Topic: Critique of the various businesses run by usagi - page 3. (Read 5404 times)

Look at c.  look at d.

If BMF has only sent 10 bitcoins (which is in fact incorrect - it sent 20 right at the start) then BMF is in default.

"per calendar week for 110 weeks" has a meaning.

IF your argument is "Well yeah - CPA is on the hook, but BMF hasn't claimed and the 110 weeks aren't so over so there's no default" then you seriously have some issues.

In your role as manager of BMF you have a responsibility to act in BMF's interest.  How is it in their interest not to claim when they're entitled to?  Anyone who sold shares since a claim would have been valid has sold at a lower price than they should have, had you not decided that your conflict of interest would be addressed by acting in CPA's favour and putting your fingers in your ears every time you were asked about it.

It's plain and simple : By not claiming you defrauded your BMF shareholders.  The fact you also run CPA in no way absolves you from doing what's right for BMF investors if it might happen to inconvenience CPA.

That's why your sort of intertwined mess of half-baked, failing companies should never be allowed to happen.  And if you can't even SEE why it's wrong to act against against the best interests of BMF then you shouldn't be allowed to run anything.

How the fuck does it help BMF to pay 5 BTC per to CPA per week then not claim when they're entitled to?  They already agreed to pay more in premiums than the amount covered - so the least that should happen is they get promptly paid when they're actually entitled to claim.

And as you wear both hats (CPA and BMF) you should be extra careful in making clear to ivnestors what is happening when the two entities interact.  i,e, explain to them why you aren't claiming, or that you HAVE claimed - just never mentioned and have no deadline on when they'll get paid.

Or is the plan to say "well BMF missed its payments and defaulted - so there's not any cover any more"?  That would be the most hilarious excuse ever - that you (deliberately) defaulted on yourself so as to screw one of your companies to help another stay afloat.

You totally and utterly fucked up on that contract.  You MUST know you did.

I do, however, agree that technically CPA may not have defaulted.  BMF definitely has (by not making the agreed payments).  But the ONLY reason CPA hasn't defaulted (if it hasn't) is because YOU decided that BMF wouldn't claim (and we KNOW BMF hasn't claimed - do I need to quote you to prove it?) for no conceivable reason of benefit to BMF's shareholders.  They were entitled to funds from CPA - you refused to claim those funds (or pretended you hadn't noticed - which in some ways is even worse).

How do you manage the apparent major conflicts of interest that appear to happen with all these funds and the insurance company you are running ?

I dont think people would be complaining if you were only running a mining fund.

When you did the motion for BMF to sign the contract with CPA did you even mention that you are the operator of CPA and thus it would present a major conflict of interest ?

Im simply pointing out that you fail to declare these conflicts of interest nearly every time. You dont need to declare anything if you sign a contract with "bumfuck insurance" but you do when its with CPA. A company YOU RUN You made a motion and failed to declare your conflict of interest to the shareholders, which may have changed the outcome.

You need to learn to read.  I'm talking about CPA's guarantee on nyan.a - not the already defaulted-on cover of BMF.  You're guaranteeing nyan.a against loss (and trying to close nyan.b - leaving them without protection from nyan.b's assets).  nyan.a is heavily invested in BMF - and CPA is pretty much entirely invested in BMF.  So how can CPA guarantee against BMF loss?  If BMF massively devalues, CPA has nothing to use to honour that guarantee with.

Sure -it's an IF.  But isn't that what insurance is for you idiot?  If you KNEW it wouldn't happen you wouldn't NEED insurance or a guarantee.  If you knew it WOULD happen then you wouldn't do it.  It's only when there's a CHANCE of it happening that you want insurance or a guarantee - and you don't want your insurer to be in a position where if you need cover it's a guarantee they can't give it.

And of course we ALL believe that you were going to impose that (unverifiable) condition.  I presume they could sell shares they already hold?  How about if they sell them by transfer to someone else (who may, or may not, be another account of theirs or working in collusion with them) for 1.0 and that someone else then sells them for .99?

It's a dumb idea.  Period.

Yes - plenty of IPOs offer discounts on bulk purchases.  But it only makes sense if the IPO is going to sell out (or if there's a deadline on sales) - otherwise they just end up with further sales blocked by resellers making a quick profit on a flip, with no extra shares sold (a problem I've seen a few IPOs run into).

What a laod of junk.

You made the contract to "test that kind of contract"?

Then annouced to your shareholders that they were insured - but never paid out when what they were insured against came to happen? Some test.  

You also stated that the policy was passed by a motion.  What motion?

Where did I complain that the contract existed?  What I said (in summary) was that if it didn't cover BMF against loss of NAV what DID it cover?  And you've still not explained what it covered if it wasn't that.

Just saying "there's nothing wrong with what I did" and "it was just an experiment" (the latter a paraphrase) in NO WAY WHATOSEVER explains what benefit BMF got from signing that contract.

No.  Deprived corrected his own typo.

Yeah, conflict of interest is definitely one the problems that has happened.  I've specifically referred to it a few times - most notably in the CPA insuring BMF debacle.  usagi negotiated and agreed the contract for BOTH parties to it - without bothering to even inform share-holders in advance, let alone ask them to approve it.

There's been other conflicts of interests - such as one of the nyans (can't remember for sure which one - 95% sure it was nyan.b) lending cash interest-free to CPA and disguising it on the books as an investment.  That was clearly against nyan.b's interest.  Hmm, on reflection maybe it wasn't - there's a case to be made that nyan.b giving an interest-free loan that it was confident would be repaid is more profitable (i.e. makes less loss) than usagi actually investing it.  I somehow doubt usagi would use that argument though.  Not only was that a conflict of interest - there was also an attempt to deceive investors by putting it on the books as an investment.

There's other examples as well - but they aren't amusing enough to warrant the time explaining them in detail really.

Because of all the inbred share holdings in one another, there's an ongoing conflict of interest.  e.g. nyan.a holds a ton of shares in BMF.  nyan badly needs liquidity (to buy-back all the sells at 0.99) and BMF needs to sell more shares.  IF the two had seperate management then there's a good chance nyan.a would just start selling off its BMF - but it won't whilst usagi also runs BMF and is desperate for its price to rise into the ask-walls for funds to get new hardware.

Which reminds me - time to buy up some BMF and relist at .49 which is where usagi has stated it'll be supporting the price.  More free money I guess (I would be doing that if I was actually confident usagi would deliver - I'm not confident, so I won't: but it's free money for any true believers still left).

https://bitcointalksearch.org/topic/m.1243259  I think this is relevent to usagi re: fiduciary duty and declaring a conflict of interest.

Ive not seen usagi post anything in the OP of any of the funds they run about conflicting interests they may have. In the CPA thread for example usagi doesnt mention NYAN.A or BMF which is required as a fund manager imo.

Usagi has never ever brought up the conflicts of interest and this is quite telling.

(quoted from Icebreaker)

Well since we're doing this, here's how the mess began:


So yeah. As clearly demonstrated by the many theoretical points of Deprived and by a couple practical points above.

Precisely.

Nyan only really exists because usagi totally bodged up the way the nyan.x thing was set up.

In a tranched CDO there should only be one pooled collection of assets - so one portfolio jointly owned by nyan.a, b and c.  With the dividends distributed to the various tranches (and the assets distributed in the case of closure).  For whatever wierd reason, usagi instead tried to have a seperate portfolio for each.

I suspect it thought that was the way to spread risk between the different nyans - when it fact risk is already distributed based on the seniorities of the various nyans (the order in which they have claim on assets).  Similarly, reward is split based on the defined means of dividend payout.

So instead of the current mess - where assets are shuffled between different nyans (fairly transparently, in all honesty) there should just be a single portfolio shared by all.  And the content of that portfolio could be defined as being kept to X% high-risk, Y% medium risk, Z% usagi's own businesses - or whatever.

But then you start to run into problems if the number of each type of nyan sold isn't roughly in proportion to the risk categories.  That COULD be managed (if you had a single portfolio) by dynamically adjusting the % of each type of investment in line with the outstanding bonds of each type.

The official reason for nyan was to attempt to manage the balancing of the different other nyans.  The real reason (in my view and this is pure conjecture) is that usagi just wanted to make something very 'clever' and 'complicated' to impress the market.

One of the main reasons nyan (the whole thing, not just the parent company) is in such a mess is that usagi totally screwed up keeping the investments balanced.  nyan.c was the main thing that sold - and nyan never had the capital to attempt to create a more balanced funds.

Despite the APPARENT seperation of nyan.a, b and c the fact remains that the way they actually operated is as though it were all one big portfolio.  And that portfolio ended up being pretty largely invested in very high-risk stuff.

Of itself, that isn't a problem - after all, most of the sold bonds are ALSO nyan.c.  But then you run into the problem that screw it all up.  usagi is in total denial when it loses money - and tries to maintain the fiction that all's well when it ain't.  That means that usagi was over-valuing nyan.b and nyan.c and then compounding the error by buying back stock at the fictitious price.  That buying back (because it's at too high a price) further devalues the TRUE value of what assets remains, making the actual realisable value for the remaining nyan.b stock-holders even worse than it already was.  That then led to even more fantasy valuations, exascerbating the problem even more.

Going back a little bit, why does the ratio of nyan.a/b and c actually matter?  Well you have to consider what function each provides to the other:

(I'll just discuss nyan.b and c - but similar principle applies with .a as well)

nyan.c provides nyan.b with extra security - as nyan.b gets to call on the chunk of assets 'held' by nyan.c before nyan.c does.

In return nyan.c gets any overflow of profits from nyan.b

The actual VALUE of those benefits depends very much on the relative number of each type of nyan.

if there's 10 nyan.b to each nyan.c then each nyan.b is getting the protection of 1/10th of a nyan.c worth of assets in return for handing over to the single nyan.c the overflow from 10 units of nyan.b.

Conversely, if there's 1 nyan.b to each 10 nyan.c then each nyan.b is getting the protection of 10 nyan.c worth of assets in return for handing over to the 10 nyan.c the overflow from 1/10th of a unit of nyan.b each.

It should be immediately obvious that there's a 100-fold difference between the two scenarios above in terms of the value each nyan type provides to the other.

Parent nyan was meant to balance the types of different nyan in the wildr.  That target balance was never disclosed, probably was never defined on any rational basis and definitely no balance was ever achieved.  I don't believe usagi ever truly understood how this sort of offering should be properly structured - as is clearly demonstrated by various of my points above.

Well.. you could always insure it with infinite Ego if you lack capability and/or expertise, I suppose 

Anyway.. Is this going to be the "Best of Usagi" thread? - I'm sure some psychology or economics major will end up owing their degree to Usagis flamboyant use of BistroMath and rampant self-denial, would be nice if they had a comprehensive catalog to choose from,  I think it should at least make 'Movie of the Week'

BTW: Anyone actually understand how "NYAN"(no .A .B or .C) fits into the Tetrahedron scheme of things?

Usagi should be viewed as a case study regarding what happens when a person with nearly zero knowledge of finance and business tries to manage a venture (let alone multiple ventures at once.)

To gain a clear picture; all anyone must do is:
1. Read Usagi's posts. There is a continual misuse and lack of understanding regarding basic financial terms.
2. Read the threads of Usagi's securities. See that Usagi argues against very basic math and logic that highlights his shortcoming and his misrepresentation/misstatement of information.
3. Look at the track records of all of Usagi's securities. It is pretty grim. While many other btc-based ventures have failed, it isn't really an excuse. There are indeed ventures that have been successful (in terms of investment from IPO.)

So long as Usagi continue to act in a similar fashion, he will likely continue to destroy shareholder value and run his ventures deeper into the ground.

See the bolded lines. Usagi doesnt keep his insurance premiums in bitcoins, he "invests them". And by his own charter, he shouldnt invest them in the same sector as the insured asset. In reality, he is not only doing that, he is investing in the very assets he is insuring.

Keep up this trolling and I'll ban you from my thread!!!

[/sarcasm]

Yeah - I was conflating two seperate issues (as much for simplicity as anything).

"and to not insure assets using other assets from the same or similar sector.".  If 100% of assets doing the securing are BMF then what % of insurance cover can be written to BMF (or companies with exposure to BMF)?  The answer is actually 0%, not even 25%.  In fact, with all holdings being BMF, CPA shouldn't be able to insure ANY mining company or investment company which has significant exposure to the mining sector.

To summarise more accurately (than in my original post) the contract:

CPA should have diverse assets,
No insurance policy should be backed by assets of the same "sector" as the insured.

At present CPA is nothing like following that - and, in the case of nyan.a, the "guarantee" is backed by exactly the most inappropriate asset you could find (other, I guess, than by nyan.a itself).

Not a typo. Unless you accidentally typed the truth. BMF is insured by CPA as well!

 BMF ("the customer") will be indemnified (by CPA) against loss defined
   as a NAV (Net Asset Value) of less than 1 per unit.
http://www.tsukino.ca/cpa/customers/account-12/

edit: well, you know that since you mention it already, but it doesnt make it any less true,

Was actually a typo which I'll correct - 2nd line was meant to say "Nyan.a is insured by CPA".

Its even worse than that, CPA also insures Nyan.A.

NYAN ("the customer") will be indemnified (by CPA) against loss defined
   as a NAV (Net Asset Value) of NYAN.A less than 1 per unit.
http://www.tsukino.ca/cpa/customers/account-15/

I am not sure you are applying this section correctly. The way I see it, this is dealing with *insurance* not *investments*. This section says that no more than 25% of the insurance policies sold will cover the same sector, however you want to define sector. The issue with BMF is more that all of CPA's investments (capital) is in one place. This is a huge red flag, a disaster waiting to happen, as you pointed out, but this section of the contract just does not apply.

The rest of what you said is good though.