From a post at the International Stock Exchange:  

Well - dont we all just love to be blindsided.

I want to reassure everyone that we will do everything in our power to continue operations as a lender & Not a Bank.  We truly could have used 5 minutes notice from LL regarding this one so we could have put some hard Limits down & facilitated a more graceful run on the bank.  We were able to close down the server at around the 10% point - meaning that we have effectively run through well over 5 Million L$ in under 1 hour.  I will continue to keep ATM's offline as we try to liquidate some more funds & at that time will reopen ATMs with a Relatively low limit - I will monitor the flow and adjust it accordingly.

Effective immediately we will discontinue interest payments.  We are looking at other options that would allow some type of fee to be paid on money that has been deposited.  However I will not know anything until our Lawyer gets back with us & we get a FIRM WRITTEN response from LL regarding Bond or Dividend payments.

by Guardian Market, Columnist

With the recent controversy generated by Gene Yoon (Ginsu Linden) and his comments about the Linden Dollar being a product, I thought it might be useful to examine an economic definition of money and see how the Linden Dollar compares to it.

Money has three main characteristics, according to my first macroeconomics class: a unit of account, a store of value, and a medium of exchange.  Each of these is positively critical to a currency’s success, no matter how oddball that currency may seem at first.  To illustrate the differences between a real currency and something which does not serve as a currency, I will compare the Linden Dollar to an absurd example: cows.

A unit of account means that you can easily measure how valuable something is in terms of the stated currency.  Residents may at first convert the currency to their own First Life currency to see how it compares, but after some practice it is pretty easy to judge how much something costs in Linden Dollars.  Not only that, but it is also pretty well understood that something costing L$200 is worth twice as much as something costing L$100.  This linear scalability is also necessary for a unit of account.

Second Life's Ginko Financial Bank is unable repay $L200,000,000 ($750,000 U.S.) in account holder money. The big question in Second Life lately is where did $750,000 U.S. dollars of real value in Second Life investments go? It seems the deal was too good to be true, up to 60% interest on account deposits made with Second Lifes virtual bank "Ginko Financial". Ginko is a virtual investment firm that operates like a bank, you deposit Second Life currency, the Linden dollar, and Ginko was to pay interest on that account balance.

According to Ginko Financials President, Nicholas Portocarrero, there's upwards of two hundred million Lindens on deposit with the floundering virtual bank. That's constitutes a value of $750,000 in United States currency. But where did all the money go? When Mr. Portocarrero was asked if he would publish an accounting of his investments, by Second Life Herald reporter Pixeleen Mistral, his simple statement was "Never". But he also stated that he had no intention of running away from the situation either.

READ IT ALL AT:
http://www.associatedcontent.com/article/3416...