Market Discussions

I don't have feelings either way on collateralized or non-collateralized bonds. Rather, i take exception to the notion that a higher-than-average, unconditional return of 15% somehow mitigates the non-collateralized nature of the offering. A person who offers a 3% return can scam just as easily as someone who offers a 15% return. That has no bearing on the extent to which this may or may not be a scam.

:imageshack:

It doesn't mitigate any of the risk. It's a higher return because of the risk. Same as a real life loan really.

In real life, the risk being mitigated is not fraud or embezzlement, it's the potential failure of the investment. Important difference. If a scammer intends to scam, and is given the opportunity, the chance of the scam occurring is 100% whether he "offers" a 3% return or a 15% return. He could offer to "double your money," as the old scam goes, and it wouldn't make a difference.

Could you please explain how the words "because of the risk" mean something different than "to mitigate against the risk"? I can't really see the distinction.

I think he is talking about the other way around. In the case that the person requesting the loan is not a scammer he will repay you with more cash to make up for the risk you've taken and the trust you gave him.

That is how I look at it, at least.



:))) . Oh my god. Look, I will explain this once again. If I was offering the loan through the contract, then it would've been :

" Buyer pays 5 billion ISK. ", not " Buyer will receive 0 ISK"

So, what you are trying to prove, still makes no sense and the decision to offer me the collateral before I sent him the ISK is his own decision.

Also I think that this debate extended for too long. For me is pretty simple.
Everything he said until now proven true. I talked to him before posting on the forum (I can send the mails and transaction to anyone that is interested) and he seems to be a correct person. The situation now is no different than other loans I previously supported.

If he is a fair dude he will keep his word if he is not, than it's my money at risk and not anyone's else.
I'm done with this thread as it took too much of my time anyway.

...and it's a dumb decision.

that's all that needed to be said.

indeed, where did I say anything else?first of all, I never said "Buyer will recieve"...
"Buyer will get 0 ISK" was a quote of what I saw on the screenshot,...talking about reading comprehension :D

at this point, I think the boat is obviously sunk, might awell calm down :s

Imageshack? Let me introduce you to imgur.com

And that is what risk mitigation means. Of course, offering somebody the world on a platter wouldn't alter the risk of a scam occurring, given that the person wants to commit a scam, and has the opportunity to do so. "Oh, you say you'll give me Iceland in return if I loan you 5b ISK? Here you go!" What does that have to do with whether the person will scam or not? Nothing.

Nothing new here. Bond offerers in MD rarely promise returns that are actually worthwhile to their clients. I really kind of hate static-return offerings for that reason. In my view, an investment should be run for a percentage-based fee of profits earned, and the rest either returned to investors or rolled back into the enterprise at the option of the individual investor. The offerer has a reason to seek maximum profits, because the higher the profits the better he does, and the clients are getting the sort of return they deserve. it's not guaranteed to be the same exact amount each month, but it will almost certainly be far better than the average offering.

People just take up these really poor-performing investments because they don't really value their capital, but they do enjoy RPing like big investment hotshots who can throw billions around on a whim. You could make way more than 15% on 1bn ISK in a month just by dipping your little toe in the water of station trading. Why anybody would actually commit that much capital for that flimsy a return is beyond me. And the thing is, 15% is considered a HIGH return rate for MD bonds. It's really sad when you think about it.