Linden Lab instituting bank shutdown.

I just got back from a short personal holiday to discover LL is in the process of shutting down interest bearing institutions in SL that are not registered with a real world government, a bold move from being a a game to what I imagine is what LL is trying to achieve: the status of being a secondary reality existing atop our own. More news will be forthcoming with links as I uncover the details of what is hapening, but needless to say, market volatility will likely be at an all time high and as of yet, I'm not even certain the exchanges will survive.

Welcome to 2008.

I sat on my couch with my wife Koudoawaia Menatep (Her SL name of course) throughout the duration of the dropping of the great ball at Time's Square watching it on MSNBC and CNBC, yes.. NBC has me cornered as a viewer. While I sat there, enjoying the warmth and coziness of her snuggled to me, I kept thinking about all the magnificent structures in New York, and how much it must have taken to build them.

Someone had to take great risks, expending monumental amounts of resources, to build the icons of that landmark. They gambled a lot on their location and the features of the land. I'm sure not a few were scammed and cheated along the way before our society matured a little more from its pre-Black Friday dreams in the 1920s. I also think about how today I can't help hearing on the news about how sorely my nation (the United States) is burdened with debt. Consumer debt, National debt, mortgage debt. What happened to the good old Wealthy United States? The ones immigrants dreamed about with streets of gold and lady liberty shining in her brightness in the harbors of New York? Are we seeing the corrosion of the American Dream just as her copper was blighted by oxides?

I can't help feel that all this is tied into the failing moral fabric of our society. Traditions abandoned, rebellion against parents and guidance gone unchecked, a general lack of discipline in all mannerisms of life in the pursuit of ultimate freedom, which is supposedly meant to make one... "feel free." Yet to me, debt is a shackle. A shackle snapped on my wrist by a lack of discipline with my wallet.

Businesses are supposed to encourage you to spend your money. Advertisers are supposed to encourage you to spend your money. Predatory lenders love it when you spend. Tax collecting political stooges are supposed to encourage you to spend money for their special pet projects that you don't care about them appending to every pork barreled bill that passes through congress. Economists encourage you to spend money for the economy's sake so their historical record looks like a boom, not a bust. Your parents are supposed to teach you to survive the baiting of all these hawks by saving enough nuts in the tree for any harsh winter that may upon you beset. What happened? I think it's obvious. Rampant divorce rates, inattentiveness of modern parents to their children due to lifestyle and business changes, the continuing strain of the average American under the slaving collars of our corporate masters who have not put the breaks on spending regardless of the fact their customers may soon well be penniless.. and then where would that leave their profit margins? (I think Goldman Sachs, Citigroup, and a few other corporate giants are finding out the hard way.)

And with National Debt at an all time high, what happens.. when the economy suddenly runs into the wall of creditworthiness? What happens when there becomes a significant risk the U.S. Treasury Bill may actually fall out of the beautiful AAA status it has set upon so long? Okay, perhaps it won't get that bad, but it sure will likely feel that way with the mint printing money to try to keep up with obligations and inflation soaring to such levels that would make pre-world war 2 Germany look like an economy's safe haven... and all this at a time when fuel prices are hitting record levels.

I've made my New Years resolution my friends. Save.. save a lot. The winter upon is dark and I don't think there'll be many of us able to entirely escape the effects of the coming years.

I hate to be gloomy on the New Year, but when I don't think of the Financial world.. I have a lot towards which to look forward. After all, I have her, and she's worth more than all of Fort Knox. (*Hugs Koudoa softly..*) There's also technology and other sectors which are promising, but what is technology if there's a shortage of financing but an exercise in futility?

To you and yours, a safe, happy, spiritually, and financially sound 2008,
Maelstrom

PS. Getting National Debt down so that way pay less interest and then in the long term can have even lower taxes is a good thing, get your local political stooge to look into it or be very concerned about long term national and global security. A nation that saves and builds great works on the savings, not debt, will outlast one which does everything on the back of future cash flows. (Ask China, they're really good at this. Scares me sometimes; to the point in fact it's how I know the Pentagon has absolutely no say in how the civilian sector really runs save for their personal votes because our spending policy is very strategically unsound.)

PSS. Find a way to do this without the unbelievable bureaucracy and partisanship of the U.S. Government getting in the way in this day and age, and I will put you on a Plateau that surpasses FDR,Ike, and Lincoln, but not George Washington, in your abilities to Govern.

Back from the Holidays.

Here we go, back to work. I am seeing a lot of good potential for the SL economy this coming year. User rates are rising. The problem we will continue to face is a lack of sincere honesty and regulation in the markets with a Linden Lab nervous about playing Global Cop after a couple of courtroom fiascoes. I continue to expect that land will stay a relatively flat market with land providers continuing to up supply with the rising user rate. The great concern is will it out-pace the rate of user acquisition where the users can be valid participants in the land market. What does this mean? Well, basically we need more users with money wanting to buy land and merchandise. I look at SL as virtual tourism, if you don't have the flow, you don't have the dough.

Merry Christmas.

I will be notably absent until approximately the 28th, at which point I'll probably begin a review of VSTEX ipos.

Here's wishing you and yours a very Merry Christmas. Peace on Earth, good will to all. Make sure you remember the true reason for the season does not come with a bow. Hold your family close, keep them warm, and count your gifts from God which will vastly outnumber any quantity of packages any person could purchase. (Especially if you include each star or grain of sand in that count.)

IPO Review for the Ancapistan Exchange.

A prior commenter brought to my attention an observation about ACE, that many of the IPOs appeared to them to be fairly untested and the standards of the exchange to be at risk. That said, the asked me to comment on my thoughts of the companies, their prospects, and their business propositions. That said, I am now going to begin an alphabetical review of the IPOs currently listed on that exchange at this time.

Disclosure: As policy, DGD buys a small amount of all ipos, larger amounts of promising IPOs, and day trades the one that it buys small amounts of. Therefore, DGD already has at least a minimal interest in all these companies. However, I have never let that skew my presentation of judgment to the public.

In alphabetical order they are:

ACE:Prospectus. Value Proposition: Exchange operations.

Shares to issue publicly	7,700,000
IPO shares sold to date	816,565
IPO shares remaining	6,883,435
Total shares in company	16,000,000

ACE is an offering of ownership in the exchange operations themselves. It is not uncommon for stock exchanges to raise funds initially, the purpose of the funds is to establish a bank on which trading can take place and to allow for ease of deposits and withdraws of new clients as well as to cover some moderate expenses the exchange may witness during the initial stages of operation. The IPO is well written and recognizes the weakness in the exchange market with 4 pre-established existing competitor exchanges. Typically, a well managed exchange is a stable investment. The risk is that poor management will allow anyone access to the market's capitol, subjecting it and shareholders to fraud that could potentially break the value of hte exchange itself and drive its clients away. Though ACE is a strong offer being the operations of the exchange itself whose revenues would be obvious to the public in the form of the commisions on trading, it could be undermined by the operations and management of its landlord BNT whose CEO, Intlibber Brautigan, co-owns both ACE and BNT. Proper management, however, could bring both companies to extraordinary prosperity since BNT has a large asset base. Time will tell where these futures will go but BNT has greater freedom of action trading on its own exchange. However, with greater power and ability comes greater responsibility. Abuse and mismanagement or over-reaching.. can be lethal. Slow and steady is the course to progress.

BAM:Prospectus: Value Proposition: Acquisitions And Mergers, rebuilding broken companies after buying them out.

Shares to issue publicly	1,000,000
IPO shares sold to date	25,981
IPO shares remaining	974,019
Total shares in company	2,200,000

Travis Ristow is the CEO of this company and in my eyes the CEO is and makes the company in Second Life. He's been a friend of mine and pretty reliable when it comes to the operations of his existing company on ISE, BCX Bank. DGD also owns property on one of his estates and it turns a steady profit running a vendor booth next to his banking operations. Travis seems pretty business savvy, but a business in Acquisitions and Mergers within Second Life exposes itself to a lot of risk. At the same time, there is also a significant amount of room for reward. Time will tell if this venture is profitable, but there is potential here. It all depends on how the risk is managed and that is true about any investment firm. I can't help feel slightly skeptical though for business operators who have more than one operation listed and their ability to keep financing separate. You would imagine they could use the strategy for the new business for their existing operations. That said, I still think this corporation may have a future if it is executed on correctly.

FWD:Prospectus: Value Proposition: Content and Marketing Information provider.

Shares to issue publicly	800,000
IPO shares sold to date	12,597
IPO shares remaining	787,403
Total shares in company	2,000,000

I do not know much about the insiders of this particular company, Never met the CEO or any of their staff in second life. This worries me. I see a lot of folks around the SL Finance communities and I invest with only who I trust or who I've seen running existing business operations and am aware of their ability to manage their operations. That said, I can't make a judgment on this company much based on its leadership. However, I can say that the value proposition is potentially viable. The idea of providing a "Newbie Haven" in order to exploit marketing contacts and collect data as well as to attract vendors is far from uncommon in Second Life. The real question about this company is how will it distinguish itself from its many other competitors? What will make it succeed? How motivated are the executives? I've only seen a few operations like this last any amount of time and I'm very skeptical about its prospects, but at the same time I feel compelled to give people I do not know an opportunity to prove themselves. This investment has a significant risk, versus reward factor and may not be for the faint of heart.

OIG: Prospectus: Value Proposition: Various investments including those in real life.

Shares to issue publicly	7,000,000
IPO shares sold to date	61,619
IPO shares remaining	6,938,381
Total shares in company	12,000,000

Basing a company on RL investments has repeatedly proven catastrophic in Second Life. DGD has a policy of avoiding them because of this, and because of the potential for basing your security's performance on RL securities risks breaching REAL UNITED STATES SECURITIES LAWS which clearly state that any asset that is "fungible" is no longer just a game, but a real.. trading security. I cannot trade my DGD stock for cash at the cashier's counter or barter it for food. I could however, take my ford stock and theoretically sign it into my grocer's name for food if I have the certificate and they're willing to accept that trade. That said, I would not be surprised if this company is not shut down.. or does not even get off the ground. If it does, I'll day trade it, but won't likely own much of it for fear of the U.S. Attorney General's office shutting it down and I losing all linden value. Also, the biggest bank collapse in SL history (Ginko Bank) resulted from a Brazilian that was trying to make revenues from his deposits in RL securities. It amazes me that this CEO account is listed as being registered from Brazil. Same person? In SL, how do you know? I'd advise most investors to avoid this issue like the plague unless you're just day trading. Long term positions are at significant risk of catastrophic loss.

OMG: Prospectus:

Shares to issue publicly	1,200,000
IPO shares sold to date	154,887
IPO shares remaining	1,045,113
Total shares in company	3,000,000

This prospectus was generally okay with me as there are many successful clothing entities in SL, just depends on the talent of the artist. This is what changed everything:

Use of Capital

Use of Start-up Capital
L$700,000 - Labor for designing clothes *$2,777 usd*
L$350,000 - Strong Marketing Campaign for months 1-6
L$150,000 - Misc. costs (land tier, events, prizes/camping, etc)

If anyone tell me why in Second Life anyone should be paid up front $2,777 us dollars for the design of clothing when I can make a sweatshirt for free, I'll reverse my decision that this is a scam.

Shortened Product line description:
Lines of clothing equalling around 140-150 different outfits.

So they're charging shareholders 20 USD per outfit that may, or may not sell. I'll let the investors make the decision on this one, it could pay out, but I don't anticipating that recapping its initial investment value any time soon especially with the added costs listed that are not one time, but sustained long term costs.

"Someone pay me 2777, I'll make 140-150 lines of clothes for 2777!!! And then put them in shops for you.. and they'll sit there.. and they'll stare at you.. and they'll stare at you.. and you'll own it all! And you'll have to pay for its rental spaces each month so you won't really make that much money on it. Oh, and thanks for the 2777 USD!"

Sorry. Have to mock it just a little.

The use of capital needs greatly expanded upon and I think investors deserve more.

Summary in response to the comment here by an anonymous user:

Is ACE rushing IPOs out the door for growth? Out of these 5, I'd strongly question 2, and have some clarifications to ask of a third. I'd say, yes they are pushing things a bit and allowing their standards to slip? Yes. I believe they are. If they want to be anything as successful as their predecessor exchanges they must be more selective. In my time allowing IPOs at AVIX (what CAPEX was before it was purchased). I eliminated at minimum 90% of all IPO proposals. Of the few listed on CAPEX now, several were not even approved on my watch and only one company has ever failed that I allowed to list, (CYB). Skepticism is healthy, an exchange showing a lack of it, is putting themselves and their clients at significant risk of permanent, bad will and loss.

Thank you for your inquiry Anonymous. Anyone whose corporation is listed in this blog who would like to clarify their position of their company in the comments, please feel free to do so. We all know I am not a Nazi, I encourage free speech 100% so long as it is constructive and non-derogatory dialogs.

RLX of the WSE is dead.

Another company on WSE, which continues to trade, has collapsed within 4 months of opening. RLX no longer holds any land, It's CEO has been absent for a long period with the last posting date before the most recent December announcement being the only since October. It has no means of income. Company communications are practically non-existent. Most employees have moved on. If you have investments in this stock; selling now will save your shares from being WTF'd to 1/4 value possibly even less.

I come to this conclusion after talking to former employees, researching the CEO's landmarks to the land holdings for RLX in world and researching the financial details of the company which have not been updated since October. It is possible the company may be reorganized, but I've not seen this occur often on the WSE.

Additionally, another symptom of decay is the state of the maintenance of the company's main web page. It does not appear to have been updated or posted upon since August, which is the very month the company listed.

Interestingly enough, the WTF fund of the WSE actually owns 20% of this corporation. I am relaying this information to WSE administrators and requesting an investigation.

DGD expands operations

It's been a while since I've tried a land venture in the SL markets because land has been rough, but I found a pretty hopping club next to some cheap land today, called Club Wolf.

The experiment is inexpensive, 1366 to buy the land to get started, 2611/month to maintain if all goes well.

If you're interested in seeing DGD's new startup location, just drop by Mark Edge.

The shop's already set up and ready to rent!