Player Features and Ideas Discussion

This is an incredibly stupid idea. Player "courts" are never going to work because they're opt-in, and anyone who doesn't want to follow the decision of the "court" can simply ignore it. And having CCP making decisions about which scams are "acceptable" is absolute insanity, and directly contradicts core principles of EVE.

I am not going address the straw men you put up. Yeah once again like in every criticism you have you assume the worst then eviscerate the idea I have no interest in protecting. Have you ever heard of Don Quixote?

So I lied participation wouldn't be compulsory. What is a court without enforcement?

Pray tell, how does a speculator keep a price artificially low or high? Unless they are trying to corner the market, which is not speculation, they can't. Speculators add liquidity to the market. If there is a reason for some commodity's price to rise and a speculator knows about he can bring about that price increase sooner before there is say a shortage and thus help mitigate the effects of said shortage. Further, if a speculator suspects market manipulation they can actually help short-circuit it. A market with a large number of speculators makes manipulation harder. Suppose Bob decides to manipulate the market and starts a false story. But the speculators know the story is false so as the price goes up (or down) the speculators (sell) or buy to cash in on the profits, thus preventing Bob from manipulating.

Cornering markets has never really worked. Even if you have a crap ton of ISK and start buying up X, and the price of X goes up because you bought all of it. What happens? That high price will scream, "More of X needed here." So producers of X will try to bring as much or more of X as they can. Of course it depends if we are talking something like moon goo or some other product where production does have a soft quantity cap. Further, once you have built up this huge pile of X how do you unwind that position without the price falling and wiping out all of your paper wealth? You might try an elaborate scam or something via a small army of alts maybe, but you'll have to do it all pretty much simultaneously.

CCP issues no ISK, or very, very little. ISK is created by player actions. I kill a rat for 500,000 ISK, I create 500,000 ISK. Same thing with sinks. I buy a 500,000 ISK skill book, I have sunk 500,000 ISK out of the game. The amount of ISK is entirely dependent on player actions. More ratting...more ISK. CCP cannot increase the ISK stock under the current regime. Sure, they could come along and say, "We have added 2 zeroes to everyone's wallet balance." But they don't. They leave it up to players.

The only speculation during the Great Depression was regarding the gold standard. Once you go off the gold standard it is nearly impossible to go back on it without coming under a speculative attack. And this is not some illuminati kind of thing, it is an every day Joe kind of thing. Suppose the government goes back on the gold standard tomorrow. You could walk into the Federal Reserve and say, "Here are my notes, give me the gold value." You could then take that gold and hide it, put it in a safety deposit box, etc. Why would you do that? Well, we know that the Fed was not on the gold standard yesterday, they might be on it tomorrow, but the day after? Or the day after that? In other words, people would always want to trade in their notes for gold. This follows from Gresham's law really. So the Fed will see it's gold reserves dwindle until finally it is forced off the gold standard. So this was part of the depression, as gold was flowing out of the country the Fed responded to it by reducing the money supply. This was a mistake. Coupled with the wave of bank failures, the passage so Smoot-Hawley we went from a garden variety recession into t he worst Depression the world has ever seen. All because of bone-headed policy piled on top of stupid policy.

As for the Fed's failure's in 2008 they are legion.

First off there is David Beckworth's complaints that the Fed kept interest rates too high too long.

http://www.econtalk.org/archives/2016/05/david_beckworth.html

Then there is the fact the Bernanke really did not adhere to Walter Bagehot's principles regarding central banking. Those principles are simple really. When you have an illiquid bank you lend at high rates to them to get them over that rough patch. They were prudent and reasonable, but unlucky. For an insolvent bank...you let them fail. The Fed had not been doing this for a long time. They bailed out Continental Illinois in the 1980's. They bailed out Wall Street during the Mexican crisis. Then they bailed out Long Term Capital Management. In many cases these were insolvent banks. They should have been allowed to fail. When 2008 came along, FDICIA should have been invoked at the very least. But Washington did not. Why? Well, when the FDIC takes over a failed bank they pretty much fire senior management. Senior management at those banks did not want to be fired, so they called their buddy Hanky-poo Paulson and said, "Don't invoke FIDICIA." And he didn't. Instead he went begging to Congress for TARP complete with getting down on one knee before Nancy Pelosi. And of course, this really doesn't do much to shore up confidence. Oh, and never mind that before this the Fed was sterlizing it's monetary policy when it came to helping out banks. If the Fed was going to give $100 billion to XYZ bank, they first sold $100 billion in treasuries. $100 billion goes into the economy and $100 billion comes out...at a time when expanding the money supply would probably have been a good thing. Derp. But the Fed ran out of Treasuries the problem was so big so quantitative easing. But to make sure that money did not end up in the economy and leading to inflation they started paying banks interest on their deposits. The Fed was hyper-focused on the interest rate...keeping control of that...which they ended up losing control of anyways. It was an absolutely crazy and nonsensical series of policies.

continued....

Edits: Typos mainly...

As for Too Big To Fail, too late to do much about that, IMO. The problem is time (dynamic) inconsistency. The idea of time inconsistency was first postulated by the economists Edward Prescott and Fynn Kydland (here is a copy of their JPE article). They pointed out that an optimal policy is not time consistent, that is suppose you have an optimal policy at time t, at time t+1 (or time t+n) the policy makers will not want to stick with that policy because it is not longer optimal--i.e. reneging on the policy is more desirable. And we see it in your statement,



This might be hard to follow, so here is an example. A professor tells his class that their grade will depend 100% on the final, and for simplicity lets assume pass/fail. So on test day the professor will have a tremendous inclination to simply not give the test. After all, everyone studied so they should all pass. By not giving the test everyone is better off. The students don't have to take the time to take the test and the professor does not have to take the time to grade the tests. So cancelling the test is optimal. However, rational forward looking students would realize this and simply not study.

In other words, policy becomes a game. And games do not have to have "optimal" outcomes. While the outcome is a (nash) equilibrium it does not have to be a "good" (nash) equilibirum. By the way, this was seen as the ultimate salvo into the hull of the discretionary policy ship. Discretionary policy is always going to be time inconsistent, whereas using rules will not be time inconsistent...of course, we still have discretionary policy because what politician wants to limit his own power?

Same thing with Too Big Too Fail. Now that we have started bailing out large banks we cannot stop. Once we stop it will be the mother of all **** storms financially speaking. We saw a glimpse of it with Lehman Brothers. When the government said, "Nope, not bailing out Lehman....after bailing out Bear Sterns...well all mother f**king Hell broke loose. Nobody knew what was going to happen...and Oh look AIG just went **** up and is about to die. Learning from Lehman the government was very, very, very quick to step in and bailout All The Things™. Not only were they bailing out Wall Street they started bailing out the automakers too.

Scotland had no central bank for about 100 years (a bit longer) and had a very stable banking system. Canada had no central bank for over 100 years and again has had an extremely stable banking system. A central bank does not make for a stable banking system. The US has had a central bank for over 100 years and has had a number of crises. During the 1930s thousand upon thousands of banks failed. There was the S&L debacle, the Mexican crisis, then 2008's financial crisis just to name the highlights. England had banking crisis after crisis until about 1855 when the Bank of England basically said, "Enough." They basically told parliament with help of the Economist and the Banker they were not going to do what they said regarding put options. Then Overend-Gurney came along and the Bank of England stuck to their guns. There was a small crisis, and then for about 80 years England was crisis free as the Bank of England followed Bagehot's principles.

As for Canada, Canada allowed branch banking pretty much from the start. That is the key. Branch banking allows a bank to spread it's risk. Sure the crop might fail in a given region, but by spreading risk the bank in that region does not fail and as a result people's deposits are safe. Another aspect of why Canada's system is so robust is quite likely due to how the Canadian Senate works. Senators hold their office until t he age of 75, retirement or death whichever comes first. This exemption form populist pressures allows the Senate to take the long view and vote down boneheaded populist measures. We don't have that here in the U.S.

By contrast the U.S. favored unit banking up until the 1980s. So banks could not spread risk except the big banks in New York. So when the Great Depression hit it was inevitable that there would be a wave of bank failures taking people's life savings with those failures....except in places like California which again allowed for branch banking which stabilized the banking system.

No...history is replete with a vast tapestry of central bank screw ups and idiocy. Not to mention the fact that we often do not know when a recession has started until month after it has started. This idea that we can fine tune/manage the economy like it is some sort of engine is errant nonsense. And I seriously doubt CCP would do much better...and to CCP's credit they have not tried...and look we have a robust and solid economy that ensures that players have plenty of ships with which we can shoot each other in the Goddamn face with.

(And apologies for the giant walls of text)

Oh, and damn you for breaking up my giant walls of text!

Edit: Or maybe thank you...for breaking that stuff up.

You are correct that they can short circuit a gap in supply. Speculators do play tug of war this is also correct.
Their is a leveraged effect that happens as speculators start to all jump behind a particular side in an event IE buying or selling a certain resources. Speculators tend to herd this is what is often creates patterns in trading. In EVE like any markets their are seasonal, daily, and one-off events that can be manipulated. Bob is for the most part unlucky it's hard to believe Bob would have his secret ploy exposed.

Cornering markets has never really worked is correct. I am talking about accentuating market events temporary causing markets to stay higher or lower then normal. Misinformation campaigns are just one tool in market manipulation. What I mean is markets often trade in channels. Your correct in the moon goo analog but the in my opinion the way to make the most money speculating in EVE is playing high volume regional markets against each other. It doesn't take much ISK (relatively) in regional orders to squeeze a market for a short period of time. This is less harmful then misinformation campaigns however as you outlined EVE media is less comprehensive. This means you have a much harder time with this strategy vs real life misinformation via media.

Whether ISK is generated by CCP or player actions has no bearing on what were talking about other then the relation to MUDflation.

Yes this is all correct and the root cause of the deflationary spiral was the flight to safety via the runs on the banks and the redemption of silver and gold certificates.

As for the Fed's failure's in 2008 they are legion.

David Beckworth's isn't familiar to me I will check this out but I am very very busy this is my excuse for time gap in posts.

My initial thought is that early 2008 it was unclear how much panic and hysteria would rock the market. It was clear that we were in a negative feedback loop and the market seemed to have upward resistance and downward pressure. A correction isn't unhealthy for a market to experience the Fed really tries to stay out of the small stuff they only respond to the big things. I will not defend Bernakie he should have stepped down in 2003-2004 in my opinion.

https://en.wikipedia.org/wiki/List_of_bank_failures_in_the_United_States_(2008%E2%80%93present)

A quick Wiki search says 465 banks failed between 2008-2012 In federal receivership if the board and management aren't replaced they still must adhere to auditing and an increased reporting scrutiny. Hank Paulson was a hack that is true.

TARP was a mixed bag but as I said before your right, but the time to discuss "To big to fail" was not then. They literally have the strongest bargaining position they can have. A house is on fire argument and we can help you put it out! TARP did what it needed to to which was backstop the big banks and stop the spread, depth, and breath of the panic. We had to issue bonds to raise money that's pretty much how the government raises funds. Quantitative Easing could have been rolled out more quickly but this was largely the Fed being caught flat footed. It was crazy back then I assure you no one knew how bad it was going to be due to the fact Bushes Treasury had the reigns. I am sure you know the government ended profiting from TARP. What is sad is the height of the panic is the time when "To big to fail" institutions have least political capital to defend themselves (this puts us in a sort of catch 22). I think the S&L crisis in the 70-80's is a better way to handle this kind of crunch. They largely used forbearance and deferment which shifts from the risk form tax payer (which never should have happen) back to the troubled corporation. The reason this didn't occur is that Bush then Obama was on watch so the sickness took over and they stole the middle classes future. Make no mistake a robbery occurred at that time but their is and has been an active disinformation campaign to obscure the real culprits.

The fed dropped the fed funds window to 0% this maybe impotent in the face of what they had coming but indeed they didn't have many tools at their disposal. In a real working democracy the people would have been financial educated to the point they wouldn't let their politicians give away the future of the economy without something in return. This is the very reason their is so many malcontent people that are causing turbulence now. Their will be a reconciliation one way or another. Giving interest to banks was giving them money but the reason for this was the shoring up confidence (via stress tests) which I cannot express enough how strong the bear market was at the time it was wild. I also want to point out you were right in the fact that TARP was largely horded by the banks due to the fact we made them stress test. Just like now back then giving a bunch of banks money wasn't popular but giving them money to be stronger then making them meet asset retention thresholds was addressing the problem modestly without causing more panic to ripple through the proletariat. This wasn't super effective because the major problem was credit markets seized and that was why TARP 2 became more politically palatable.

I will try to read the rest and address your points as well. Thanks for the discourse even though I think we lost many people by now.

We did not need TARP. We had FDICIA, we could have used that. But Paulson, Geithner, Bush, Obama, et. al. did not want to penalize Wall Street. They did not want to dismiss the senior management. They did not want impose a hair cut on creditors, they even threw the shareholders a bone when and where they could. There was nothing imposed on Wall Street for the bailouts. It was exactly the same with the Mexican crisis. They have basically set up a system of private profits and public losses, that is not a stable nor sustainable system.

In any event, none of this goes towards why there is no stock market in EVE. It is not for lack of an SEC, or another other government regulatory agency. It is because the way the game is structured one cannot emerge in the game's economy.

And I'm not even sure why we would want one. The economy is doing what it needs to do and that is make us ships that we can use to shoot each other. Good enough for me, and that should be good enough for everyone, IMO.

If you think that is alot, here is some information to put this in perspective:

During the 1930's (what most people think of as the Great Depression) approximately 9,000 banks failed. In 1933 an estimated 4,000 banks failed. The reason for this was a boneheaded policy called Unit Banking. Back then there was this belief that big banks would screw over the "little" guy. So they enacted a policy that allowed national banks to have one branch, the main office. So each town would tend to have one bank. The bigger cities like New York had many large banks. This was another reason for unit banking; that the New York Banks would dominate the banking industry if they allowed branching. But the problem is this prohibition against branching also carried with it a very bad implication: banks could not spread risk. So if in Nebraska a region's crop failed then the bank would also fail taking with it the deposits of everyone in that region. Further, these failures can take on a contagion like aspect, the banks in SW Nebraska failed...so the rest of the banks in Nebraska also start to experience runs and those with insufficient capital would go under even if they were still solvent, again taking depositors money with them. When the Great Depression hit and with the Smoot Hawley tariff it was like having industries failing just about everywhere. One of the U.S.'s primary exports back then is like now, agriculture goods. With Smoot Hawley our trading partners retaliated and as a result the export markets for agriculture goods disappeared. And trying to sell domestically meant the prices plummeted leaving farmers unable to pay back their loans meaning that many of their banks were insolvent eliciting runs. Because of Smoot Hawley this phenomenon was systemic--i.e. system wide or across pretty much most of the economy. So we had thousands upon thousands of banks fail taking with them tens of billions of dollars (in today's dollars) from consumers. So, did the policy makers learn a lesson and get rid of unit banking? No. They created the FDIC to prop up unit banking, just as they created the Federal Reserve to help prop it up too. Later they created FSLIC as well. However, FSLIC went bankrupt, yes a government agency went bankrupt (more or less) and was absorbed into the FDIC.

There is this belief that financial institutions cannot function properly when they are under market discipline. That somehow things will go off the rails and mess things up. However, history says that it is exactly the opposite. That trying to replace market discipline with regulatory discipline is what can get you into trouble. Which makes some sense when you think about it. Market discipline is uncaring. The market is not a person. It is not even a thing. It is a process and as such has no feelings, no wants, no desires, no goals. In fact, the market is really just a short hand for what is really going on out there. As such the "market" won't care if a bank is going to fail. It will let it fail. Like nature it can be brutal.

Regulatory discipline on the other hand is imposed by people who do have emotions, feelings, wants, desires, and goals. As such these things will influence their decisions. "We can't let that fail, it will be bad for 'us' in that people might vote us out of office." Then there is regulator capture, who do regulators talk to? The industry the regulate. They almost literally lose sight of the forest because of the few trees they have their noses up against. Not only that there is often a two door between the regulator and the regulated. So even the regulated like being regulated. It will shield them from market discipline and even limit the degree of competition they will face.

Bringing this back to the topic and EVE, CCP should be thanked for taking a largely hands off approach with the game when it comes to the economy. All to often, in their hubris, many people think they control things that they really don't fully understand. Think of it this way, did anyone see the rise of superbugs (antibiotic resistant bacteria)? Actually...yes, they did. But here is the interesting thing, they couldn't stop it. And look at how CCP struggles to balance ships and modules. Players are always looking for an edge. And they can play with more variables than CCP can control (e.g. fleet composition, fleet size, etc.). Do we really want to make CCP's job of balancing the game even more arduous by adding a complex financial sector where bad things will emerge and you won't be able to stop and CCP will spend time working at repairing the damage?

The economy is working fine in game. We get lots of stuff at reasonable prices. Maybe it isn't perfect, but don't let the perfect be the enemy of the good.