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blankseplocked Lets talk brass tax, a discussion in numbers of the reactions market
 
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Kazzac Elentria
Posted - 2008.12.13 16:44:00 - [1]
 

After doing some internet investigating and detective work I've tracked down a number of leads that have pretty solid estimates on the number of towers spawning material into thin air.

After talking to a few large POS chain directors, based on Jita volumes from last year I would say we can easily expect that the current dyspro/prom supply will drop anywhere from 30-50%. The plat and to a lesser degree chromium will drop as well. This is at least until .1-.3 towers get thrown up on plat and chrom moons since there are still a number of them without a POS on them. (fly around backwoods Amarr space, pretty vacant lately)

Read into this what you will, what I'd like to discuss is the final numbers we can expect.

Akita point out his guess in a different thread that we can likely expect the stable price of the ferro chain to hover in and around the summer spike we saw this year. I tend to agree with his assumption, only I would add that in addition to this we're also going to see a marked increase in Cadmium, Vandium and Caesium as well.

What this mean in terms of final T2 pricing. Easily a 10-20% jump in anything thats heavy in carbides and capacitors. A good number of mods won't see but a 5% jump, if that. And some depending on how the remaining reactions react to the new pricing structure may actually fall.

I also don't see CCP doing anything to alchemy or the market until spring patch. Time must be giving to see just how much of this fake material is out there still sitting in stock piles and hemmed up in industrialists build queues. It also gives time for POS directors to spin up new reactors for the R16s and R32s that were being spawned as well.

Feelings, additions, burns?

Einstein's Ghost
Posted - 2008.12.13 17:27:00 - [2]
 

Which means the margins for middle price range reactions will shrink even more.

Enihcam Xes
Posted - 2008.12.13 21:44:00 - [3]
 

What remains to be seen is the elasticity of demand for t2 goods in the face of long term adjustment.

Brock Nelson
Posted - 2008.12.13 21:52:00 - [4]
 

Edited by: Brock Nelson on 13/12/2008 21:54:21
I'll give it 1.5-3 months before prices settles once again.

Mining moon material - 2 weeks
Reaction to produce simple material - 2 weeks
Reaction to produce complex material - 2 weeks
Market and hauling - 1 week

Of course, I know that you don't need a month to do any of the above but that's usually how long my cycle is.

I'm curious as to why the price would stabilize in 6 months when summer comes around...

Mari Katarin
Posted - 2008.12.13 23:24:00 - [5]
 

As always, great analysis. I disagree with the conclusions, however.

CCP should have already wiped out stockpiles of spawned moon minerals and products from the market. The supply crunch should happen sooner than you expect - the speculative buying of all things t2 will create a cycle where t2 items will be alternately highly profitable and unprofitable. I agree with the magnitude of the swing you predict, and pricing impact. Biggest hits will be seen in jump freighters, marauders and blackops. Unfortunately just about everyone qualified to own one already does, and that market is not likely to grow very much. The biggest impact will be a drop in BPC prices for those products and possibly datacores used to invent them with.

We've only got about 2 months until the March expansion hits Sisi. That's enough time for people to scramble and install alchemy equipment, but not enough time to have a big impact on anything. Which means an earlier than usual upswing in empire ice prices. That's about it. I don't think we have enough time for the demand to impact low end moon mineral pricing as much as prom/dysp.


Einstein's Ghost
Posted - 2008.12.13 23:56:00 - [6]
 

Unless alchemy reaction ratios are significantly changed, I doubt anyone would be doing them. There is no profit there at this point.

Kiki Arnolds
Caldari
Allied Caprican Heavy Industries
Posted - 2008.12.14 00:31:00 - [7]
 

Originally by: Einstein's Ghost
Unless alchemy reaction ratios are significantly changed, I doubt anyone would be doing them. There is no profit there at this point.


unrefined dys will become attractive if prices shift a bit more... assuming they are the right prices...

Kazzac Elentria
Posted - 2008.12.14 00:59:00 - [8]
 

Originally by: Kiki Arnolds
Originally by: Einstein's Ghost
Unless alchemy reaction ratios are significantly changed, I doubt anyone would be doing them. There is no profit there at this point.


unrefined dys will become attractive if prices shift a bit more... assuming they are the right prices...


Interesting to note that because the alchemy dyspro is tied to cadmium and part of the chain reactions involve cadmium it would have to take dyspro at a price 8x the price of cadmium for it to even be worth the effort in time. Of course you make a profit earlier than that, but the time effort involved increased usage of other mats sorta make it a null effort.

I don't think alchemy was introduced as a pre effort to this patching as some tin foil players would like to assume. Rather I think it was introduced on the assumption of a false market. I really think CCP is going to take a very long term effort and wait until some price stability is in effect before they go tinkering with any other part of the market.

I think Brock's timeline is pretty close to what we'll see. Barring any outside influences of alliances, wars, demand, etc..

Tiirae
The 5th Freedom
Wildly Inappropriate.
Posted - 2008.12.14 03:35:00 - [9]
 

Originally by: Kazzac Elentria
After talking to a few large POS chain directors, based on Jita volumes from last year I would say we can easily expect that the current dyspro/prom supply will drop anywhere from 30-50%.


I cannot see any way you could have faith in these numbers. Nobody but CCP has access to the actual data and I bet it's taken them a few attempts to feel confident about their conclusions. And even then they are probably wrong.

If you can give some lengthier explanation of how you arrive at such large percentages then I might be persuaded. Even if the exploiters were producing 50% as much as the real moons (that's your lowball 30% number), I'm more inclined to believe that there are still gigantic amounts stockpiled and the amount of ferro on the market might not reflect actual moon production for a year or two. It depends on how much of the stockpiles were deleted with the banned accounts.

Anyway, more info on base assumptions please.

Treelox
Posted - 2008.12.14 03:40:00 - [10]
 

Originally by: Einstein's Ghost
Unless alchemy reaction ratios are significantly changed, I doubt anyone would be doing them. There is no profit there at this point.



there is always someone who will, same sort who think the minerals they mine are free

J Tang
Gallente
Major Engagement
Posted - 2008.12.14 04:07:00 - [11]
 

Originally by: Brock Nelson
Of course, I know that you don't need a month to do any of the above but that's usually how long my cycle is.

I'm sorry, I just can't let this one go...

Kazzac Elentria
Posted - 2008.12.14 04:26:00 - [12]
 

Originally by: Tiirae


Anyway, more info on base assumptions please.


There is enough info residing in individual forums other than these to get an assumption of how large the exploit was, how long it was going on for.

You take this, compare it against previous market data for the last 3 years (yes, some of us are that anal about our records). Comparing the swings in price, along with the alliance information, loss of systems, the move in sov, employment history for those involved and not directly involved, etc..

And then take some internet detective time, talk to contacts you know, and go from there.

A large part of it is guesses and extrapolation obviously, I figured I made that clear enough, but given the information before me it just fits.

R64s were not that only thing being spawned into thin air, entire chains of reactions were used to literally spawn the final products into existence.

It won't take that long, IMHO, for the stockpiles to dwindle and any downward movement we see in related products are only traders trading in between themselves in what we like to call hot potato.

Hold and hold long... just saying

Mari Katarin
Posted - 2008.12.14 04:52:00 - [13]
 

Even CCP used the words "significant impact." Remember that even a 10% reduction in supply of a bottleneck element does not mean that item goes up 10%. Every other component has room to fall to zero as people fail to shift their ever-growing stockpiles. Stockpiles which can't be used up without the bottleneck. The bottleneck element has the potential to go sky high.

I agree with Kazzac on the long-and-strong part. Shake the weak hands out of the positions they accumulated during the last panic. Buy on weakness and sit tight. You've got at least 2 months to turn a huge profit in large volume from current price levels.

Tiirae
The 5th Freedom
Wildly Inappropriate.
Posted - 2008.12.14 15:06:00 - [14]
 

Edited by: Tiirae on 14/12/2008 15:15:29
Edited by: Tiirae on 14/12/2008 15:09:26
Originally by: Kazzac Elentria
Originally by: Tiirae


Anyway, more info on base assumptions please.


There is enough info residing in individual forums other than these to get an assumption of how large the exploit was, how long it was going on for.

You take this, compare it against previous market data for the last 3 years (yes, some of us are that anal about our records). Comparing the swings in price, along with the alliance information, loss of systems, the move in sov, employment history for those involved and not directly involved, etc..

And then take some internet detective time, talk to contacts you know, and go from there.

A large part of it is guesses and extrapolation obviously, I figured I made that clear enough, but given the information before me it just fits.

R64s were not that only thing being spawned into thin air, entire chains of reactions were used to literally spawn the final products into existence.

It won't take that long, IMHO, for the stockpiles to dwindle and any downward movement we see in related products are only traders trading in between themselves in what we like to call hot potato.

Hold and hold long... just saying


Well again I don't think there's anything there except very crude guesses. The best I can do is say the amount of fake reactions were 0% to 100% of the market. LoL.

I too have trawled various forums and gotten some friends of mine ingame to translate others.

I do know people who knew the parties that have been identified so far and they have some rough idea of how many poses those guys were running. But this exploit was well known by people in G 3 or so years ago and so has possibly spread to every corp and alliance any of those people have passed through in the time since then.

Once all the stockpiled reactions are used up (and it's not just ferro, this exploit was used to produce every reaction in various quantities) and the market has settled, it will be possible to work backwards and determine with a high degree of confidence how much of the reactions being used for ships & modules was actually fake. But until then there's just not enough info to make even ballpark guesses.

I think really the only thing we have to go on is CCP's use of words in their only statement so far. And yes it does sound like 50% is more likely than 10%. But we just don't know and it could easily have been on over-reaction on their part.

As for what to do if you've got a lot of this stuff stockpiled yourself? I think the current round of speculation is finished, until more info is released that sparks another panic, yeah... hold hold hold.

Originally by: Kazzac Elentria

R64s were not that only thing being spawned into thin air, entire chains of reactions were used to literally spawn the final products into existence.


I'm not sure what this means. As far as I know the bug was able to create any simple or advanced reaction without needing inputs. But no R64s were being created out of nothing. And they didn't need to create simple reactions to then feed into advanced reactions. They could just create the advanced stuff from nothing.

And one last, nitpicking point... it's 'brass tacks' not 'brass tax'.

Kazzac Elentria
Posted - 2008.12.14 16:11:00 - [15]
 

Originally by: Tiirae

I'm not sure what this means. As far as I know the bug was able to create any simple or advanced reaction without needing inputs. But no R64s were being created out of nothing. And they didn't need to create simple reactions to then feed into advanced reactions. They could just create the advanced stuff from nothing.

And one last, nitpicking point... it's 'brass tacks' not 'brass tax'.



Well the ability to create any reaction without inputs pretty much means that any supply line of moon goo could have come from fake sources. That denotes any rarity level was subject to the exploit.

...for all we know the entire excess of R32s on the market could have come from these chains.

Yeah I see that now on the phrase, gimme a break I was drunk when I wrote the OP Wink

Einstein's Ghost
Posted - 2008.12.14 22:34:00 - [16]
 

MD regulars drunk-posting? Now, this explains alot Twisted Evil

Akita T
Caldari Navy Volunteer Task Force
Posted - 2008.12.15 11:57:00 - [17]
 

Edited by: Akita T on 15/12/2008 12:01:42

Originally by: Kazzac Elentria
it would have to take dyspro at a price 8x the price of cadmium for it to even be worth the effort in time

The replacement ratio in the reactions still is 20:1 (Cadmium:Dysprosium) and it also takes a lot more fuel (which is getting more expensive lately)... on top of it all, there would be no point doing alchemy if regular reacting can get you more ISK per tower.
So... not 8x price, but more like 30x price to be worth doing in case of serious shortage for no profit (self-usage "stuff I do myself is pretty worthless" thinking school), and closer to 40x price for it to begin being more profitable than simply running some other reaction (level where some people with brains would consider doing alchemy), you'll actually need 50x price for any SERIOUS supply-level-driven alchemy chains to come into existance (after considering the likely effect of fuel price trends too).

P.S. Personally, I'd wager something like 110k-150k per unit of Dysprosium, 2800-3500 per unit of Cadmium in the long run (think 2-3 months from now or so).

P.P.S. Assuming the alchemy reactions remain unchanged (no boosted time effectiveness, same replacement ratios, etc).

Tiirae
The 5th Freedom
Wildly Inappropriate.
Posted - 2008.12.15 12:04:00 - [18]
 

Originally by: Akita T
Originally by: Kazzac Elentria
it would have to take dyspro at a price 8x the price of cadmium for it to even be worth the effort in time

The replacement ratio in the reactions still is 20:1 (Cadmium:Dysprosium) and it also takes a lot more fuel (which is getting more expensive lately)... on top of it all, there would be no point doing alchemy if regular reacting can get you more ISK per tower.
So... not 8x price, but more like 30x price to be worth doing in case of serious shortage for no profit (self-usage "stuff I do myself is pretty worthless" thinking school), and closer to 40x price for it to begin being more profitable than simply running some other reaction (level where some people with brains would consider doing alchemy), you'll actually need 50x price for any SERIOUS supply-level-driven alchemy chains to come into existance (after considering the likely effect of fuel price trends too).



And on top of all that, you have to have this running 20 weeks before it's actually needed? I cannot believe that people would look around at everything you can do with your ISK and decide that this is the best use of it.

On topic: SHC had a summary from the CSM meeting today, pasted by MD regular kwint sommer. CCP is now saying that the total amount of fake reactions produced over the years has been 3 trillion isk worth. So not 50%, not 30%, not even the paltry 5% to 10% that I was thinking. More like 2%. That's what they are going to tell us.

Which I don't believe for a second. But it doesn't really matter, it's obvious the truth is not going to be told anyway. I guess the good news is that the price of T2 goods isn't going to change AT ALL.

I'm glad I got my speculation over and done with in the first few hours of panic.



Akita T
Caldari Navy Volunteer Task Force
Posted - 2008.12.15 12:55:00 - [19]
 

Originally by: Tiirae
CCP is now saying that the total amount of fake reactions produced over the years has been 3 trillion isk worth.

They probably neglected mentioning what KIND of 3 trillion (i.e. that time period's market price or base price, which is, well, orders of magnitude lower) and how exactly was it spaced time-wise (evenly during the entire period the bug existed, or heavily spiked in the last 4-6 months only)...

Kazzac Elentria
Posted - 2008.12.15 14:44:00 - [20]
 

Originally by: Akita T
Originally by: Tiirae
CCP is now saying that the total amount of fake reactions produced over the years has been 3 trillion isk worth.

They probably neglected mentioning what KIND of 3 trillion (i.e. that time period's market price or base price, which is, well, orders of magnitude lower) and how exactly was it spaced time-wise (evenly during the entire period the bug existed, or heavily spiked in the last 4-6 months only)...



3 trillion?

......somehow I doubt that. There is untolds of reactors that could have been running in the last 3-4 years this has been an issue. Reactors that went up, and were taken down, isk that has changed hands, etc...

Speaking as someone who works in computer security, there is no way on this green earth someone is going to be looking through 3 years of logs attempting to back trace to try and find the exact number.

Tiirae
The 5th Freedom
Wildly Inappropriate.
Posted - 2008.12.16 01:25:00 - [21]
 

Originally by: Kazzac Elentria
Originally by: Akita T
Originally by: Tiirae
CCP is now saying that the total amount of fake reactions produced over the years has been 3 trillion isk worth.

They probably neglected mentioning what KIND of 3 trillion (i.e. that time period's market price or base price, which is, well, orders of magnitude lower) and how exactly was it spaced time-wise (evenly during the entire period the bug existed, or heavily spiked in the last 4-6 months only)...



3 trillion?

......somehow I doubt that. There is untolds of reactors that could have been running in the last 3-4 years this has been an issue. Reactors that went up, and were taken down, isk that has changed hands, etc...

Speaking as someone who works in computer security, there is no way on this green earth someone is going to be looking through 3 years of logs attempting to back trace to try and find the exact number.


Well that's what CCP told the CSM yesterday. Apparently. Kwint was the one relaying the info so I assume it's accurate.

I am sure they would be calculating that with database queries and not manually looking through logs, that would be insane. But we have no information about what they log, how often it's archived or deleted, and how often they take whole database shapshots.

When you start a reaction, there will be a signature of database transactions that take place, some of which would involve deleting the inputs and later on creating the outputs. So I would assume that in a perfect world with all data available, it would be quite simple to look for reactions started where the outputs were created but no corresponding inputs were deleted. But in the real world it's highly unlikely this data is kept for very long.

either way, it should be simple to see in a few months. assuming no other factors change, then you can see how much ferrogel must have been fake by working backwards from the price of t2 ships.

If the price changes by less than 2%, then it was a tiny number. If the price goes up 15%, then it was a LOT more than 3 trillion.

If other factors do change, you should be able to account for them as well.

The only way CCP might fudge things is to introduce extra materials through some hidden process that they don't announce. I can't really imagine what that would be, though. I'm pretty sure players would notice.


Andres Talas
Posted - 2008.12.16 01:35:00 - [22]
 

Originally by: Tiirae


The only way CCP might fudge things is to introduce extra materials through some hidden process that they don't announce. I can't really imagine what that would be, though. I'm pretty sure players would notice.




Nahhh. Just spawn a character with X Dyspro in Jita. Bleed it on the market each day in a series of orders at or about the market price. Occasionally, ideally just after some big 0.0 engagement that would leave some big entity with moons in need for a Bag O Cash, drop the occasional lump of 50-100 000.

On behalf of the 'hoocouldanode' faction (*), we certainly didnt notice the stuff being spawned and sold last time.



(*) Tanta is dead. RIP.

Lieutenant Obvious
Lobster Sticks To Magnet
Posted - 2008.12.16 03:12:00 - [23]
 

I either read incorrectly, or the minutes (CCP) actually stated that 35% of the Ferrogel traded recently was spawned.

That's significant.

Xabier
Amarr
Posted - 2008.12.16 03:17:00 - [24]
 

Originally by: Lieutenant Obvious
I either read incorrectly, or the minutes (CCP) actually stated that 35% of the Ferrogel traded recently was spawned.

That's significant.


In which case I'm expecting the market to settle somewhere around 25-27k.


Fly Girl
Posted - 2008.12.16 03:22:00 - [25]
 

Originally by: Andres Talas

On behalf of the 'hoocouldanode' faction (*)



CR has been spelling it hoocoodanode. RIP Tanta.

I guess this reaction bug was CCP's way of doing quantitative easing.

Akita T
Caldari Navy Volunteer Task Force
Posted - 2008.12.16 05:24:00 - [26]
 

Edited by: Akita T on 16/12/2008 05:26:54
"able to confirm exploits starting in March 2008, with the bulk of it becoming operational in May/June 2008"

Told you the prices started moving in a verry funny way 5-ish months ago Twisted Evil

Kazzac Elentria
Posted - 2008.12.16 18:13:00 - [27]
 

Originally by: Kazzac Elentria
I would say we can easily expect that the current dyspro/prom supply will drop anywhere from 30-50%.



Just finished reading the CSM minutes.

... I feel vindicated Laughing

Andres Talas
Posted - 2008.12.16 22:49:00 - [28]
 

BTW, I used to do data mining in support of fraud investigations in my old real life (I now have a new real life).

OK, thinking about how we could track this in something close to real time.

Tracking market transactions wont do it, unless you netted them all out, which might be possible but problematic due to stockpiles, war reserves and so on.

Therefore, we could do it thru counting the number of in-production moon mines and then track the number of destroyed ships via the Insurance database (or killboard samples - talk to Griefwatch) and thus calculate the amount of Dyspro and Prom that entered and left the system.

OK, lets take a Moros, a popular dread, and calculate the amount of Prom and Dyspro embodied in it.

No, I could calculate these figures by hand, but this is MD - some nice capship constructor must have one *hint*

At intervals, we'd therefore get a guesstimate of Dyspro and Prom that would give us something to work on (note that "minor" T2 ships add up - a Helios needs 20 ferrogel for the fusion plant and another 35 in the ion thrusters, for example).

My gut feeling is that CCP screwed the pooch with making T2 so reliant on the two top-end moons, and that Alchemy wont come close to fixing it (ie the lowly Helios needs Crystalline Carbonide Armour plates, and they need Sylramic Fibers, which needs Hexite, and the Chromium thats being needed for the Hexite can't be Alchemised into Prom for the Ferrofluid for the Ferrogel to make the fusion plant).

****, those recently-buffed Assault Frigates ... they seem to be being treated as attrition units by many of the richer players, and if this habit continues they need significant amounts of Prom and Dyspro as well.

Now, there is a major factor to un-screw this, which is T3. We dont know how T3 will work, but my gut says that invention worked pretty well and that CCP will be real nervous about making any of it reliant on Dyspro and Prom.


Tasko Pal
Aliastra
Posted - 2008.12.17 01:13:00 - [29]
 

Originally by: Andres Talas


OK, lets take a Moros, a popular dread, and calculate the amount of Prom and Dyspro embodied in it.


It has zero prom and dyspro. Being t1, it's just a huge pile of roid minerals. But there you go.

Moving on, the problem from our point of view as players is lack of access to the necessary information. We don't have access to prom and dyspro mining rates, to ship losses, etc. CCP does. And since they do, they can go a lot more hardcore than this. They can keep track of everything. Ferrogel magically appearing after a downtime should show up on the radar.

Andres Talas
Posted - 2008.12.17 01:37:00 - [30]
 

*swears* you're right.

Got my windows mixed up ... sorry for that attack of incompetance :)


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