The auction house in World of Warcraft is kind of weird, but I find it interesting. Basically I've been trying to figure out an arbitrage scheme that works consistently, and I think I've found one.
Basically what I do is buy raw cloth materials, work them into bolts of fabric, and sell those. For example, it takes four pieces of Silk Cloth to make a single Bolt of Silk Cloth. So what I do is buy up all the Silk Cloth with a unit price of 5 silver or less. Then I convert it into bolts of fabric. Then I sell the Bolts of Silk Cloth at a unit price of around 35 silver--netting a me a 15 silver (40%) profit on each Bolt of Silk Cloth sold. The turnaround on this is a day or two.
Sometimes I get outbid on the buying end, but so far I haven't had any problems on the selling end. I kind of don't understand it, since the only people who can use bolts of fabric also, like me, have the ability to convert Silk Cloth to Bolts of Silk Cloth. So really all I'm doing is marking up the price on something for doing labor on it that the buyers can already do themselves for free. Go figure.
Showing posts with label gold. Show all posts
Showing posts with label gold. Show all posts
Friday, November 21, 2008
Monday, March 17, 2008
Uh-oh
In an effort to keep financial firm Bear Stearns from going bankrupt, it was agreed that JP Morgan would buy it out (at a bargain price of $2/share) and that the Federal Reserve would help JP Morgan guarantee Bear's financial obligations.
The hope is that bailing out Bear Stearns will buoy investor confidence enough to prevent the US financial industry from sliding into complete ruin. I suppose this is an effective strategy: if you're an investor, what could give you more confidence in an institution than backing from the guys who print the money?
But it's kind of disconcerting. As this WaPo op-ed points out, there is "abundant evidence from the currency and gold markets that the world has just about all the dollar bills it cares to hold". This suggests that maybe the Federal Reserve's trick of pulling new US dollars out of its hat every time a teetering financial giant needs righting might not be viable if things continue to worsen. And this very fact, of course, will cause things to continue to worsen.
So it looks bad. Though overall prices held steady last month, inflation is up for the year. Stocks are tumbling. Gold is soaring. And Intrade.com has 70% odds that we're heading into a recession this year.
:(
The hope is that bailing out Bear Stearns will buoy investor confidence enough to prevent the US financial industry from sliding into complete ruin. I suppose this is an effective strategy: if you're an investor, what could give you more confidence in an institution than backing from the guys who print the money?
But it's kind of disconcerting. As this WaPo op-ed points out, there is "abundant evidence from the currency and gold markets that the world has just about all the dollar bills it cares to hold". This suggests that maybe the Federal Reserve's trick of pulling new US dollars out of its hat every time a teetering financial giant needs righting might not be viable if things continue to worsen. And this very fact, of course, will cause things to continue to worsen.
So it looks bad. Though overall prices held steady last month, inflation is up for the year. Stocks are tumbling. Gold is soaring. And Intrade.com has 70% odds that we're heading into a recession this year.
:(
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