Kingdoms of Amalur developer lays off entire staff

[blastingcap]

You want to talk economic theory and history? what a laugh. Did you know about the Asian currency crisis back in 97? Did you know how the Chinese great leap forward with government production target that caused starvation of millions? You think government regulation on FX rate and other thing don't cause failure? Seriously, are you sane?

(poster goes on to completely miss the point)

Wtf? I am not talking about this particular instance of investing in a video game company.

I also stated quite clearly near the end of my post that I am not saying the opposite extreme is any good, either.

Btw, are you aware that the US govt had to coerce Wall Street to bail out LTCM during the 97 crisis? Are you aware that private industry did jack sh** to get the country out of the 1930s Depression? Not that I agree with Keynes on everything but he did have a point.

The way this corrupt system works is that private companies privatize gains, but socialize losses. It happens over and over again, PBGC, TARP, bailouts of AIG and the banks, etc. And no not all Crisis related money was paid back despite what Faux News may tell you about TARP.

Thank you for admitting that there is no Adam Smith-style free market, though it would be insane for you to argue otherwise.

I think it's pretty clear that we're talking about different things as you seem to have interpreted what I wrote to mean that I am pro-government-to-the-hilt despite my very explicitly disclaimer otherwise. I was simply criticizing the unthinking "free handers" and their unthinking religious belief in what is so obviously a pipe dream (Adam Smith's free market as idealized by him). If you have a genuine interest in economic history, I recommend starting with Heilbroner's classic book, The Worldly Philosophers.

Look, I'm not saying capitalism is perfect but there is more logic to my way of thinking than perhaps you realise. Take China, they were very poor until their government started embracing free market principles and they are now on track to becoming the worlds greatest superpower. The USA became the worlds greatest superpower by manufacturing goods and selling them to the world. You may not realise but the united kingdom, where the industrial revolution started, was once known as the workshop of the world and they also became very wealthy.

Something else you may not be aware of is that the USA is going to collapse in the not too distant future. As is much of Europe and the uk. When creditor nations stop lending the US money it's game over because the US's service sector economy depends on credit and without it, it won't survive. Why would countries stop lending the US money? well because the US has no way to earn the money to pay them back. Why? Because the US hardly produces anything anymore, all they can do is borrow more and more money. It's a rat hole. The sums of money the US is going to need in future are going to be untenable and anyone caught holding the bag is going to lose a lot of money. What I'm saying is, default on the debt is inevitable. Yeah, they could just print it and pay their creditors back like that, but at that point massive inflation occurs and borrowing any more money becomes extremely expensive due to massive interest rate hikes, so it's still game over.

Now, when the service sector collapses what is going to replace it? Nothing. What the US needs is manufacturing jobs so they can sell to nations who DO have money, but the US can't compete with those countries, why? Is it because China devalues it's currency? I don't think so, devauling ones own currency is easy, just send everyone a check in the mail and add as many zero's as you want. The reason is because it's expensive to manufacture in the US because of regulations and taxes. I've heard economists say that the US will never be able to compete in manufacturing with china, but they must. Basically China is just a bunch of people and America is just a bunch of people, so what's the big difference? Why is one so competitive while the other one isn't? Government. The minimum wage needed for someone to survive in China is much lower. Anything that raises the cost of living damages the economy because the wages needed to survive are driven higher. Taxes do this and regulations make doing business more expensive.

It is my belief that the whole world can be wealthy, some think that it's a zero sum game, one country gets richer while another gets poorer. What you have to understand is that capitalism and productivity actually creates wealth. Thinking in terms of money confuses the situation, imagine there is no money and we just barter with whatever we produce, would the world be a more wealthy place if we produce very little or if we produce very much?

Capitalism doesn't just distribute wealth, it creates wealth. I mean, do you think we are more wealthy, now, as a species or when we were all living in caves? we have obviously created wealth since then and we can create more if only we would embrace capitalism again.

Edit: A lot of what I've written above doesn't seem really relevant in response to what you said.

- I don't think Wallstreet should have been bailed out by the government.

-I don't think the gov. should have guaranteed any housing loans.

- I don't agree with the FED devaluing the currency which is what enabled the housing bubble to exist.

- I also don't think the government should make any guarantees on anyone's deposits. Now, I know they do this to try and prevent bank runs and bank runs are obviously very serious. The problem is, that now no one gives a crap about what the banks do with their money or what risks they take because depositors know they'll get their money back w/e so who cares?

- One reason why so many people are attracted to wallstreet is because of the inflation created by the FED and the more inflation there is the greater the risks people are willing to take to make returns. Wallstreet does very well out of inflation because yes the prices of many things go up but they get more than their fair share of the liquidity.

Edit: In response to your Adam Smith comment. Do you know the single best thing that China could do for its people's living standards and the world economy? Let their currency rise. If they did that their money would rise in value hugely compared to other currencies and importing goods from other countries would become ridiculously cheap. Why would it benefit the world economy? because profit seekers would start building factories in other countries who didn't have a strong currency or economy and then that country would slowly become more wealthy, their currency would rise just like China's did and the story would repeat itself and keep repeating itself. Adam's Smiths theories haven't really been given a chance because governments keep fing it up.

I am well aware of everything you wrote including the other posts you made about market manipulation and interest rates, currency debasement, etc. It is orthogonal to the point I made about how Adam Smith's free market is a pipe dream.

And yes I agree with you about your economic forecast, though perhaps not for the same reasons. Yes there is currency debasement (de facto), but there are other factors in play as well, whether in resource scarcity, the implosion of the Euro, or the ridiculous $1 trillion student loan debt that will likely end similarly to how the mortgage bubble ended... more bailouts and de facto currency debasement. You left out Japan, but they are going to take a big hit as well. The funny (in a very non funny way) thing is that despite all of this, you are still likely to be better off in the US, EU, or Japan, than in most other countries. That's because eventually we will either default or inflate our debts away. The losers will be the morons holding government bonds.

 

[titan131]

You left out Japan, but they are going to take a big hit as well. The funny (in a very non funny way) thing is that despite all of this, you are still likely to be better off in the US, EU, or Japan, than in most other countries. That's because eventually we will either default or inflate our debts away. The losers will be the morons holding government bonds.

I agree that people holding government bonds are going to lose big time. China will lose perhaps all the money they have invested in US bonds and will lose their main export market, but they'll still have all their factories to make the stuff they need, so their domestic economy should be relatively strong. Countries like Brazil, India and China are kind of geared up for being poor, I'm not sure the US is going to cope so well. A lot of poorer countries make and grow the things they need themselves, often locally, the US imports a lot of the things it needs. There are also a massive number of guns in the US which I think will become relevant when things seriously deteriorate. All in all, I feel the US is going to be one of the worst hit places as this unfolds. It's going to be a case of no factories, no jobs, no money, not enough food to go around and a shit load of guns and ammo. Just IMO.

 

[blastingcap]

I agree that people holding government bonds are going to lose big time. China will lose perhaps all the money they have invested in US bonds and will lose their main export market, but they'll still have all their factories to make the stuff they need, so their domestic economy should be relatively strong. Countries like Brazil, India and China are kind of geared up for being poor, I'm not sure the US is going to cope so well. A lot of poorer countries make and grow the things they need themselves, often locally, the US imports a lot of the things it needs. There are also a massive number of guns in the US which I think will become relevant when things seriously deteriorate. All in all, I feel the US is going to be one of the worst hit places as this unfolds. It's going to be a case of no factories, no jobs, no money, not enough food to go around and a shit load of guns and ammo. Just IMO.

To be fair, lots of Americans hold treasuries as well, so social security will get decimated but anyone relying on that is foolish. I didn't say things would be rosy in the US, just less-dark than other places. You forget the self-correcting nature of currency crises. Outsourcing overseas will lose its appeal, and may even reverse (relocalization). The propery laws, abundant clean food and water, etc. make the US a safer place to camp out than many other countries, possibly even China which is only doing well because they sell stuff to other countries. When the export market craters, that will mean mass unemployment and lots of turmoil in China--precisely the reason why they can't really stop buying US treasuries all of a sudden.. maybe slowly taper it down over time but they definitely don't want to spook the market.

 

[Wreckem]

They filed for Chapter 7. 38 Studios listed $116million in secured liabilites. $33.8million in unsecured liabilites, of which $2.5million is in owed wages and another $1.7 to Salvatore for his writing for KoA. Speaking of KoA, it only generated $22.6million in income for 38/Big Huge Games.

Big Huge Games has a separate Chapter 7 filing, with their total liabilities listed at $124million. Thats right, 38/BHG has a combined debt of $274million. Their combined assets only total $22million, but are expected to fetch a fraction of that during liquidation.

It also turns out 38 Studios also borrowed $8.5million from the Bank of RI THIS year. This loan probably was to cover the several instances they almost missed payroll/bills this year. The loan was secured by 3200 gold coins belonging to Schilling. Schilling all told personally guaranteed $12million in loans.

Finally, it looks like the RI AG, the US AG, the USAO for RI, and the FBI are investigating the financial downfall of 38 Studios. For 38 Studios sake I hope it was just overspending and mismanagement rather than financial improprieties.

The above was sourced from a variety of news sources.

http://www.businessweek.com/ap/2012-06/D9V8GIEO3.htm
http://www.gamasutra.com/view/news/...es_bankruptcy_under_investigation_by_feds.php
http://news.bostonherald.com/busine...ios_files_for_bankruptcy/srvc=home&position=3

 

[Gibsons]

They filed for Chapter 7. 38 Studios listed $116million in secured liabilites. $33.8million in unsecured liabilites, of which $2.5million is in owed wages and another $1.7 to Salvatore for his writing for KoA. Speaking of KoA, it only generated $22.6million in income for 38/Big Huge Games.

Big Huge Games has a separate Chapter 7 filing, with their total liabilities listed at $124million. Thats right, 38/BHG has a combined debt of $274million. Their combined assets only total $22million, but are expected to fetch a fraction of that during liquidation.

It also turns out 38 Studios also borrowed $8.5million from the Bank of RI THIS year. This loan probably was to cover the several instances they almost missed payroll/bills this year. The loan was secured by 3200 gold coins belonging to Schilling. Schilling all told personally guaranteed $12million in loans.

Finally, it looks like the RI AG, the US AG, the USAO for RI, and the FBI are investigating the financial downfall of 38 Studios. For 38 Studios sake I hope it was just overspending and mismanagement rather than financial improprieties.

The above was sourced from a variety of news sources.

http://www.businessweek.com/ap/2012-06/D9V8GIEO3.htm
http://www.gamasutra.com/view/news/...es_bankruptcy_under_investigation_by_feds.php
http://news.bostonherald.com/busine...ios_files_for_bankruptcy/srvc=home&position=3

1.7 to Salvatore? And that's just what they owe, not what they've paid. Wonder how much McFarlane got.

 

[Wreckem]

1.7 to Salvatore? And that's just what they owe, not what they've paid. Wonder how much McFarlane got.

Apparently Salvatore's contract was allegedly structured to where he was to see his first payment this October, and the $1.7mm is actually $1.7mm+. It wouldnt surprise me if McFarlane had a similar contract(hes known for accepting bad contracts like that).