet issues require some minerials to create. The tempest are very illiquid so prices should crash (most of the production cost is the BPC). Basically means fun ships for minimatar pilots at a great price. If the tempest crashes from 400M to the minerial cost of 100M (approx?), then that wipes out 75% of the "manipulation" profit in those items. Stabbers would crash from 60M to 5M?

...datacores are used in invention. Have hovered around 300k per and now are down to 150k. Dropped to 50k. Could spark a wave of very cheap t2 goods if they liquidate those stocks. But from 300k down to 50k? That is a massive profit hit.


So i guess i am thinking the market should take care of this one over time, and we should all see some fun shiny ships in play. If you are holding t2 goods that use those datacores, sell. Sell your implants. Sell your stabber/tempest fleets. If CCP acts and takes everything from them, well, you might miss a small pop. I think datacores is the only item to crash thusfar, so maybe hold those.



The prices dropped due to us sucking liquidity out of the system to pump back into more assets. Think of it like us building a snowball with the liquid ISK of trader's buy orders.

They have mostly recovered already. Once people knew why the prices dropped, and that it was over. they recover quickly as people gobbled up the underpriced stock.

Long term, there is no hit, as these are HUGE markets. Top 20 in EVE type market. If you add up the implant market you are looking at 150b+ a DAY easy. 5T spread across implants/cores/ships is really nothing. Which was intentional.


yeah i think i can see that for the implants and datacores... how about the 1001 tempest fleet issues and 2002 stabber fleet issues? About 500b in tempests... not sure that market is quite as liquid.

Are you suggesting the majority of the stock has been liquidated already?
corestwo
Goonfleet Investment Banking
#4 - 2012-06-25 16:41:44 UTC  |  Edited by: corestwo
What he's suggesting is that we diversified into implants, Republic Fleet Ships, hardwirings, and datacores.

What he also didn't say is that, beyond our first crashes (to get liquidity to continue), we had no interest in crashing anything and purposefully stayed away from less liquid markets (such as the RF ships) for our dumps so as to avoid long term damage. What purpose would it serve us to harm the very markets that we're trying to use to cash out on? It makes far more sense to utilize liquid markets which will recover such as implants (and they did recover) and then milk it for months so as to not crash things as you said "pure economics dictate" will happen.

tl;dr: A thousand tempests (or five thousand implants, or three million datacores) hitting the market is fine and will have minimal impact so long as it hits the markets over the course of months. Which, it will, if CCP returns it.

This post was crafted by a member of the GoonSwarm Federation Economic Cabal, the foremost authority on Eve: Online economics and gameplay.

fofofo
Fiat Money
EVE Sky Corp
#5 - 2012-06-25 16:45:08 UTC
Machete Visor wrote:
[...] If CCP acts and takes everything from them, well, you might miss a small pop. [...]



CCP did last friday, "preventing further damage" to the market.
But there's still a chance Goons will get at least a partial of their stuff back the next days after the investigation finishes. Who knows...
Kara Books
Deal with IT.
#6 - 2012-06-25 16:47:59 UTC
Caldari and Mini.
Aryth
University of Caille
Gallente Federation
#7 - 2012-06-25 17:04:46 UTC
Machete Visor wrote:
Aryth wrote:
Machete Visor wrote:
Please feel free to correct me where i go astray... i don't know all the ins and outs of the mechanics of converting LP. But what I think I read what that a ton of very liquid minerials were converted into standard and improved implants, tempest/stabber fleet issue bpcs and minnie datacores, with a likely not inconsequential ISK cost (tax).

I guess an intermediate step is that the items were really converted at a "real price" (not an inflated price) equivalent to certain obscure implants....


Thinking this through... the manipulators converted very liquid assets to semi-liquid to illiquid assets (tempest fleet issues). We all now know their positions... pure economics dictates that the price crash in these items if they try to liquidate them, until demand comes in to soak up the stock.

So how might that happen...

...implants are a function of time. People use them when their clones get popped... so would expect prices to crash for a good while until enough people get popped to use the demand. Or they hold off liquidating to try to maintain some price level... in which cash inflation chips away at their profit. Would also expect a certain population of mission runners to stop converting to implants b/c of the price decline...

...tempest/stabber fleet issues require some minerials to create. The tempest are very illiquid so prices should crash (most of the production cost is the BPC). Basically means fun ships for minimatar pilots at a great price. If the tempest crashes from 400M to the minerial cost of 100M (approx?), then that wipes out 75% of the "manipulation" profit in those items. Stabbers would crash from 60M to 5M?

...datacores are used in invention. Have hovered around 300k per and now are down to 150k. Dropped to 50k. Could spark a wave of very cheap t2 goods if they liquidate those stocks. But from 300k down to 50k? That is a massive profit hit.


So i guess i am thinking the market should take care of this one over time, and we should all see some fun shiny ships in play. If you are holding t2 goods that use those datacores, sell. Sell your implants. Sell your stabber/tempest fleets. If CCP acts and takes everything from them, well, you might miss a small pop. I think datacores is the only item to crash thusfar, so maybe hold those.



The prices dropped due to us sucking liquidity out of the system to pump back into more assets. Think of it like us building a snowball with the liquid ISK of trader's buy orders.

They have mostly recovered already. Once people knew why the prices dropped, and that it was over. they recover quickly as people gobbled up the underpriced stock.

Long term, there is no hit, as these are HUGE markets. Top 20 in EVE type market. If you add up the implant market you are looking at 150b+ a DAY easy. 5T spread across implants/cores/ships is really nothing. Which was intentional.


yeah i think i can see that for the implants and datacores... how about the 1001 tempest fleet issues and 2002 stabber fleet issues? About 500b in tempests... not sure that market is quite as liquid.

Are you suggesting the majority of the stock has been liquidated already?


Heh. No, I had a personal plan to try to combine welpfleet with Alpha fleet with Neuting/1400 Fleet Tempests. The ships I had planned to use for contracts within CFC. So most likely those would never have hit market.

Leader of the Goonswarm Economic Warfare Cabal.

Creator of Burn Jita

Vile Rat: You're the greatest sociopath that has ever played eve.
corestwo
Goonfleet Investment Banking
#8 - 2012-06-25 17:35:19 UTC
And mine would have dribbled out after not being touched for months because honestly the logistics to build 600 battleships? :effort:

This post was crafted by a member of the GoonSwarm Federation Economic Cabal, the foremost authority on Eve: Online economics and gameplay.

fofofo
Machete Visor
Caldari Provisions
Caldari State
#9 - 2012-06-26 03:10:01 UTC
corestwo wrote:
What he's suggesting is that we diversified into implants, Republic Fleet Ships, hardwirings, and datacores.

What he also didn't say is that, beyond our first crashes (to get liquidity to continue), we had no interest in crashing anything and purposefully stayed away from less liquid markets (such as the RF ships) for our dumps so as to avoid long term damage. What purpose would it serve us to harm the very markets that we're trying to use to cash out on? It makes far more sense to utilize liquid markets which will recover such as implants (and they did recover) and then milk it for months so as to not crash things as you said "pure economics dictate" will happen.

tl;dr: A thousand tempests (or five thousand implants, or three million datacores) hitting the market is fine and will have minimal impact so long as it hits the markets over the course of months. Which, it will, if CCP returns it.



i guess - and i am just running in theory land here and not in eve market land - that yours is a bet that inflation will not dissolve your profits. I.e., you'll be able to liquidate faster than inflation brings you back to neutral, without crashing the price. So it really is a liquidity bet... probably a good one (with the implants and datacores). But if you had to convert those minerals into... let's say... suckie FW shirts... it would be a different story.

i take back what i said before- they should let you keep it. i want to see the markets play out as a result. should be interesting.
corestwo
Goonfleet Investment Banking
#10 - 2012-06-26 04:09:12 UTC  |  Edited by: corestwo
Implants remaining stable is a rather safe bet, especially if Minmatar never recover Tier 4 again (Tier 4 is half price, so an extended bout of that means they can buy cheaper than normal mission runners), and datacores are a pretty safe bet as well - the lower Minmatar FW drops, the higher they (theoretically) go. Fleet Tempest BPCs and hulls are another matter, but they were really more of a convenient avenue to cash out a bunch of LP very quickly. We'd be selling those for months, probably years.

Inflation in Eve is sort of funny in that everyone, including Doctor E, talks about it, but it hardly actually matters. Basic goods react far more closely to the price of their inputs than they do to inflation; only Plexes seem to respond directly to increasing money supplies.

If, as you now desire, they let us keep it though, the market will hardly notice. When we're not dumping to get liquidity to keep going, we have a gentle touch. Blink

This post was crafted by a member of the GoonSwarm Federation Economic Cabal, the foremost authority on Eve: Online economics and gameplay.

fofofo
Tom Hagen
Twilight Empire
#11 - 2012-06-26 06:01:03 UTC
corestwo wrote:
If, as you now desire, they let us keep it though, the market will hardly notice. When we're not dumping to get liquidity to keep going, we have a gentle touch. Blink


I do believe there is a miner or maybe two out there who disagree Blink
Private Pineapple
Brutor Tribe
Minmatar Republic
#12 - 2012-06-26 17:02:52 UTC
corestwo wrote:
Implants remaining stable is a rather safe bet, especially if Minmatar never recover Tier 4 again (Tier 4 is half price, so an extended bout of that means they can buy cheaper than normal mission runners), and datacores are a pretty safe bet as well - the lower Minmatar FW drops, the higher they (theoretically) go. Fleet Tempest BPCs and hulls are another matter, but they were really more of a convenient avenue to cash out a bunch of LP very quickly. We'd be selling those for months, probably years.

Inflation in Eve is sort of funny in that everyone, including Doctor E, talks about it, but it hardly actually matters. Basic goods react far more closely to the price of their inputs than they do to inflation; only Plexes seem to respond directly to increasing money supplies.

If, as you now desire, they let us keep it though, the market will hardly notice. When we're not dumping to get liquidity to keep going, we have a gentle touch. Blink


We've been hitting T4 quite often recently.

.
corestwo
Goonfleet Investment Banking
#13 - 2012-06-26 18:06:34 UTC
Tom Hagen wrote:
corestwo wrote:
If, as you now desire, they let us keep it though, the market will hardly notice. When we're not dumping to get liquidity to keep going, we have a gentle touch. Blink


I do believe there is a miner or maybe two out there who disagree Blink

Fair point. Different scenario though - in this case, abusing the market we have to use to cash out would be counterproductive to us. We put a lot of theorycrafting and effort into our scheme, and so the idea would be to get the most out of it...can't do that if we crash markets in the process.

Private Pineapple wrote:
We've been hitting T4 quite often recently.


How's that 160 points working out for you? Don't get me wrong, you guys might stage mass buys and recover it now and then, but you're not going to hold it. When we first started out, we barely had to contribute at all, because you guys had and were holding Tier 4 just fine on your own. That doesn't seem to be the case anymore, though - you guys bought Tier 4 yesterday and have lost 90 points since.

This post was crafted by a member of the GoonSwarm Federation Economic Cabal, the foremost authority on Eve: Online economics and gameplay.

fofofo
Bath Sheeba
Another Success Story
#14 - 2012-06-26 18:07:18 UTC
Private Pineapple wrote:


We've been hitting T4 quite often recently.


ARGH!