Sydney Morning Herald: 'The biggest bank in the virtual world of Second Life has closed its doors after a run on its deposits, putting at risk hundred of thousands of real dollars of savings and investments.'
The 'bank' in question, Ginko Financial, yesterday stopped accepting deposits, froze all withdrawals and converted account holders' balances into "tradeable debt securities" called Ginko Perpetual Bonds. These bonds, naturally, are trading at a steep discount
to their actual cash value.
Just another cautionary story of dodgy dealing and voodoo economics from the virtual world of high finance. But, hey, what can you expect when people appear to be making up the rules as they go along.
Meanwhile, back in the well-regulated real-world of solid financial investment, BNP Paribas yesterday took the extraordinary step of freezing three of its investment funds, arguing that the evaporation of liquidity in the US securitisation market made their
assets impossible to value. Investors were promised more information in a month.
Mmmm...Is it my fevered imagination, or is the real-world beginning to look more like its virtual counterpart with every passing day?