Starfish BCB - Loans and Deposits

[JoelKatz]

Pull your head in Micon. Patrick is solvent but pirate defaulting/whatever you call it led to a bank run of panicky investors. High School economics students understand how thiat works. Everyone will be paid and I would like to see an apology posted here from you when the process is complete. Patrick, ignore the fucking trolls.

If that happens, I will apologize to both of you.

[WifeOfStarfish]

Pull your head in Micon. Patrick is solvent but pirate defaulting/whatever you call it led to a bank run of panicky investors. High School economics students understand how thiat works. Everyone will be paid and I would like to see an apology posted here from you when the process is complete. Patrick, ignore the fucking trolls.

If that happens, I will apologize to both of you.

Excellent thank you. You will.

[dooglus]

rates will be dropping a nominal 1%/month

You mean dropping to 1%/month, right?

Otherwise in a few of months the rate would be negative!

[PatrickHarnett]

rates will be dropping a nominal 1%/month

You mean dropping to 1%/month, right?

Otherwise in a few of months the rate would be negative!

yes, that sounds more likely (although the other option could be interesting)

[Soros Shorts]

Made a request to pull out a few hundred BTC several days ago. Happy to say that I just received a partial payment amounting to about a third of that. I think that this is a fair way to deal with the situation - in a possible bad case scenario the effects of any loans that could later turn out to be slow/toxic will be distributed pro rata amongst the depositors.

[Micon]

Made a request to pull out a few hundred BTC several days ago. Happy to say that I just received a partial payment amounting to about a third of that. I think that this is a fair way to deal with the situation - in a possible bad case scenario the effects of any loans that could later turn out to be slow/toxic will be distributed pro rata amongst the depositors.

the fact that Patrick is slow to honor withdraw requests should be alarming to anyone involved in this scam.  He (and his wife) seem to breed a culture of ultimate, blind trust in what Patrick says. 

The users that are caught up in the scam and don't understand it frequently lash out at me with hatred.  "Go away Micon, you are wrong this time"  So far I'm batting 1000%, and it's not hard to do because these are such blatant scams.

Anyone invested in this go ask a CPA to look at this thread.  Ask a lawyer, doctor, or accountant to look at this.  Ask a bank teller or anyone over 60 that is solvent.  Please, don't take my word for it - ask someone financially smart that you trust and they will tell you as I did. 

[Puppet]

In a possible bad case scenario the effects of any loans that could later turn out to be slow/toxic will be distributed pro rata amongst the depositors.

You can bet your other 2/3rd that this will be the case. Even if Patrick is being sincere, chances are very high that he lend money to people who invested it directly or indirectly in pirate and will be unable or unwilling to repay the debt. Borrow coins at 2% per week and get 5-7% per week. Its a no brainer.  Either Patrick is very gullible or he must have known this.

[Bitcoin Oz]

In a possible bad case scenario the effects of any loans that could later turn out to be slow/toxic will be distributed pro rata amongst the depositors.

You can bet your other 2/3rd that this will be the case. Even if Patrick is being sincere, chances are very high that he lend money to people who invested it directly or indirectly in pirate and will be unable or unwilling to repay the debt. Borrow coins at 2% per week and get 5-7% per week. Its a no brainer.  Either Patrick is very gullible or he must have known this.

I dont think he was lending out at 2% a week...the obvious thing to do is charge 7% a week minimum to borrow so sending to pirate is pointless.

[Puppet]

If you lend out at 7% per week, all you will get is satoshi dice players who have no intention of paying back if they lose their bet.

[Francesco]

That's ok - everyone does what they need to do. 

I was just reading about the potential collapse of the euro with an impending decision from Germany, and a related article about a "perfect storm" for the world economy being discussed at the Ambrosetti Forum.  Maybe there will be some further bank runs, or at least a significant correction. 

Except that even in case of a collapse of the Euro, the risks are much smaller. I could lose maybe 20% due to devaluation if my country exited the Euro, but my principal deposited in the bank is reliably insured up to 100.000€ by an independent dedicated fund; and if worst comes to worse the BCE can always print money to somehow save the day. Nothing like this is present here; you stand the risk of losing everything. So if bank runs are that bad in the fiat world, much more so here...

P.S. I am not a depositor, I am just worried about the future of bitcoin lending. Watching here because you Patrick are the last hope to prove it wasn't all and only scams: if you fail too this subsection of the forum is probably dead for a while as trust is destroyed... and worst of all, we'd have to admit Micon was totally right! Please don't let this happen 

[gene]

Nothing like this is present here; you stand the risk of losing everything.

Yes. And not only because of a bank run. Scams tend to have the same effect.

Watching here because you Patrick are the last hope to prove it wasn't all and only scams: if you fail too this subsection of the forum is probably dead for a while as trust is destroyed... and worst of all, we'd have to admit Micon was totally right! Please don't let this happen

Oh for Christ's sake. "Please say it ain't so, Patrick! Say it ain't so!"

Time to drain the swamp.

[sadpandatech]

That's ok - everyone does what they need to do. 

I was just reading about the potential collapse of the euro with an impending decision from Germany, and a related article about a "perfect storm" for the world economy being discussed at the Ambrosetti Forum.  Maybe there will be some further bank runs, or at least a significant correction. 

Except that even in case of a collapse of the Euro, the risks are much smaller. I could lose maybe 20% due to devaluation if my country exited the Euro, but my principal deposited in the bank is reliably insured up to 100.000€ by an independent dedicated fund;

Not if that 100,000 Euro is bearing interest....  Go read the fine print.

[Soros Shorts]

the fact that Patrick is slow to honor withdraw requests should be alarming to anyone involved in this scam.

There is a bank run going on. Maybe I am stupid, but how would a legit BTC bank honor timely withdrawals without a Federal Reserve or central bank to step in and become the lender of last resort?

Maybe the disagreement is on the definition of scam? If you are expecting a level of guarantee that can only be had with FDIC insurance and central bank backing I think you are asking for too much. I don't think most people here would want to socialize the risks associated wiht BCT lending.

[Francesco]

Watching here because you Patrick are the last hope to prove it wasn't all and only scams: if you fail too this subsection of the forum is probably dead for a while as trust is destroyed... and worst of all, we'd have to admit Micon was totally right! Please don't let this happen

Oh for Christ's sake. "Please say it ain't so, Patrick! Say it ain't so!"

Time to drain the swamp.

I was being mostly ironic after the dots, in case you didn't notice  

Anyway, Patrick please prove it ain't so   Of course you can't trust less these times.

[Francesco]

That's ok - everyone does what they need to do. 

I was just reading about the potential collapse of the euro with an impending decision from Germany, and a related article about a "perfect storm" for the world economy being discussed at the Ambrosetti Forum.  Maybe there will be some further bank runs, or at least a significant correction. 

Except that even in case of a collapse of the Euro, the risks are much smaller. I could lose maybe 20% due to devaluation if my country exited the Euro, but my principal deposited in the bank is reliably insured up to 100.000€ by an independent dedicated fund;

Not if that 100,000 Euro is bearing interest....  Go read the fine print.

Maybe in your country? I specifically checked, I get around 5%/year and I am fully covered by the insurance.

[Bitcoin Oz]

If you lend out at 7% per week, all you will get is satoshi dice players who have no intention of paying back if they lose their bet.

Maybe lending is basically impossible in bitcoin when there are so many high interest scams around.

[Rassah]

I'm not a CPA, as Micon was hoping for, but I do work in finance and understand banking (somewhat).
Real banks, like Patrick's thing here, are never solvent either. They typically only hold 10% or so on hand, investing the rest elsewhere. Typically, the central bank, although being called "the lender of last resort," never actually does any lending. Banks very often borrow from each other.
So the way Patrick can stay solvent and keep honoring other's withdrawals is by doing what real banks do: borrow that money from someone else (or even use his own), forgo any interest profits (or eat the losses), and hope whoever his money is tied up with will pay in time for him to repay his own loans. If the loans Patrick made are paying a high interest, maybe he can even borrow for a lower rate in the real world somewhere, and still keep some profits. And If he made too many risky loans, and can't repay his own lenders because of them, then he was running a bad bank and should liquidate.
Either way, that's how you run a bank: take the risks yourself instead of taking all the profits and dumping the risk on your customers. Having money to give back depositors, even if you borrow from someone else, will also instill confidence and prevent bank runs.

[JoelKatz]

There is a bank run going on. Maybe I am stupid, but how would a legit BTC bank honor timely withdrawals without a Federal Reserve or central bank to step in and become the lender of last resort?

The question is whether there's *only* a bank run going on. There may also be an equity crisis that is masquerading as a bank run.

For example, say someone borrowed from Patrick to invest in Pirate. They may now be slow on interest payments or even making interest payments fully to Patrick out of banked Pirate profits. But that loan will probably go bad unless the debtor opts to pay the principle out of their personal funds. So Patrick may be thinking "I have X bitcoins out there in loans that are current and so will pay on schedule", but he may never see the principle back on those loans.

Things may be much worse than Patrick thinks they are, even if he is 100% completely honest. (Though naive, it's not like lots of people didn't tell him this would happen.)

Maybe the disagreement is on the definition of scam? If you are expecting a level of guarantee that can only be had with FDIC insurance and central bank backing I think you are asking for too much. I don't think most people here would want to socialize the risks associated wiht BCT lending.

A clear statement from Patrick indicating his equity, liquidity, and obligations would go a long way towards setting reasonable expectations and allow his depositors to track whether he's meeting those expectations.

[sadpandatech]

Except that even in case of a collapse of the Euro, the risks are much smaller. I could lose maybe 20% due to devaluation if my country exited the Euro, but my principal deposited in the bank is reliably insured up to 100.000€ by an independent dedicated fund;

Not if that 100,000 Euro is bearing interest....  Go read the fine print.

Maybe in your country? I specifically checked, I get around 5%/year and I am fully covered by the insurance.

What country are you in. And what bank are you refering to?  I'd like to read the fine print for myself because if it's true, myself and many others I know with sizeable deposits would love to bank there and earn interest, and be insured...

[Puppet]

What country are you in. And what bank are you refering to?  I'd like to read the fine print for myself because if it's true, myself and many others I know with sizeable deposits would love to bank there and earn interest, and be insured...

I dont know of any bank deposito that does not earn interest. AFAIK only a rented safe doesnt.
http://en.wikipedia.org/wiki/Deposit_insurance#By_EU_country