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Topic created : 27 January 2012, 21:36

Corp_America
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Some time ago, I have a cash-flow problem. Now, I have a ton of cash, and I would love to lend out some on interest.
 
I think this game is big enough for a bank to appear, or at least some type of bond for companies to issue, then companies who have assets can borrow money. Companies should be able to sell bonds (with duration of maybe 1-4 weeks real time) on the market for 30% (or more) of the value of the assets in the company. To prevent abuse, perhaps only company with assets of 500 mil or above can borrow money. If the company can't pay interest, then the company fails. If repurchasing of a bond can't be done at the due date, then the company fails and the company's asset will be liquidated in the game as if the company never existed. If the value of the company is less than the borrowed amount, investors will take a loss based on the percentage of the bond they hold in the company and vice versa. Of course, companies can't sell division when the bonds are issue, that would be balanced against borrowed money.
 
I think this is a reasonable plan, and I hope some developers are listening on this. This is way simpler than a stock market and should add more than just adding goods to the game.    

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27 January 2012, 23:07

Last time edited : 27 January 2012, 23:09

giekas
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There is very big imbalance of supply and demand:
- established companies usually have hundreds and even thousands of Billions of surplus money
(just take a look at bids in Auctions Well),
- startup companies have needs in range of less than hundred Million - afterwards they start having surpluses themselves.
 
As a result, one half-established company could cover cash needs of all beginner companies and then some.
Your company would not be able to find enough borrowers to lend any significant piece of this 'ton of cash' to make it worthwhile activity. 
 

27 January 2012, 23:33

Corp_America
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I am talking about providing liquidity.
 
If there is excess lenders, then the interest will be low by comparison, just let the market do the pricing, but it does offer a way to park cash and startups can actually borrow money in time of need instead of just going bankrupt due to a lack of cash when they have the assets. Maybe not 500 mil asset, but 100 mil? Even billion companies can failed due to lack of cash.
 
If company can find better ways to use the cash, then they won't lend out the money, especially if it is locked up in another company for a time. This is just a way to help other companies in need. 
 

27 January 2012, 23:34

Corp_America
Winner of the Contest for Managers in the nomination The Standard of Virtonomics
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Corp_America
 
Correction: If there is no borrowers, then the interest will be low. If there is no lenders, then the interest will be high. it is just how the market works. 
 

29 January 2012, 03:22

JustNash
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imo what Giekas is saying is that IF your company is worth 1000 Billion and you're adding 5Bn a day to that, why would you bother looking for loaners that will take 1M each and pay you an interest of say 100k a day? Even if you had a thousand loans of that amount, which I guess would be more than the entire loan market, you'd make just 100M a day. Compare that to the 5Bn you're making already...
 
I actually think this game isn't designed for people playing it much longer than beyond the contest for presidents... Only addicts like Giekas, myself, ... continue after that :-)
 
That being said, I might be inclined to help some new players out with loans. On the other hand: that would just require the game to be harder at the start. Otherwise, I don't see the need to help people as most make it just fine without loans...
 
I do think there should be banking though. As things are right now, there is no penalisation whatsoever for keeping excessive stocks. They don't perish. Their financing doesn't cost a dime. In reality, you should be making the tradeoff between having enough inventory and the cost of having it... If you get an interest on your money, you need to decide whether you just stock up on goods, or deposit it a the bank. Or, if I can dream out loud: full financial markets (bonds + equities). You might purchase interests in other people's companies. Buy low, sell high :-) 
 

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