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Old 2009-07-31, 17:27   Link #57
cicero
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Join Date: Oct 2007
Quote:
Originally Posted by velvet nightmare View Post
wanted to summarize the transactions this episode for those people who got confused by it, took me 3-4 watches of their discussions to figure out what they did

ok so initially with amarti owes 1000 silver to lawrence for 'buying' horo. therefore he has to raise funds.

lawrence's current contracts

+500 -received now with the promise to pay back amarti with 500 worth of pyrite the next day

-500 -uses the 500 he received to buy the pyrite he will eventually have to pay back to amarti the next day. he tried to get mark to do it for him using his connections but he refused to stake his reputation, so now lawrence has to do it him self with alchemists. purchase has to be made discreetly as to not destabilize the market with a massive 1 time purchase of 500 worth of pyrite

+500 - 500 = 0, today lawrence's net position is 0 and has 500 worth of pyrite in his pocket

therefore next day:

1) lawrence fails and prices go up -he will have to give back 500 worth of pyrite even though he could have sold it for lets say 1000 if he were not in the contract. therefore lawrence gets nothing and amarti gains 500 and horo

2) the rumor succeeds and pyrite prices plummet. -lawrence gives the 500 pyrite to amarti now worth 0 let's say. lawrence's net position is still 0, and from amarti's perspective he gave away 500 silver the night before for nothing

the clincher is that amarti still owes lawrence the 1000 silver for horo though he is now short 500 from his original position

based on the letter horo left for lawrence, it said that amarti had 700 silver in assets. so if market prices for pyrite goes up, it'll (should) push him over 1000 mark easily without him doing anything, however, if prices go to 0, he's now at 700-500=200 way below what he actually needs

i'm 70% sure this is what's going on though i could be mistaken because lawrence doesnt make actual 'profits' as he is reducing someone else's


in any case after watching the middle part again where lawrence gets the message from horo, i can say that she effectively 'raised the stakes' for all parties. so lawrence now knows more about amarti's position allowing him to take advantage of it, but at the same time he will lose the ability to ever be with horo again b/c she will be locked into marriage (compared to before where she was just freed?)
I think I'm going to elaborate a little further on what you're saying.

Lawrence is essence doing a modified version of shorting with Amarti being the lender. Lawrence doesn't directly borrow 500 silver worth of pyrite, but he might as well have, since if he had done so and immediately sold it at the current price, the situation would have been the same. However, they had to do it this way because: a) Amarti doesn't have 500 silver of pyrite, but he does have 500 silver b)If Amarti gave Lawrence that much pyrite, he will have already lost, for reasons explained below. The way it is now, Lawrence has to buy up the pyrite himself if he wants to influence the market (thus forcing prices up, in Amarti's favor) which is why he was trying to do it as subtly as possible. Of course, Mark's advice is even better. By buying from the alchemists, he avoids influencing the market at all, since they ordinarily wouldn't buy or sell. He's exploiting his access through Diana. I suspect he might only be able to convince Diana by telling her everything he knows about Horo.

The contract favors Lawrence because:
Ultimately, pyrite is worthless. In the long run it's value will drop to zero.

The contract favors Amarti because:
Right now, the market pressure is for the pyrite's value to go up. The timeframe is short (one day).
Amarti has given his liquidity, which has the power to drive prices up, to Lawrence, to whom it is worthless directly (hence why he has to find shady ways of using it). Amarti has held on to his pyrite, which he could sell to drive prices downward, and therefore it would be useful...only to Lawrence. (Unless he could find a shady way of selling it and then using the cash to drive prices up. The irony that would occur if he ends up selling to alchemists who then sell it to Lawrence...).

However, the power to sell pyrite is more powerful than the ability to buy it, since if Amarti had just given Lawrence that much pyrite, Amarti would basically end up trying to buy it off Lawrence, who would obviously refuse. So it's helpful that Lawrence has been given gold, not pyrite. (Of course Lawrence's genius is that he got the pyrite anyway...probably).

I don't want to make Horo out to be a commodity, but that does make things easier to visualize. I've tried to think up every possible ridiculous scenario:
*takes deep breath
Spoiler for seriously, this is long:


Personally, I think Lawrence has f'd up way too many times in a row for him to mess up again. I think he actually wins and the market collapses. When he triumphantly shows up to give Amarti his worthless shinies, Amarti pulls 1000 silver from a back pocket (to quote another poster: "his ass"), since he found a way to somehow convert 200 silver of assets into 1000 (possibly by selling the pyrite early enough. Bubbles grow fastest just before they break.) Lawrence is heartbroken but then Horo shows up and tears the marriage contract in half because she wasn't really expecting this to happen. In return, she gets Lawrence to absolve her fake 1000 debt so Amarti doesn't have to pay for her freedom.

Well it's a possibility.
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