Why I used to trust Patrick Harnett

[dooglus]

The only question to my mind is whether he coughs up the loses himself or passes some of the pain to his usurious creditors. If he does the former, especially if he tries to spread the loses evenly, I'm not sure I could fault him.

Do you mean if he does the latter?  If he does the former, there is no spreading of losses.

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[Mosrite]

Did Harnett default yet? I notice his "wife" hasn't had much to say lately.

[Puppet]

Outside of the BS&T account, as of today, I have 10,794 BTC outstanding in loans and 10,586 BTC held on deposit (plus 160 in the 7Seas fund).  This is the core business of StarFish BCB and what generates the return for people looking for something other than BS&T exposure.

quoting this before its deleted. Subtract hashkings 1000BTC and Patrick is already in trouble.

[Mosrite]

So its easy to get these returns on paper as long as you naively assume almost everyone will pay you back, but the reality is likely a whole lot different. I will be very curious to see how much of his loans Patrick will be able to recover, considering how many of the people he totally trusted have already defaulted and/or are now branded as scammers.

Patrick scammed himself, unfortunately.

I think that's right.

My thoughts (not that anyone asked):

1. WifeOfStarfish reads like a sockpuppet to me. If I were Patrick, I'd not want to show this to anyone.

More like a meat puppet.

[CoinCidental]

So its easy to get these returns on paper as long as you naively assume almost everyone will pay you back, but the reality is likely a whole lot different. I will be very curious to see how much of his loans Patrick will be able to recover, considering how many of the people he totally trusted have already defaulted and/or are now branded as scammers.

Patrick scammed himself, unfortunately.

I think that's right.

My thoughts (not that anyone asked):

1. WifeOfStarfish reads like a sockpuppet to me. If I were Patrick, I'd not want to show this to anyone.

More like a meat puppet.

quoted for meat puppet LOL

[Frankie]

The only question to my mind is whether he coughs up the loses himself or passes some of the pain to his usurious creditors. If he does the former, especially if he tries to spread the loses evenly, I'm not sure I could fault him.

Do you mean if he does the latter?  If he does the former, there is no spreading of losses.

Yes. Sorry.

I don't think it's unreasonable for everyone to take a haircut.

[Puppet]

I don't think it's unreasonable for everyone to take a haircut.

But Patrick is still paying out in full. Unless he still plans on doing that for everyone, that seems unfair.

[JoelKatz]

2. Joel offered the choice that Patrick is a scammer himself or an idiot, but I'd like to offer a marginally kinder alternative, which I think is the truth: he was duped.

If you continue to be duped while many people are clearly and patiently explaining to you why and how you are being duped, that's straying into idiot territory.

If my theory is right, he's a double victim--first from Pirate, and second from many of the borrowers who were unsurprisingly only paying high rates to scam/gamble/invest in Pirate (same difference). The only question to my mind is whether he coughs up the loses himself or passes some of the pain to his usurious creditors. If he does the former latter, especially if he tries to spread the loses evenly, I'm not sure I could fault him.

Considering that he could probably run away with everyone's money, claim that it was all lost, and little to nothing would happen, I agree that it's hard to find too much additional fault. It's not like the people who loaned money to him weren't also warned that he was operating with a business model that was vulnerable to default and there were specific warnings that everyone had much more Pirate exposure than they thought they did.

From the point of view of the community, it won't help to have Patrick suffer more. However, if his depositors all suffer at least a bit, that will likely help the community a lot.

[bitlane]

Well, this has taught me alot. I want to thank everyone for their input.

I, myself, just got food poisoning from a Chicken Shack type of place, that people warned me to NOT eat at.

With the knowledge gained in threads such as these, today I will be going after the guy that was dressed up in the Chicken Suit in front of the shop, with the advertising sign on....as this is obviously not a waste of time, versus going after the shop itself, right ?



Thanks guys. I appreciate all of the tips learned here.


Let this be a lesson to Chicken Suit advertising guys everywhere..... I AM COMING FOR YOU.

[JoelKatz]

With the knowledge gained in threads such as these, today I will be going after the guy that was dressed up in the Chicken Suit in front of the shop, with the advertising sign on....as this is obviously not a waste of time, versus going after the shop itself, right ?

If you start to adjust your hypothetical to match the situation, the conclusion becomes quite the reverse. For example, have the guy in the chicken suit broker the deal taking a cut of your money in the process. Or have the guy in the chicken suit promise to insure you against the very harm that materialized. Or have the guy in the chicken suit state that he has secret reasons to suspect the food is actually safe.

[bitlane]

With the knowledge gained in threads such as these, today I will be going after the guy that was dressed up in the Chicken Suit in front of the shop, with the advertising sign on....as this is obviously not a waste of time, versus going after the shop itself, right ?

If you start to adjust your hypothetical to match the situation, the conclusion becomes quite the reverse. For example, have the guy in the chicken suit broker the deal taking a cut of your money in the process.

The Chicken Suit guy profited none the less. I took a coupon from him, for which he gets a flat rate bonus for each one taken/used, along with his hourly rate for advertising inside the suit.

[JoelKatz]

The Chicken Suit guy profited none the less. I took a coupon from him, for which he gets a flat rate bonus for each one taken/used, along with his hourly rate for advertising inside the suit.

Merely getting a profit is not enough. CSG would not be responsible in your hypothetical. It would be a closer case if he brokered the deal.

I agree that you do need all the elements that are present here. You can't just take one of them and try to make the same argument.

[Monster Tent]

I don't think it's unreasonable for everyone to take a haircut.

But Patrick is still paying out in full. Unless he still plans on doing that for everyone, that seems unfair.

I agree. And trying to cause further panic to create an even worse run on  the bank is also unfair.

[Frankie]

I don't think it's unreasonable for everyone to take a haircut.

But Patrick is still paying out in full. Unless he still plans on doing that for everyone, that seems unfair.

I agree. And trying to cause further panic to create an even worse run on  the bank is also unfair.

Yeah, that's madness. Best thing to do is payback everyone pro rata now and set dates in the future for additional payments when/if loans are returned.

Of course this is assuming he was really duped and lost his personal money with Pirate before realizing his own lending was in significant risk (which is in doubt, as Joel points out).

[PatrickHarnett]

Did Harnett default yet? I notice his "wife" hasn't had much to say lately.

WifeofStarfish was visiting her father the past few days - sorry, she's not a sockpuppet, but I don't think she'll be jousting with the trolls much.

I've had some loan repayments come in, and will be setting up a batch of pro-rata payments today.  yes, there are a bunch of cascade defaults occurring, and there is a healthy balance of people that have asked for their deposits returned. 

[JoelKatz]

I've had some loan repayments come in, and will be setting up a batch of pro-rata payments today.  yes, there are a bunch of cascade defaults occurring, and there is a healthy balance of people that have asked for their deposits returned.

If it were me, I'd ignore withdrawal requests after default was announced and make pro-rata payments as repayments come in. I don't see anything wrong with splitting your losses with your depositors. Their decision to invest was just as bad as your decision to offer the service.

[Puppet]

I've had some loan repayments come in, and will be setting up a batch of pro-rata payments today.  yes, there are a bunch of cascade defaults occurring, and there is a healthy balance of people that have asked for their deposits returned.

If it were me, I'd ignore withdrawal requests after default was announced and make pro-rata payments as repayments come in. I don't see anything wrong with splitting your losses with your depositors. Their decision to invest was just as bad as your decision to offer the service.

mostly agree, although it would be good to know who defaulted and for how much. If you are going to pass losses on to investors, its only fair they know (and can verify) who they owe the loss to.

[JoelKatz]

mostly agree, although it would be good to know who defaulted and for how much. If you are going to pass losses on to investors, its only fair they know (and can verify) who they owe the loss to.

I agree. If losses are being passed on, then the depositors deserve a full statement of total obligations, total assets, the form of those assets, and any defaults that are being passed on. This serves two important purposes. First, it lets depositors know what they can reasonably expect. Second, it reassures depositors that they are not being scammed and in fact suffered legitimate losses.

[WifeOfStarfish]

Did Harnett default yet? I notice his "wife" hasn't had much to say lately.

You're a sad person

[Mosrite]

Did Harnett default yet? I notice his "wife" hasn't had much to say lately.

You're a sad person

Obvious meat puppet.