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Weekly Market Report - simple week: everything drops

Day 1,748, 05:44 by Wilhem Klink


Short report: Everything drops.
Long report: Everything drops in price.

Weapon raw materials soften over the week, losing .03cc. Food raw materials gain a cent and the Raw Material Index drops 2.23 to 53.33, a 16-day low.

Food prices continue their flailing, spastic fall as Q1-Q4 endures a fifth straight week of 20%+ declines, shedding 44% for the week. Of course, large percentage drops are easier to come by when Q1 food sells for $0.08. A one cent decline is 12.5%. Good news: we've not much more room to fall. Bad news: there's not much more room to fall. The Food Index settles in at 14.76, an all time low. Food is less than 15% of the cost on Day 1600.

Weapon prices go on a week-long price chopping spree. Q1-Q4 once again halve their value, averaging a 51% decline for the week. 14 straight days where the price of a Q1-Q4 was less than the day before. And it undoubtedly will continue as world-wide prices on Q1-Q4 are lower than in the eUSA (more on that latter). Q5-Q7 also continue to throw off prices, just not as much as the lower-end. The Weapon Index slumps 1.7 to an all-time low of 27.83

Wages catch their breath with the 44% upgrade sale mid-week. More employers enter the labor market even as prices slide. Wages hold at 90 (give or take 1) for the week.The Wage Index is up slightly to 30.85.

Gold continues its downward death spiral, pushing past $800, then $700 to land in the upper 600s at week's end. The Gold Index slides 12 to 41.08.

The Big Graph:


And a closer look at the last two weeks

The weapon line is on a rapid decent, wages are holding and raw materials looks to have turned to a downward trend.

The 1600 AU Index
Based off of the amount of gold a player could earn in a year by working at market wage, selling 20 weapons, 200 food (both Q6) and 1750 raw materials (split 50/50 food/weapons) the 1600 AU Index strengthens midweek and then tumbles as the 44% upgrade lowers Q6 prices. Still the 1600 AU Index hit 446 midweek, a level not seen since Day 1601, meaning even with the reduced pricing, a player can make nearly as much gold as they were able to on Day 1600.
The Graph


A quick peek into the past: the following is a look at prices of items on Day 1600 (07 April) and on Day 1748 (Sunday 02 Sept). A player working at market wage, selling 20 Q6 weapons, 200 Q6 food and 875 food and 875 weapon raw materials at market prices could buy (roughly) 440 gold over the course of a year (at the prices in effect on that day), both with Day 1600's prices as well as Day 1748's. So while everything is cheaper, so is gold. Would you rather have Day 1600's or Day 1748's pricing?



Self-employment profits

The weekly look at how much a player can expect to make working their own facilities.



Welcome Q4 weapons to the "Don't Bother" category. Q5 weapon, your invite is in the mail. With the slumping market prices for Q1-Q4 weapons, each can not cover the raw material value it takes to make them. Q3 is particularly egregious: a player can sell 600 raw materials for $120. Or they can take the 600 raw materials, turn them into 20 Q3s and then sell the 20 Q3s for a net (after VAT) of $56.43. Amazingly, we still have players doing this.

Q5 weapons barely turn a profit, as do Q1-Q3 food. Its not until one gets to Q5 food where a decent profit can be had.
Graphs of the last few weeks
Q1s


Q2


followed by Q3


Then Q4


Employer
If self-employment is barely making money, then what happens if you pay someone.

Weapons, first

Profits are drying up. Q7 gets a bounce with the decline in raw materials on Day 1747 & 1748. One can see how much a one cent reduction in raw prices effects the profitability of a 4000-raw material based unit.

And food

Well, that's that. Unless one has a Q7, No Profits For You! Raw material upticks one cent, but the real culprit is the dropping market price.

And Raw materials


Not much there.


Its interesting to note that since anyone can buy from the market in any country in the eWorld they happen to be in, the market has become more global. One still needs a market license to sell in a country, but buying is open to anyone willing to pay the $20-80 for the move. Often times the eUSA market is pricey on low-end weapons, but cheap on high-end. For example, on Day 1748 at 3:00 eRep time here's the average prices of 50 Q1 weapons:

eUSa 1.13
eHungary 1.00
ePoland 1.09
eRomania 1.00

an eUSA citizen who happend to be in eRomania could buy 100 Q1 for $100 and sell them in the eUSA for 111.87 (after tax), a nice 11.87% profit. Of course, this drives all prices world-wide to the same level (adjusted for tax).

Q2 weapons were similar, but not all countries were cheaper:
eUSa 1.39
eHungary 1.24
ePoland 1.15
eRomania 1.48

At Q5, its roughly even
eUSa 10.20
eHungary 10.35
ePoland 10.10
eRomania 12.32
Certainly not enough to make much of a profit on

World-wide markets are usually a good indicator where prices will head. There are certainly enough players who buy cheap foreign and sell locally at a profit that no one country can have an ecomomy that is not interconnected to others regardless of trade bans.


5-Day moving average

For those unfamiliar with a "moving average", in the following charts, the blue line represents the market price at 3:00 eRep time. The red line in the 5-day moving average (average of the last 5-days) of market prices. What that tells us is whether prices are trending downward (the market price is below the moving average) or trending higher (the market price is above the moving average).

Gold's decline


Bonus Gold graph. Just because the 1600 Index has it. Overlaid with events




Wages holding steady.

Some Q2s. First weapons


The steep drop after the recent rocket mission is stark.

Food, then


Q2 food has been in a sharp decline for 5 weeks.

Food raw materials


Holding steady

And lastly, weapon raw materials

Giving some ground as of late.



Note: prices are reflective of a percentage of Day 1600's price (Hence the "1600 Index"). In other words if an index is quoted at 88, that days price is 88% of the price on Day 1600. Except the 1600 AU Index which represents an amount of gold one can buy given market conditions as noted in that section.

Methodology on prices: prices are taken at 3:00 eRep time. The price is the average price of buying 1,000 Raw materials, 500 Food, 100 weapons (at each quality level), and 8 gold, plus the market wage less any fraction of cc (so 240, rather than 240.1). All qualities are standardized to Q1 (per hit or per health).

Sic transit gloria mundi





 

Comments

CryingLightning
CryingLightning Day 1,748, 07:11

Voted as usual!

GLHalJordan
GLHalJordan Day 1,748, 07:41

More sexy graphs! Voted.

mhilly
mhilly Day 1,748, 07:51

Thanks on the addition of RM employer profit. With this and the self-employement data the message is clear: dissolve Q1-Q4 weapon companies and build rubber plantations if you don't want to be affected by low gold value since you would exchanging gold for gold.
However if admins keep on introducing sales to encourage rocket production then you would miss out on profit by not being able to sale Q1-Q4 weapons. This is want bugs me: not being able to plan long-term strategically. Too many changes.

Plugson
Plugson Day 1,748, 08:16

more sexy graphs! x2

I'm going to have go smoke a cigarette now.

Aquila Grant
Aquila Grant Day 1,748, 10:58

What I find interesting is that it is not just a small number of players operating their factories at a loss, but rather it is hundreds of players. For Q1 – Q4 weapons, I counted 297 offers below profit level. Anyone have any thoughts on why this is the case? Some of the selling may be the arbitrage that you mention, but I think that only explain some of it. Another possibility is that weapons are being given away via different forums and so selling them is not a direct loss.

Wilhem Klink
Wilhem Klink Day 1,748, 12:10

I honestly think there are a number of players who don't realize they are selling at a loss. The Q1 seller who has 200 listed is probably an arbitrage seller. The player with 20 Q1s - they just don't realize it.

Wilhem Klink
Wilhem Klink Day 1,748, 12:20

@ Mihai Hilly - if you want to take advantage of the rocket factory missions, buy 1000 Q1s at 1.10 plus the storage to hold them ($1,100 plus $1750 for the storage) and hold them until the next rocket mission. Then sell them for $5.50 on the first day (income is 5,500 less the 2,850 invested = $2,650 profit). High prices from missions only last 2-3 days and unless you have lots of Q1 factories, you'll miss out.

Anderson Pimentel
Anderson Pimentel Day 1,748, 16:59

Great article! Voted as usual.

About Q1~Q4 players that sells weapons below cost price, I think it's because they produce their own weapon raw materials and somehow they believe that it doesn't have to account as expenditure. In Brazil, we have the same problem, it's worldwide.

mhilly
mhilly Day 1,748, 18:35

It's an excellent idea Wilhem, but is still a bet. Hoping for the next missions to involve rockets.

I also agree with you Anderson somehow some users can't realize they are better of by just selling their WRM and not working their weapon company. Nice newspaper of yours as well. I subscribed and can practice my portuguese.

RikW
RikW Day 1,749, 00:57

It depends on how you define loss, if you produce the raws yourself you are missing profit, but you still earn money, although not as much as you can.

If everyone is paying attention, prices will rise, since nobody will sell at a loss, and there will be a demand

Anderson Pimentel
Anderson Pimentel Day 1,749, 01:39

I define loss as in economic loss. You can have accounting profit if you produce raws yourself but currently you have economic loss in all Q1~Q4 weapon factories.

People don't usually understand the idea of opportunity cost.

Anderson Pimentel
Anderson Pimentel Day 1,749, 01:43

@Mihai Hilly, thanks! If you need any help in understading my newspaper, feel free to send me a pm.

Phitio
Phitio Day 1,749, 06:30

We are in full deflation.

In RL the massive overproduction would bring to defaults and farms going broke, equilibrating the offer. Here this offer destruction isn't implemented. The admin supplied with an increased demand, via buyer bots.

The economy will drown in overproduction without buyer bots, it revive a little when special offers and missions, but very fast it collapses again.

So here is the definitive bubble, the "admin bubble": rampaging special offers until all blows up

sulmuesi
sulmuesi Day 1,749, 12:40

Immense work. Subscribed and voted!

sulmuesi
sulmuesi Day 1,749, 12:43

And I hope less people would read this article

Dariuswolff
Dariuswolff Day 1,749, 23:12

I commend you and donate a bit to your cause as usual!

Swine
Swine Day 1,750, 04:48

Glad you are back! o/

Hell.YEHHH
Hell.YEHHH Day 1,750, 07:49

V +S

 
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