If you’ve been away from SL for much of the day or don’t follow the value of the L$ against USD, chances are you haven’t heard of the insane movement on the LindeX that’s gone on for the better part of this afternoon.
Sell orders over the past few weeks have been elevated to begin with, and were made worse with the lay-off announcements from Linden Lab earlier last week. While best sell orders averaged between $259-260 for the better part of a year and a half, orders at 261-262 became common place over the past week. Today, L$/USD crept up from 264 to 270, to 280, as high as L$303/USD until orders were quietly cancelled, going from $303/USD back up to around $280-281/USD.
Things are still stabilizing and it remains unclear whether the remaining small orders will be resolved by the end of the day – Orders span from 280/USD up to 262/USD rather thinly, but there still seems to be a lot of movement, albeit in small steps.
Was this fueled by panic though? Or was there more to it?
Having watched the numbers climb over the afternoon, one or two noticable orders frequently appeared and disappeared from the market. They would always reappear at a significantly higher rate – far beyond the existing best sell rate – always in quantities that were sure *not* to be filled very quickly, especially since buy orders have been relatively low. Seeing these higher numbers caused others to put their sell orders in at relatively poor rates of exchange as well, driving panic in the marketplace. My own speculation on the matter is that it was very deliberate and intended to ramp up the buy order numbers so as to get an abnormally cheap buy rate to purchase L$.
So what does this really mean for consumers and business owners?
I think the knee-jerk reaction is for folks to try and cash out as soon as possible – I see a lot of people putting in small sell orders – $50-200K orders at a time, when the existing best sell rate doesn’t even have a high volume ($3-4M-ish). Consider this – a volume of $80-90 million L usually takes about a day and a half – sometimes less than a day depending on the time of the month – to run through. To see many small orders – at amounts not all that much different at a slightly worse rate than the existing best rate – shows that a lot of people are panicking because they quite possibly think the sky is falling and don’t know what else to do but get their money out as soon as possible. Realistically, however, if those same people just chose to allow L$ to sell off naturally, they would still get their USD within the day.
It’s also likely people will start pricing their items higher to account for inflation – this may be a poor choice, however, as higher prices despite a lower L$/USD value are likely to discourage sales. On the other hand, what is likely to spur sales is either no change in cost to the consumer (in which case a cheaper L/USD exchange will mean cheaper cost to the consumer) *OR* a sale of existing items to increase the likelihood of impulse buys (with the decreased L/USD value doubling the incentive!).
It’s highly likely that, by the end of today, we will still have a rate that is substantially higher than the L$264 we started off with, but above and beyond all this, it is important for folks to calm down, stop thinking about the SL Apocalypse, and either take measures to improve movement in the market (increase sales) or to support fellow residents and get a good deal while you’re at it.
So there you have it. Grab your towel. Relax. Support the SL market if you can, and most important of all, Don’t Panic.