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Thursday, October 6, 2011

The Goons screwed up - an Industrialist's take on the Blue Ice debacle.

Paul Clavet over on My Loot, Your Tears  ran some numbers on what it costs a miner to mine Blue Ice right now. He intonated that any Industrialist would be stupid to mine Blue Ice right now. Perhaps, but that's not what this article is about.

The Goons are blowing it. The market play is over. It's spent. The Goons need to take their winnings and walk away from the table. Here's why.

The Goons have had good success in pushing prices up. The latest moving averages show that the price has doubled.

But the shock has worn off. The price is now flat and has been for a day. The trend is downward. That's a trigger point to sell. It's one thing to have a high price. It's another to have buyers. The sell off will take longer than the buy in. The entire time the price will drop steadily while the market finds equilibrium again. If they don't start the sell, someone else will. They don't have all the Oxygen Isotopes.

Then there's the price of Mackinaws.

The price is already trending down. They've already lost 50% of their potential profit. Obviously Mackinaws were purchased in bulk just prior to the start of this Mackageddon, but this hand is playing out much faster.The Goons are already past their trigger and loosing more ISK the longer they wait.

I checked Ice Harvesters and some other ice mining gear and there was no activity on these items. That was a mistake. They should have bought up ALL the ice mining gear. Then they should have sold it at rock bottom prices. This would have made the play last longer because miners would have gotten a better return on their efforts.

Hell, the Goons should have sold subsidized Mackinaws! If they could drive the price of a Mackinaw and gear BELOW the amount a miner could still make Blue Ice mining, they could have drawn this play out a very, very long time. The key is to control the supply, not eliminate those who provide it.

How cheap should they sell Mackinaws? Well, here is insurance on my Hulk Blue Bucket.

A Mackinaw is, of course, cheaper but it's the percentage that's important - not the totals. I can recoup 36 million credits of my hulk with insurance or about 20% of it's cost. If it was a Mackinaw, that would mean I'd need to make 120 million ISK to break even. That drops mining time to 6.5 hours or so. If the Goons drop the hull price in half and practically give away modules it might only take 3 hours. Paul's own estimates give a miner at least 4 or 5 hours before they're popped. Miners would make a little profit. They'd have fun trying to "mine dangerously" (we like a little excitement from time to time.) The price of Oxygen Isotopes would continue to climb slowly as it's rarity took hold.

So what's the point of all this mumbling? The Goons have already hit their trigger point. They are past maximum profit. They also did nothing to draw out "the crisis" as long as possible. They never stopped to consider that it would be better to allow miners to make a little so they could make a whole lot more. It seems to me that the entire operation is rather amateurish. The Goons should go back to PvP. As Industrialists I find them wanting.

Fly careful.

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