.

[PatrickHarnett]

PPT.E is due for buyback in around three hours.  I have been watching and waiting for developments to the BS&T unwinding process, but at this stage have not seen any progress.  This does not conclusively identify as a default of BS&T under the PPT.x contract and it is better for customers that it isn't. 

Given withdrawals to make PPT.E payments are not available, the buy-back will be delayed until such time as either funds are available or a default is confirmed.

How?

A missed payment is by definition default.....and after reading the contract I do not see any exception for "intent to pay later". 

While I tend to agree, I am looking at how I can provide the best outcome for bond holders.  Also, in most contracts there is a period for remedy (although it is not written into the simple PPT.x terms.)

The choice is either:
a) I pay 0.32 for all outstanding bonds given there have been no payments from BS&T for over a week, or,
b) Everyone waits to see if the funds become available and I pay 1.28.

Actually, option (a) is better for me as I would only be obligated to pay 0.32 and if/when BS&T pays out, I would get to keep the difference.  However, option (b) is better for bond holders.

The purpose of my post was to state something rather obvious, even if it is not particularly welcome.

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[PatrickHarnett]

It's as if the haters want the bitcoin economy to fail as I do not see them doing anything positive.

HYIPs are not "the bitcoin economy". Passing coins around and giving each other imaginary fractional increases on deposits is not productive and is not a service.

Correct, but the are a part of it.  The same logic suggests real life banks are not productive, nor provide a service.  The efficiency of capital markets and the lowered cost of seeking funds is actually a tangible benefit, and that is why they exist.  However, this is more a discussion for economics rather than this particular security.

[stochastic]

The choice is either:
a) I pay 0.32 for all outstanding bonds given there have been no payments from BS&T for over a week, or,
b) Everyone waits to see if the funds become available and I pay 1.28.

Choice:
c) pay 0.32 dividend to each bond holder.  If and when BS&T returns the loaned money do a buyback to bondholders for 0.96 per bond.

[PatrickHarnett]

The choice is either:
a) I pay 0.32 for all outstanding bonds given there have been no payments from BS&T for over a week, or,
b) Everyone waits to see if the funds become available and I pay 1.28.

Choice:
c) pay 0.32 dividend to each bond holder.  If and when BS&T returns the loaned money do a buyback to bondholders for 0.96 per bond.

That is an option although outside the bounds of the contract.  (and if GLBSE ever comes back online)

[bitcoinBull]

It's as if the haters want the bitcoin economy to fail as I do not see them doing anything positive.

HYIPs are not "the bitcoin economy". Passing coins around and giving each other imaginary fractional increases on deposits is not productive and is not a service.

Correct, but the are a part of it.  The same logic suggests real life banks are not productive, nor provide a service.  The efficiency of capital markets and the lowered cost of seeking funds is actually a tangible benefit, and that is why they exist.  However, this is more a discussion for economics rather than this particular security.

The purpose should be to support and enable productive activity, not for "seeking funds". That's putting the cart before the horse.

When everyone is happy "investing" in nothing more than promised profits with no discernable business model, then they aren't serving or helping anybody (just gifting one person). And that makes it more difficult for honest businessmen to access funds. Because who would bother with something risky that requires actual work when you can earn 7%/wk with pirate and "its highly unlikely that he'll default".

Someone who wants funds doesn't even have to build a scammy coinscalper like front-end anymore. People have gotten so lazy with greed.

[PatrickHarnett]

Yes, some people are lazy, and others are greedy.

[bitcoiners]

Yes, some people are lazy, and others are greedy.

And some people claim that $5 million in BTC isn't a lot of money.

[PatrickHarnett]

Yes, some people are lazy, and others are greedy.

And some people claim that $5 million in BTC isn't a lot of money.

(beware the context) It's not if you're going to "run", but if you've got it in the bank and living comfortably, it would be ok.

[trifith]

The choice is either:
a) I pay 0.32 for all outstanding bonds given there have been no payments from BS&T for over a week, or,
b) Everyone waits to see if the funds become available and I pay 1.28.

Choice:
c) pay 0.32 dividend to each bond holder.  If and when BS&T returns the loaned money do a buyback to bondholders for 0.96 per bond.

I would vote for either Option A or Option C. Of course I only hold 5 PPT.x bonds, so I don't count for much.

[ErebusBat]

Yes, some people are lazy, and others are greedy.

I am both lazy AND greedy.

[nrd525]

I just realized that my (and another person's) valuation of these bonds (1.0528 or something like that - valued in terms of direct BTC investment in Pirate) was wrong.

In the event of a default you can collect up to 3 weeks interest (0.21) that you do NOT have to pay out to investors, and then pay out the 0.34 partial guarantee.  I guess on average you'd be collecting around 1.5 weeks of interest (0.105), so the guarantee is only costing you 0.235.  This would depend on what day you realize the operating is closing and thus stop issuing bonds.

Effectively the one-month fixed term offloads part the risk of a default on to the bond purchaser, making the guarantee less useful.

So I'm guessing the real value of the bonds (in Pirate deposit equivalent - which is current not equal to having BTC on hand) is closer to 1.02 or 1.03.  And this explains why you were still selling them when the average price was < 1.04.

This is my tentative conclusion - feel free to double check.

[PatrickHarnett]

Not wanting to get into the math, but the "collected" interest would be in the defaulted BS&T account.

In other news, there isn't much.  I note that nanotube and the Pirate/Vandroily bet has a good definition of default.  Other than the comments that it "would take a week" which gets us to US Central time on Monday, I'm still waiting for a definitive result.

[nrd525]

And to calculate the value of the contract, people were relying upon the impact of compounding interest (and the bonds past-through had to keep the compounding going so you could pay out - you essentially gave away your right/ability to withdraw early as well).  So my earlier post is plain wrong.

A month long contact is riskier as you cannot pull it out if, for instance, you felt he was 2-3 weeks away from a default.  But this kind of thing is hard to quantify (and you are also saving yourself from making wrong predictions with a month long contract).

[PatrickHarnett]

A couple more days have rolled past, and there is still no news from BS&T.  Because of the lack of returned funds from BS&T I am in the process of moving additional coins to GLBSE in preparation for paying out the insurance.  To maximise the potential for recovery, the insurance of 0.32BTC per bond will be paid on each of the three outstanding bond issues in weekly intervals two weeks behind the planned redemption date.  That is:

PPT.E on 1-Sept at 00:00 UTC
PPT.A on 8-Sept at 00:00 UTC
PPT.B on 15-Sept at 00:00 UTC

[EskimoBob]

A couple more days have rolled past, and there is still no news from BS&T.  Because of the lack of returned funds from BS&T I am in the process of moving additional coins to GLBSE in preparation for paying out the insurance.  To maximise the potential for recovery, the insurance of 0.32BTC per bond will be paid on each of the three outstanding bond issues in weekly intervals two weeks behind the planned redemption date.  That is:

PPT.E on 1-Sept at 00:00 UTC
PPT.A on 8-Sept at 00:00 UTC
PPT.B on 15-Sept at 00:00 UTC

Did you see the post in IRC, #btcst?

Code:

<pirateat40> Notice:  If you are a PPT operator please contact me via PM.  Thanks

[imsaguy]

Did you see the post in IRC, #btcst?

Code:

<pirateat40> Notice:  If you are a PPT operator please contact me via PM.  Thanks

The suspense!!!

[PatrickHarnett]

Did you see the post in IRC, #btcst?

Code:

<pirateat40> Notice:  If you are a PPT operator please contact me via PM.  Thanks

No, but it was pointed out to me a while after I had made my earlier post.  So I have seen it now.

Currently I know nothing new and the actions I've been taking the past couple of days are not affected until something actually happens.

[trifith]

A couple more days have rolled past, and there is still no news from BS&T.  Because of the lack of returned funds from BS&T I am in the process of moving additional coins to GLBSE in preparation for paying out the insurance.  To maximise the potential for recovery, the insurance of 0.32BTC per bond will be paid on each of the three outstanding bond issues in weekly intervals two weeks behind the planned redemption date.  That is:

PPT.E on 1-Sept at 00:00 UTC
PPT.A on 8-Sept at 00:00 UTC
PPT.B on 15-Sept at 00:00 UTC

This seems like a fair closeing plan. I already devalued these bonds when the PPT.E did not pay out on schedule. I'm rather disapointed this turned out to be a scam, but not really suprised. My thanks to Patrick Harnett, BurtW and the others running these bonds for and excelent job.

Overall, I'm one of the lucky few to profit from BTCS&T. I diversified at the right time. I even managed to sell my remaining PPT.x bonds at better than insurance rates. Guess theres still some faith in pirate, but I don't buy it anymore.

[PatrickHarnett]

Well, as people probably know, yesterday Pirate confirmed that he is in default in terms of repaying funds.  If that is simply a timing issue or a notice that there will be no repayments is not clear as no additional information was given and I'm still in the dark about what happens next from his side. 

[MrTeal]

Well, as people probably know, yesterday Pirate confirmed that he is in default in terms of repaying funds.  If that is simply a timing issue or a notice that there will be no repayments is not clear as no additional information was given and I'm still in the dark about what happens next from his side. 

Given the lack of information from Pirate, I'd say the obvious play here is to invest the insurance fund in Dank Bank, and then buy everyone a mansion next year.