According to this announcement on WSE, Ginko is finally, totally, absolutely dead. Nicholas Portocarrero can't make the interest payments and has shut the Ginko Perpetual Bonds, transferring them to WSE Trader Funds (WTF - honestly!) which are the new fraud funds from WSE.

At first glimpse this looks like a good idea. I was chatting to someone who hadn't (as I did) bitten the bullet and pulled out my savings at around the 20c levels, and just prior to this GPBs were circulating at 10c or lower - very not good, and very hard for interest payment capital. However, Shaun Altman has examined the numbers a little more closely, factored in the other frauds that are likely to be transfered to this fund soon, and estimates, if you're lucky, you'll get 0.02c (2% return if you wish to think of it that way) on your defrauded L$. Ouch.

(Thanks to Shaun for the initial link.)

So, I guess this won't reach everyone, given the number of people you still see in the Ginko group saying "Why is the ATM down?" but for those of you that do read it, your ginko former-savings should now be available as GPBs on WSE.

The process is not that complicated - you find a WSE atm in world (there's one on Ginko Financial Island, behind and to the right of the (defunct) Ginko ATM. Type reset password, follow the link to the website and off you go.

If you're determined to cash in your bonds by the way, you'll get a bad price. The best price currently available is L$0.14/share (this changes quite fast, it was L$0.15/share when I started this article), but there are a limited number of offers at that price. You'd be lucky to realise L$125,000 on 1,000,000 bonds (that's former savings of L$1,000,000) - that's 1/8th of the value of your former savings.

I have sold some to see how the interface works. I can't get it to offer me a market sell order, but set a limit sell order with the prices at the best market buy price and it goes smoothly and quickly. In my case I managed to withdraw the money in-world quickly too.

There is a good article here about your options. Nobody Fugazi has some bonds with GPB now (about 183,000 according to a different post), so he's not a disinterested adviser, but then, as you know, nor am I. As I've always maintained in all my financial advice, despite what others seem determined to think, it's up to you what you do. Speaking personally, I'm going to cash enough to be sure I can pay my tier come that time of the month even if it hurts. I'll put the rest up for sale at prices I hope will be reached and won't make me cry for the hit I'm taking.

As I commented here, Ginko has been in it's death throes for a little while. If you head over to their website now, you will see that they have shut for trading completely. I'm not sure what the financial equivalent of the doctor calling time of death is, but 7:30 p.m. yesterday (SL Time) is that time.

You can read commentaries on the death of Ginko by Nobody Fugazi and Benjamin Duranske, with some interesting cross fertilisation of comments.

Ginko has decided to convert all deposits into GPB at a 1:1 rate (based on face value), creating accounts for all its former customers on WSE, something that the close links between them doubtless help make easier.

Nicholas Porocarrero finishes the letter with the comment:
"Ginko Financial will bounce back from this and if you stick with us, you wll not lose anything. If you must sell the bonds, then you must sell, but I advise against accepting low prices."

Whilst I continue to maintain you should make your own choices about what you do with your own money, I've been fairly forthright in my attitude towards stock exchanges, so whilst I continue to wish Nicholas all the best, I, for one, will be selling, and if it hurts my pocket, well so be it.

We've started to get a new baseline for transactions and LindeX exchanges since the gambling ban was imposed, ignoring days such as RFL, days with significant downtime etc.

Since the ban, and excluding obviously bad days, we've got 5 days, giving us a mean transactions of $1,194,400.00 ± $25,793.41. For the five days before the ban we've got $1,682,600.00 ± $137,794.41. So, daily in-world transactions are down by about $488,000, and despite the short baseline, there is a statistically significant difference (p<0.01).

Looking at LindeX daily trading, since the ban the average is $214,600.00 ± $18,091.43, before the ban it was $230,200.00 ± $20,921.28. Although there is a difference of just under $16,000 per day, there is no significant difference in these values - indeed if you rank the numbers across before and after, the second and third quietest days on LindeX were BEFORE the ban.
(continues)

Ginko is basically letting everyone cash out - up to L$1,000,000 a time, if they get the money from somewhere to do it.

According to the letter on their webpage they are seeing support from some customers, whilst getting a fair degree of abuse from other customers, particularly those that (gasp) don't read any of the SL press. (Are there really such people out there?)

If normal banking laws applied to this situation, it's pretty certain this sort of activity would be wildly illegal, and may still constitute fraud and the basis for individual legal cases, although it's not clear to me how it constitutes an ARable offence - just which of the TOS does it break? I find myself hoping, and I do mean hoping, that somehow they pull through. I honestly don't believe it any more, but I can hope.

For those of you interested in the nitty gritty - one has to wonder, despite all the screaming about the gambling ban being the cause, just how much impact the prolonged closure and the continuing poor trading on WSE had on this. I for one didn't know how heavily Ginko was tied in to WSE, and losing trading for over a week, surely had an impact, possibly a bigger impact than the gambling ban.

[UPDATE:] You can read more about the ties between Ginko and WSE here.

Ginko has announced new fixed term deposit accounts, with a higher rate of interest but no access to your money for a fixed period (30 days, 90 days, 180 days, 360 days), and a simultaneous reduction in the standard daily interest rate.

Patchouli seems to have beaten the regular commentators to the punch on this one, with an excellent summary. It's a risk assessment, again. Obviously if you tie your money away you can't get to it. If you're convinced Ginko is going down, this might seems like a stupid thing to do. But, given the ongoing problems people are seeing with withdrawing ANY money, it might work out to be a smart move with at least SOME of your cash - if they do go down you've lost it anyway, if they don't, then you take a short-to-long term lack of access against a long term larger return. This sort of bond will be familiar to many UK savers where you agree to lock your money away for a fixed term to guarantee a better return.

You've got a couple of choices beyond the obvious length of time. You can opt for compound interest, or daily interest paid into your main account, but obviously not compounding. If you trust their numbers, about L$23,000,000 have already gone over, although there's no information about how many people that represents.

As I have always maintained with these things, it's your choice, your risk assessment. I'm just telling you its an option.

Although I report on the economy in SL, I tend to remain on the edges of it - I have a small amount of money in Ginko, but made a decision some time ago that I don't trust the stockmarkets in SL - there are too many steps where things could go wrong:

• CEO/Company not trustworthy
• Stock Market staff not trustworthy
• SL hacks (other than untrustworthy staff misusing what's going on)
• Bad server-side security

and I'm sure there are more. It appears over the last fortnight we've seen, from various places, at least the first three of these going on, and probably the fourth too.

We are also seeing serious doubts cast on the probity of how Ginko conducts its business, which is a separate issue to the stock markets, although a number of the same doubts can be, and have been raised about Ginko, along with on-and-off again accusations that Ginko is all a ponzi-scheme. To be honest, I'm not sure I can keep up with all the twists and turns.

I will try to sum up (although it might be out of date before I do) and refer you to sources that give you a better running record of the twists as well as some very thoughtful insights from both a legal and a regular market player's point of view (continues under the fold).