Town Long Bond Auction, Final Results:

3 @ 65 Soul
2 @ 64 Sarajas
2 @ 63 HS-S
1 @ 62 Jungherr Paul
2 @ 61 Sarajas
3 @ 60 Soul
1 @ 59 nikke1
6 @ 58 OZ
-----------------------------
20 units were issued at 58 mil each (72% total, 1.1% APR)

Can somebody please verify that my specification (upthread) concerning the matching engine is correct? Please!

Consol Auction starts - all units subscribed at 1.66% APR - bid higher to get yours


The Town will be having nominally 199.5 mil annual fixed positive cash flows after B.9 is auctioned to the owners. (Nominal, because some of this land is donated to the Town by the owners, to avoid paying the land tax - streets for instance. Town will accept them back, reducing the cash flow.)

The inquiries about the matters show that we the Town should proceed with the plan and issue 1,000 CON (consol) units each paying 0.1 mil per year forever. This is to sell a part of the cashflow to the market at a higher price (and lower interest) and serve as the liquid gauge for "risk-free" interest rates, and help to establish the financial branch in town.

The Town is not redeeming the consols back at any price, the only obligation is to perpetually pay them 0.1 mil per realweek. The Bank will use them as a means of current assets management, and the King will try to make markets for them. They present an excellent opportunity for anyone who wants to get interest for their XMR and support the game in the process, or for any current player to diversify from the gold holdings.

1,000 consols will be issued at the minimum price of 6.0 mil each, corresponding to the interest rate of 1.67% APR. The maximum price King is willing to buy them is 10.8 mil, corresponding to 0.93% APR. Anyone can bid in the CON auction, the minimum quantity is only 1*CON, about 10 mil. By bidding high you get the market rate. The proceeds to the town will be used for buying the B.8 and B.9 from the King at 9.0 bil.

See the prior posts and wikipedia articles for theory. (Comma serves as a decimal separator in the following:)

48 hours remaining
Current Situation

40 @ 10,8 King
40 @ 10,6 King
40 @ 10,4 King
40 @ 10,2 King
40 @ 10,0 King
40 @ 9,8 King
40 @ 9,6 King
40 @ 9,4 King
40 @ 9,2 King
40 @ 9,0 King
40 @ 8,8 King
40 @ 8,6 King
40 @ 8,4 King
40 @ 8,2 King
40 @ 8,0 King
40 @ 7,8 King
40 @ 7,6 King
40 @ 7,4 King
40 @ 7,2 King
40 @ 7,0 King
40 @ 6,8 King
40 @ 6,6 King
40 @ 6,4 King
40 @ 6,2 King
40 @ 6,0 King

Well yeah, there are many things in the professional exchange software. I'd postpone this just to the next revision


Yes. PJ: let's add these two commands, with identical syntax and evaluation:
cancelbuy (synonym for cancelbid)
cancelsell (synonym for cancelask)

Also new command:
CANCELALL item_id
- remove all bids and asks of active_character for the item_id

This is to ease the situation when it is unclear if there are orders in the books, and difficult to remember them exactly.


Yes we will, later.


PJ, check what is up here!


- char_id "5" = "New"
- char_id "3" = "NewLiberty"

Char_id's are always ints and char_shortnames are max 12 char text strings without spaces.

Nice! Looks good To make sure the functionality/logic is 100% correct, only testing can help!

With the previous promises concerning m payment in this world and eternal glory in the next one, please continue with the testing!

The timing to introduce consols now is very auspicious. The Town is short on current funds due to the obligation to pay 13.5 bil to the King on the new boroughs (9 bil still unpaid). The boroughs do not immediately recoup the investment especially because of the 700 m/sqm/year extra tax in B.9, which causes the land values there to be lower than elsewhere.

The cash flows from this borough, when fully sold (and fully sold it will: the dutch auction is going to zero m, making it a risk-free purchase for anyone, because land can be surrendered to the Town to avoid paying the tax at any time), will amount to 94.5 mil per year. In addition to the existing ~12 mil fixed cash flows from 1-SE, this enables the issuance of 1,000 consols that pay a fixed 0.1 mil per year perpetually.

This fulfills the principle of hedging. I strongly advise (IRL) against entering to any obligations to deliver something that you don't always have, nor cannot reasonably produce. For instance a common loan is an obligation to pay back in currency units whose value is wholly decided by somebody else (central bankers), and that you don't have as a hedge (why would you need a loan if you did), nor have the right to issue. Obligations to sell something you have, or regularly trade with, or produce, are safe, because you are hedged so that the change in the valuation of the asset does not change your financial position (or more strictly: any amount of change cannot cause you financial ruin because you are not net short / naked short).

Therefore, the first consols may be issued as payment to the King for the new boroughs. The current pricing in the Long Bond auction suggests 1.1% APR, which translates to the consol price 0.1 mil / 1.1% = 9 mil/unit, which *1,000 = 9 bil, handily the same amount that the Town owes to the King.

So the net result of the financial trickery is that the Town gets the 2 boroughs for free, and offsets the (perpetual) positive cash flow from the extra land tax with the (perpetual) negative cash flow of having to pay the consols. The only risk to the Town is if the land is surrendered by the characters in the future to avoid the tax, which might happen in very high XMR valuations. Though in the event of very high XMR valuations, the Town can probably handle it (The tax is only 0.3 XMR/q/real-month so does not become an issue for the owner any time soon - for comparison, the Expert-Master level salary from the Town is 9.1 XMR/real-month).

King is left feeling a bit puzzled. The deal seems straight, but somehow it feels that the Town is getting the sweeter half... The deal of this size will anyway be decided in the Town Council, and this is the preliminary announcement for it.

After the King gets the consols, he will naturally use them to make liquid bond markets, for the first time in the game. Until now, the market cap of even the largest bond issue has been ~1 bil, not allowing aftermarket. Now we get to the ~10 bil size. The CKG market is now at 765 bil and has suffered a little from the fragmentation due to the itemization.

Since this has proven to be a winning concept, NewCorp strikes while the iron is hot and builds 5-SE-D1 and D2 also similarly. The exception is that these have 120% lux and have a view to San Pietro, and that they were primed to return more than 3% at the time of construction

Currently about 25% of the characters have not deposited. Typically in these games, the number is about 90% or more though, and we expect similar to happen with us as well.

We are so small at present that even if we get 1000 players which is not a huge international success by any means, it corresponds to a 10x increase in characters, more than that in active characters, and likely a bit less than that in total playtime and deposits.

Lord noms has been lamenting that land is difficult to sell. We believe the latest examples of (above), and East Alley in Village, and 2-N, demonstrate that:
- You need one buyer who wants to buy the lot offered, among the hundred for sale. A combination of lot attributes and marketing, perhaps..
- The price needs to be right.

Just a reminder that the B.6 chapelry auction is now at 1,238 mil. Two chapelries were sold at about 1,250 mil, seven remaining.

The Long Bond auction is now showing 1.1% APR. While it is obviously less than the up to 3% returns offered by the sweetest building deals (already 3 taken in 2-N), it is also much easier to administer, and both beats gold's 0.5% average return and comes at no downside risk of the principal!

Gold and bonds hedge each other nicely: It is possible to construct a portfolio that has 0% worst case and yet a nice upside over 1 realyear investment period. If you have 1,000 to invest, buy enough bonds to recoup the 1,000 after the year, and invest the rest in gold. Everything the gold yields is pure profit. The only risk is of course that the Town goes bankrupt but that is getting less and less of a concern - we are almost a year old now!

I am not bashing gold but trying to sell bonds, forgive me.

Prepare yourselves! PJ will soon announce here the newest version of the exchange, which is rumored to be wonderful!

I have a travel day tomorrow so have to go to sleep now, but will come back in a few hours to check it out! This time you get to see it before me

(Instructions by PJ soon...)

Wow - the progress towards the goal is astounding. Only 21.9% remaining! You can see the situation in /LitSoc and subscribe yourself!

The land King previously had on offer was changed to a 100 mil cheaper, 4 q bigger and more centrally located lot in 3-N (thanks NewCorp!) In addition we have reserved 600 mil for the building, but more could be used (some of the land can be made rentals, to provide the income to offset the losses of book printing...  )

Greetings from NewCorp

NewCorp (#60) is established 1522 and reformed to its current business in 1600. The intention is to handle the Royal commercial assets, mainly land development and quarrying. In practice, NewCorp buys land in "chapelry auctions", waits, quarries it, tries to sell the stone, and zones the land for further use. We aim to mainly operate in wholesale.

In addition to the King, NewCorp has 4 other members (we are not seeking new members and trading with the stock is disallowed). The nominal share capital is currently 28.1 bil, making us the most valuable company in the game. We are also the largest holder of urban land.

We have released 3 chapelries from quarrying, and the land is offered at some of the best terms available, starting from 12.85 mil/q!

- In 3-N, the connector chapelry, large tracts are open next to the Culture & Science Boulevard going from the center to B.8
- In 5-SE, 2 very nice lots surrounded by streets throughout, facing south over Tavastia Boulevard are offered
- In 2-N, the connector chapelry to B.6, 7 lots are left after Lord Thud bought his. These are all gardened and feature a "Summer House", a 2-story 100% lux, all elaborate, pedestaled, terraced, high lobby, much windows construction, which is able to be used for rental, CUL or SCI. All except one have the view to the House of Magnificence, and the HofM park.

We seek to raise money quickly for the impending chapelry purchases, so the prices are very lucrative. The 2-N properties (even in their current state as mostly unbuilt, and centrality as "suburban" which might change to the better soon) yield ~3% APR.

Every time you buy from NewCorp (with the exception of stone trades worth <100 million), you get a NC1600C collector coin worth 3 CKG! If the value of the trade is 500 mil or more, 2 coins are given.

NewCorp actively manages the land & property portfolio, so don't expect the lots to only go down in price, they might also go up, and big lots may be rezoned to smaller ones, and houses built etc. Snatch the opportunity when it is present!

The Hypothecary Bank wants to announce that since the current NewCorp offerings are so tightly priced, 50% of the purchase price can be financed by a 30-year loan from the Bank at a cutthroat rate of 1.9% (50% is the standard, but the rate is variable based on the solidity of the collateral). This makes possible even profitable leveraged investments.

What is more, the King has not forgotten that not all Barons and higher have a tax-free haw. We are not giving free land at present, but since the area in 2-N is such magnificent (overlooking HofM and near the haw chapelry of 2-NW and the Summer Pavilion), every noble not already having a haw who buys a lot here, will have it designated as a haw (1 per char).

We would like to sell the eternal subscriptions as well (they are easiest to implement in Ultima, like shares that get books as a dividend ) might you think this to be a worthy idea or do you think the price needs to be reduced?

Thank you. Not that it is in any way related to the recent purchase, but:

Dr. SS, the King's Physician, is gifting his special 20 CKG pure gold goin SS1600T, obverse: ""MENS SANA IN CORPORE SANO" surrounding the Snake on the cross, below: "1600", reverse: "PALATIUM CULTURAE ET SCIENTIAE" surrounding the Palace of Culture & Science, below "SITUS A.D. 1559"", to other characters. He has not divulged the objective criteria, perhaps because he wants to retain the supreme right to give the coins according to his pleasure. (The same way as volumes have been written about Noble promotion even though the rule is "King's pleasure".)

Master Crichton and Master Mooo have been sent the coin, gold included, as is the custom these days.

Affordable living in the Old Town - rare opportunity!


It has been a while since middle-to-low income housing was last built in the Old Town (the previous attempts, Expert Village and Master Village, both foiled due to the land becoming 10x as expensive as the house).

Now the opportunity is in East Alley, the city-wall side in the Village (1-SE). The lots are mainly only 45 sqm and the units are 19 sqm total in 2 floors, with sun in 2 directions, front lawn and roof terrace, 60-80% lux, elaborate front facade, and - located in the Old Town!

Prices start as low as 29 mil, they are calculated to give a 1% APR after the extra tax therefore purchasing any or all of them for investment is an option as well!

All journalists are.

The negative journalism has managed to kill my silver business (which the months-long seizure of all my assets by the government cound not accomplish!) and a restaurant chain I was involved with. With both, I made the mistake thinking that the publicity in general would bring more users than the bad publicity in particular would cause us to lose.

With a game, especially a targeted one (and anonymous one), I am again tempted to believe that if someone shoots bad journalism at us, it will not be effective because "our target group are the most self-sufficient and intelligent people who are immune to leftwing writings". The game is so much bigger. It is an attempt to regenerate the attitude in "the world of 1991" when global warming was a joke, not propaganda to be parroted at gunpoint, computer games could do what they want, laughing at subjects now forbidden was allowed, some of the governments tried to at least act as the servants of the people... and at the same time recreate "the world of 1605", the century of the Sun-King, with the pervasive culture we have already nurtured in the game for 11 months.

It is not just an investment, it is also not just a game. It is a virtual world - not a "counter-culture" because the mainstream culture is the one that has become counter to life. This is the true society recreated virtually, and yeah it is hard to explain outside of the context, like life itself. All the ones who play can testify how it feels. They have the knowing look in their eyes, as if they had had access to secret mushrooms that make them understand things that the others don't. And yes we have mushrooms in the game.

I think the low marketcap depends on:

- BTC maximalists abhor all altcoins
- No effort has been made to reach anyone except a subset of Bitcointalk
- In the subset, many who are not BTC maximalists, have bought in (but this is not many)
- Mathematically, it does not make sense to buy a too high percentage - if it flies, you are rich; if it doesn't, you lose less money
- Everyone who thinks this way, does not contribute much to the buying pressure
- Inflation is still high
- Price stickiness has made the "correct price" 0.002


To break the situation, we need new investor money, or a killer app which will absolutely clean the table... 

While the Long Bond offering is going on, and will for 2 more days, the math-wizards in the Villa Rotonda have developed an instrument that might make obsolete all the other Town debt issues (especially if we consider that the other instruments are not issued to raise money - which is not really needed - but to provide feedback of the economic health of the Town and the game).

The Consol.

What the Long Bonds have tried to establish, and failed so far, is an interest rate regime. The issue prices of the long bonds give some information, but as far as is known, no aftermarket trades have ever been conducted, making the "economic barometer" wish unfulfilled.

Consols are a combination of bond and equity - a perpetual obligation to pay a fixed sum per year. Because it pays a fixed sum, it resembles a bond. But the principal is never paid - as in an equity.

If the Town would issue consols that pay 0.1 mil per year for instance - forever - valuing these would be very easy: the price of one unit would be y/r, where y is the yield (0.1 mil) and r is the gameannual interest rate. At the current situation in the Long Bond auction, the APR is 1.1%. Therefore the 0.1 mil paying perpetual would be valued at 0.1/0.011 = 9.0 mil.

And that is all you need! When you buy a consol, you know exactly how long it takes to get your money back (90 weeks, in this example). What you don't know is how the value of the consol will develop. It is most probable that if the game becomes more solid, the interest rate will become lower and lower, raising the value of the consol in the process. When we get to the 5% per real-year level, reasonable in mortgages, the price of the consol bought at 9 mil becomes 0.1/0.001 = 100 mil! Therefore not only you receive about 1% per week on your investment, but also the residual value of your investment grows 11x!!

The interplay of gold and consols (and real bills) was a key playground in finance in 1750-1913. We in the Villa Rotonda School of Economics are eager to reinstitute it!

When all the Town bonds are consolidated to be one, single item, the tracking of its price and, hence, the interest rate, will be so easy! The way of victory with gold has been because it is fungible, liquid, and pays interest relative to the success of the game. The way of victory with consols will be that they are fungible, liquid, and pay a fixed interest irrespective of the success of the game. Switching from one to the other keeps the dividends flowing, and at the same time rewards the speculator with a double move in the asset prices!

When the game was 2 months old, the Long Bond auction (now item_id "LB1615") showed the interest rate of 300% for a realyear. Clearly that was realistic for a project just started, and projecting 6 times longer to the future than it had existed!

Now whether we settle at 72% or go to 60% or 50%, the next year there will be laugh anyway. Either to how easy it was to get free money, or how silly people were that it could be paid back.

But personally I am too busy in developing the game to have any thought that it might fail...