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Warning: Moderators do not remove likely scams. You must use your own brain: caveat emptor. Watch out for Ponzi schemes. Do not invest more than you can afford to lose.

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Author Topic: Who Pays What?  (Read 35075 times)
DeaDTerra
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September 07, 2012, 09:03:59 AM
 #261

This post is a must-read and have to go in the hall of fame of great post.
It's also basically what some of us have been saying for quite some time now: Real businesses can't promise a permanent interest rate that is this good.  I guess it just had to be said by someone you hadn't already decided is stupid. Oh well, as long as you finally get a clue it's all good.
It is the way that it's said in that changes the meaning of it. We all agree that it's not sustainable forever but that doesn't mean it can be legit and not a ponzi right now. You might not be able to pay x% a week for ever because it's not sustainable but that doesn't meant that right now if you are doing it you are a ponzi. That's basically what 90% of the people that discuss this say, they have this weird argument that because it's not sustainable for all future it must be a ponzi, which is of course not always the case.
//DeaDTerra
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September 07, 2012, 01:42:12 PM
 #262

This post is a must-read and have to go in the hall of fame of great post.
It's also basically what some of us have been saying for quite some time now: Real businesses can't promise a permanent interest rate that is this good.  I guess it just had to be said by someone you hadn't already decided is stupid. Oh well, as long as you finally get a clue it's all good.

I know that. But it's not because the market rates are higher than normal that these business are necessarily "ponzi". The market is expanding at an insane speed right now, causing those insane rates. Nobody has promised those rates forever. The ones who think these rates are going to last more than 1 year are the one crying "scams" everywhere.

+1 to what DeaDTerra said.

It's not really the market expanding as just people willing to borrow. I haven't seen too much economic activity in Bitcoin to warrant a 3% /week investment rate ON TOP of the 8% a month deflation growth. If it's true that the reason people are borrowing is because they see Bitcoin going up, want to have it NOW, and prefer to borrow at 3% for a week while their money transfers instead of preying 4% to instant deposit places, then that's a pretty shaky business to be based on, since a reversal of Bitcoin growth or a new instant deposit service with lower fees will instantly kill borrowing incentive. Likewise, as I mentioned, a huge spike in Bitcoin prices will likely cause borrowers to default.
Due to all this, I would say the high rates are warranted, since high risk = high rates. This, however, does not mean that none of these HYIPs are NOT ponzis, either. We just don't know until they become more transparent. And in the end, the choice is really between a ponzi scam, and a 1980's style Savings and Trust, both of which have histories of great financial collapse.

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October 12, 2012, 08:09:59 AM
 #263

so... ummm... Why is Kluge still rated AAA?
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October 12, 2012, 08:13:00 AM
 #264

so... ummm... Why is Kluge still rated AAA?

It is the only rating  Grin

for that matter why is ziggy still AA?
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October 13, 2012, 03:48:29 AM
 #265

If you bothered to read the OP, you'll see that those ratings are months old.  Enron had a good rating, until they crashed and burned.  So do various countries - ratings are (and always have been) a historical view at a point in time.  - and it was a simple 0-6 score, so those that want to compare RaboBank to Bitcoin are equally misguided.  Ziggy and co rated 5 out of 6 in bitcoin means they had reasonable capacity to pay at the time.  However, any half-arsed attempt at looking at what their "high risk" bonds (fonds) were doing would have avoided them for their lower risk offerings - they said they were investing in Pirate to achieve those results.
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October 13, 2012, 03:52:35 AM
 #266

If you bothered to read the OP, you'll see that those ratings are months old.  Enron had a good rating, until they crashed and burned.  So do various countries - ratings are (and always have been) a historical view at a point in time.  - and it was a simple 0-6 score, so those that want to compare RaboBank to Bitcoin are equally misguided.  Ziggy and co rated 5 out of 6 in bitcoin means they had reasonable capacity to pay at the time.  However, any half-arsed attempt at looking at what their "high risk" bonds (fonds) were doing would have avoided them for their lower risk offerings - they said they were investing in Pirate to achieve those results.

Lets look at it this way. You're just as good as those guys that gave Enron a good rating. Let's all gather and worship your mediocrity.
Yolocoin
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October 13, 2012, 06:37:20 PM
 #267

If you bothered to read the OP, you'll see that those ratings are months old.  Enron had a good rating, until they crashed and burned. 

It's your duty as a rating agency to rate REAL risk, and you've clearly failed in doing so.
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October 13, 2012, 06:41:08 PM
 #268

No, see you people are clearly to stupid too understand how rating works as outlined below.

I'm an eagle-eyed investor. Please change all ratings to FFF, for the sake of accuracy.

Thank you Mosrite.  However, you're also to stupid to understand the rating metrics and grades used in the real world, let alone the ones used as general guidance here.  When you can provide some reasons for your recommendation, then someone might take you more seriously.
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October 15, 2012, 07:01:50 AM
 #269

However, any half-arsed attempt at looking at what their "high risk" bonds (fonds) were doing would have avoided them for their lower risk offerings

Unfortunately, ZiggiStar failed to pay his guaranteed and low risk offerings too. His high risk and guaranteed offerings turned out to be equivalent.
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October 15, 2012, 07:06:14 AM
 #270

If the person rating had to pay a massive fine to the community for getting it wrong things might be different imo.

I landed in this country with $2.50 in cash and $1 million in hopes, and those hopes never left me.
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October 16, 2012, 12:13:02 AM
 #271

No, see you people are clearly to stupid too understand how rating works as outlined below.

I'm an eagle-eyed investor. Please change all ratings to FFF, for the sake of accuracy.

Thank you Mosrite.  However, you're also to stupid to understand the rating metrics and grades used in the real world, let alone the ones used as general guidance here.  When you can provide some reasons for your recommendation, then someone might take you more seriously.


Holy fuck.  What a piece of shit. 
Yolocoin
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October 16, 2012, 07:59:53 PM
 #272

If the person rating had to pay a massive fine to the community for getting it wrong things might be different imo.

Seriously? You expect somebody who offer a free service to be fined if something goes wrong?

LOL yeah, things would be surely different. No-fucking-body would even risk to rate anyone else without getting paid enough.

Uhhhh yeah, that regularly happens in the real world when people give "financial advice" paid or not.  Criminal negligence is still a legal liability.
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October 16, 2012, 08:51:25 PM
 #273

If the person rating had to pay a massive fine to the community for getting it wrong things might be different imo.

Seriously? You expect somebody who offer a free service to be fined if something goes wrong?

LOL yeah, things would be surely different. No-fucking-body would even risk to rate anyone else without getting paid enough.

Uhhhh yeah, that regularly happens in the real world when people give "financial advice" paid or not.  Criminal negligence is still a legal liability.

You have any examples?
BorderBits
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October 17, 2012, 12:00:51 AM
 #274

If the person rating had to pay a massive fine to the community for getting it wrong things might be different imo.

Seriously? You expect somebody who offer a free service to be fined if something goes wrong?

LOL yeah, things would be surely different. No-fucking-body would even risk to rate anyone else without getting paid enough.

Uhhhh yeah, that regularly happens in the real world when people give "financial advice" paid or not.  Criminal negligence is still a legal liability.

Didn't Pat McStarfish charge Ponzi operators to go through their financials in order to determine their rating?  He is as guilty as the Ponzi operators because his ratings gave many in the community confidence.
PatrickHarnett
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October 17, 2012, 07:52:04 AM
 #275

no
Yolocoin
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October 18, 2012, 05:53:22 PM
 #276

If the person rating had to pay a massive fine to the community for getting it wrong things might be different imo.

Seriously? You expect somebody who offer a free service to be fined if something goes wrong?

LOL yeah, things would be surely different. No-fucking-body would even risk to rate anyone else without getting paid enough.

Uhhhh yeah, that regularly happens in the real world when people give "financial advice" paid or not.  Criminal negligence is still a legal liability.

You have any examples?

USA: http://www.turnaround.org/Publications/Articles.aspx?objectID=2661
USA #2: http://manchester.patch.com/articles/glastonbury-financial-advisor-in-lawsuit-involving-former-mayor-found-liable-for-1-45-million
UK: http://www.chaselaw.co.uk/financial_advisers.html
NZ: http://www.stuff.co.nz/business/money/7498595/Adviser-liable-for-investors-Bridgecorp-loss

So it's not uncommon, nor is it just a USA thing.  There are real-world repercussions for dishing out negligent advice.
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October 18, 2012, 07:48:26 PM
 #277

Isn't every financial ratings agency in the real world giving negligent advice? How the hell does the USA have a AAA rating, with unsustainable debt? They should have an F, and by micons standards it should be a F-. People need to stop trying to find new ways to blame patrick for there own stupidity. Either accept your losses for gambling, or go after whoever actually took your money.
PatrickHarnett
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October 18, 2012, 10:10:09 PM
 #278

Also, I was not providing advice - the OP was a collection of information and links to save some people the time and effort of sifting through all of the rubbish that was around some months ago.  It was stated again and again that people should do their own research. 

As a related note, I read with interest a recent rating for a local mobile carrier.  The parent company was rated badly (B-), and their US370M of bonds much worse (CCC+ down to CCC).  S&P had no qualms at downgrading something they had previously rated higher.
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