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Lexander Morinex
Caldari
LDD Investments
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Posted - 2009.08.26 22:24:00 -
[1]
 Originally by: Ith Ratheos
I think a good number of people at this point would be willing to accept a return of 50 cents on the dollar. The risk of waiting this out is that more will be stolen and potentially nothing returned.
Since EBANK is basically stating that the current deposits will grow up to 2t at a growth rate of roughly 8% a month it really depends.
The basic math on the risk analysis is few MD investments are worth the risk. It does amuse me that for all the propaganda and statements from the EBANK group this does look surprisingly like either a Ponzi or a very badly invested operation.
I just don't see how Ray can reasonably expect 8% a month compounded growth for assets worth over 1t. I will note that when DBANK hit about 300b it was pointed out how incredibly hard it was for a company to offer rates above 5%.
It bothers me that the BoD of EBANK has made this decision without consulting the owners of the accounts. I understand the situation but I think a lot of players would feel they could do better in practice than EBANK is promising in theory.
- Lex
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Lexander Morinex
Caldari
LDD Investments
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Posted - 2009.08.26 22:39:00 -
[2]
Edited by: Lexander Morinex on 26/08/2009 22:40:17
Originally by: Kalrand
Their only way out is to pull the plug on this and start over.
I still like my plan for that.
The saddest part of this whole thing is that what EBANK has done is what mutual funds in really bad shape have been known to do. It is a sign of insolvency.
It also basically says 'You have no say in this, it isn't really your ISK anymore'. What always made EBANK a 'bank' instead of an 'IPO' was really the ability to pull ISK out quickly. What Ray is doing is basically converting EBANK into the structure of an IPO and promising a payout in the end.
- Lex
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Lexander Morinex
Caldari
LDD Investments
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Posted - 2009.08.26 22:50:00 -
[3]
Originally by: Kalrand
You mean hedge funds, but yea. He can do pretty much whatever he wants with your money right now.
My bad on the hedge funds part.
I suppose that is what bothers me. Ray has made a unilateral decision. Investors in EBANK (and that is what they have always been) were promised returns and a structure that justified those low returns (easy access). Now Ray and the BoD has changed the rules of the game without warning.
This is better than scamming and running with it but it still an issue.
- Lex
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Lexander Morinex
Caldari
LDD Investments
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Posted - 2009.08.27 03:54:00 -
[4]
Originally by: Brian Kwok
Sup Lex, nice to see the success stories from DBANK have joined in. Now its a party.
I wasn't sure if I hoped or feared that people remembered my time with DBANK.
What a f***ing mess that was. It became obvious after a couple of months that everything, and I do mean EVERYTHING, ran through Manalapan. In that whole time I talked with him RL over Vent exactly once. There were no immediate red flags but eventually I began to wonder.
The biggest problem was that the whole system (and I mean all banks) made no sense. You borrow billions of ISK and owe tons of money. But why would you bother to borrow in the first place? If what Manalapan claimed about his trading skills was true then he didn't need any ISK. He could have generated sufficient wealth for himself without paying 10% a month to a crowd of players.
There were no real individuals that were safe to loan money to. The reason people invested in the banks at low interest was because the other investments were too risky. How was DBANK (or EBANK) going to make money doing that? The answer was fairly simple. They would become generate money doing exactly what all the other players did, but on a larger scale.
And that was the point where I stared to call bulls**t. The glory of running an online bank was fairly nonexistent. It is a lot of work and not a lot of respect. Any player who can manage 100b in ISK effectively can generate more than enough personal wealth to do whatever they wanted.
It made absolutely no sense. And that started raising red flags. Even if Manalapan had been the most communicative guy in the world he was working overtime to pay other people using money he didn't need. After all, if he could generate 1b in ISK per day by himself he hardly needed to be paying 10% to somebody else.
So after DBANK got scammed I knew it was time to throw in the towel. Not only was the liquidity situation almost certainly bad I had no idea that kind of money was going to one player anyhow. I was supposed to be involved in the risk management side of things and had no clue. I had better things to do with my life.
This whole EBANK thing doesn't surprise me at all. Ricdic's reputation was sustained with smoke & mirrors by previous directors when it was fairly clear to most he was more of a salesman than any kind of genius. It didn't take that much parsing of what was being said to figure that out.
As much as I admire Hexxx he often seems to operate in the land of theoretical ideas. A good example is his insurance model. It sounds so good on paper but any real mathematical analysis will show that such a system is just waiting for one sufficiently good scam to make it crumble. There are more than a few RL examples of that kind of thing and there are even fewer methods of enforcement online. I admire such ideas but I question the business model. The same was true of EBANK.
You don't need a bank to store your ISK. That is the primary function of banks for most people. There is really no sense in investing at 2% a month since the expectation on such an investment is surely (but not almost surely) negative. The idea that you can hand your money to somebody else and expect them to go make money for you is nice in theory. But it fails the smell test. With a few specific exceptions (mostly high risk large industrial projects) anybody who can actually use the money you are loaning them efficiently doesn't need your money in the first place. Certainly not billions of ISK.
So goes the grand experiment. By next year the lesson will likely be forgotten and this will start all over again. Maybe I will try to start my own bank just to see who is silly enough to buy into it at 2%.
- Lex
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Lexander Morinex
Caldari
LDD Investments
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Posted - 2009.08.27 17:49:00 -
[5]
Originally by: Dariah Stardweller
Originally by: Saint Lazarus
Still would have rathered left my isk in Ebank than taking it out to put in DBank.....
Rather my ISK frozen than just out right gone 
I have a hunch the ISK WILL be gone in a few months. I really don't see them getting back from this tbh.
I am less skeptical about that.
Ray had no need to admit what he admitted. If EBANK was/is a Ponzi there is likely enough assets remaining to sustain the system for quite awhile. The interest payments were a small part of the total and growth could have been sustained for a long time.
My only issue with Ray is his choice to unilaterally decide to continue a venture that looks to have taken a 60% loss without consulting the investors. It might be difficult to liquidate but that could be handled through selling the assets to speculators and returning 30% of the deposits to each investor.
Given the nature of markets a few of the bigger players could simply buy out the assets and potentially make a killing over time.
- Lex
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Lexander Morinex
Caldari
LDD Investments
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Posted - 2009.08.27 17:53:00 -
[6]
Edited by: Lexander Morinex on 27/08/2009 17:53:38
Originally by: Varo Jan
Hexxx is an IT consultant, I think. Consulting in the banking or insurance industries does not make him knowledgeable of either industry. You need to read what his posts don¦t say. It¦s an amusing experience.
I personally like Hexxx. His posts were thoughtful and made me think.
My only problem was the ideas tend to have a bit of dreamland quality to them. In the sense that EVE is just a game that makes sense. But as practical plans for business I am not so sure. At some point you have to run the numbers and have a bit of healthy skepticism about the integrity of your fellow EVE player.
- Lex
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Lexander Morinex
Caldari
LDD Investments
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Posted - 2009.09.11 20:57:00 -
[7]
Originally by: Tarinara
So now it's 3 Years?!?!
Oh come on guys - just go ahead and steal the damn money already and be done with it. I've already written off my 700+ mil as gone. HaHa ... the jokes on us...
I'm just waiting for my commemorative "All my ISK are belong to E-Bank and all I got was this crummy Newbie Frig" Tee Shirt.
3 years? The current members of EBANK are going to work, for free, for 36 months for the sole purpose of giving back to others players the money that has been lost.
Forgive me for thinking that most players would do better to just take the 40% and spend 3 years tripling their money. Either they can, or they have so much money already they can just write off the loss. This is just plain silly.
- Lexander Morinex
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Lexander Morinex
Caldari
LDD Investments
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Posted - 2009.09.14 14:36:00 -
[8]
Originally by: Ray McCormack
Originally by: Catarrh Ague
Can you confirm that these references are merely humorous?
Yeah. Although some would quite rightly question the humour.
Fortunately I didn't invest in the wonderful opportunity to make 3% a month.
But this does show exactly why I am concerned about the situation. This kind of black humor is a sign of growing frustration. And Ray is still months away from fixing the damage. I have already registered my preference for liquidation (which with the inactive accounts could very well be a mild liquidation for most).
Mostly though it is sad to see EBANK begin to operate unilaterally.
- Lex
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Lexander Morinex
Caldari
LDD Investments
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Posted - 2009.09.14 21:34:00 -
[9]
Edited by: Lexander Morinex on 14/09/2009 21:34:02
Originally by: LaVista Vista
In the short run, everybody ought to get the ISK that is owed to time. When EBANK has fully recovered, it can easily be forced to liquidate if everybody takes their ISK out. And I find that to be a likely scenario.
What gets me about this is it deliberately ignores the time value of money. When EBANK gets back to the value it was before it will have done nothing more than earn interest on the current money at a rate no better than the investors could do themselves.
If anything, EBANK can be expected to perform worse than the individual investor who is working on a smaller scale and can get 2.5x there starting value faster than EBANK can possibly do.
Because of that, if in one year even if EBANK has earned back all the lost ISK to this point the bank will have effectively forced most investors to take an effective loss on what they could have made if the had been given their 40%.
The 1.2t EBANK has lost to this point is merely a sunk cost. The idea that EBANK is restoring the lost equity is a fallacy. Investors do not benefit from EBANK taking away their opportunities in the vain hope that the bank can save face.
- Lexander Morinex
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Lexander Morinex
Caldari
LDD Investments
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Posted - 2009.09.14 21:43:00 -
[10]
Originally by: Landea Kimimi
So...all those who owe loans to EBank now have a reason not to repay EBank. After all, like EBank you need only a subjective reason to hold EBank in default. Forget your obligations everyone...EBank certainly has. Depositors, you're just being further duped: you have already lost your money....
I would certainly argue that those who own loans to EBANK are well within their rights at this point to insist they won't repay the loans for one to two years, and without interest.
- Lexander Morinex
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Lexander Morinex
Caldari
LDD Investments
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Posted - 2009.09.14 21:56:00 -
[11]
Originally by: Amarr Citizen 155
Lexander, I had prepared several quotes of things you've said in the past year but honestly it just isn't worth it. Please feel free to continue to give your opinion.
My opinion is merely that EBANK investors would get a better deal after liquidation than EBANK is going to give them by keeping their money. In my view EBANK doesn't really even have the right to make that decision (whatever rights mean in this game). If EBANK has the right to say 'We will give you your money back when we decide' then any and all investors can do whatever they want with the money people loan them.
I am noticing that something about the way I post really annoys people. Since that isn't really my intent when I write I am doing something wrong.
- Lexander Morinex
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Lexander Morinex
Caldari
LDD Investments
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Posted - 2009.09.15 04:54:00 -
[12]
Originally by: LaVista Vista
For what it's worth, the ISK might actually be worth a few extra % due to the inherent deflation of EVE. But your points are fair.
True. But that would also apply to any ISK in the hands of the investors too.
From my perspective I have no reason to believe that Ray or the current BoD intends to scam anyone. That is certainly not my issue.
My issue is that EBANK has basically violated the contract it made with each investor. Practically speaking EBANK is insolvent. You can't repay each investor the full value and therefore you can't process withdrawals.
But the way the bank has handled it denies the investors the ability to decide the fate of their own ISK.
Can EBANK really manage 800b ISK better than each individual investor? Many months ago the directors of EBANK pointed out how DBANK was going to have trouble paying 10% a month because it got harder to generate ISK as you had more of it. (I point out DBANK sometimes specifically because I was involved in that debacle and am not exactly proud of it). The same rule applies to EBANK now. EBANK is basically claiming that despite losing 60% of the deposits new management can now take all that ISK and double it in a year or two. If it was easy to do before then the bank wouldn't have the problems it has now. That kind of ISK is hard to utilize for industrial pursuits and you there aren't enough trustworthy people to loan it to that would generate any reasonable %.
Given that many investors can double their money in a matter of months it seems a poor trade.
- Lex
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Lexander Morinex
Caldari
LDD Investments
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Posted - 2009.09.24 21:52:00 -
[13]
Originally by: Amarr Citizen 155
Originally by: josh parker
Hello Ebank. My main has a loan through your corp. I have made the decision, although not an easy one. That i will not be paying the loan back for at least the next year, maybe even the next two. Also i must ignore any interest i would be paying you over these next two years.
Basically, the company we were working on creating, has how can i say, fallen on hard times, and basically its not in our best interest to honor any former agreements with you as our banker. I know this may be unfortunate for ebamk, however i am sorry. I will get back with you in 6-12 months, and inform you if we are able to pay back the loan interest free. Once again i am sorry, but this is the options we give you, it is in the best interest of our company as a whole. - josh
0/10. Unfortunately, you are late to the party and your joke isn't original. Maybe next time?
Gallows humor may not be original but it does express a very real issue.
It may not be original but it is basically what EBANK has done. Refusing to repay depositors or pay interest would normally be considered defaulting on your debt.
- Lexander Morinex
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