Goonswarm's Ice Interdiction: The Power of Speculation

Less than a week ago, the Goonswarm's fourth ice interdiction came to a close. This particular interdiction focused on blockading White Glaze, a Caldari-native ice primarily used in the production of Nitrogen Isotopes. This event also demonstrated the overwhelming power of economic speculation and how a single announcement by a powerful entity can drastically change a portion of the market.

First, some background information. Speculation, at its core, is taking advantage of a fluctuation in a market with the hope of turning around a profit. Speculators (those who speculate) are commonly found throughout the stock market and the real estate industry. If you have ever bought a particular company's stock because the price was low and you knew the price was going to increase soon, you were speculating.

The previous three Goonswarm blockades on ice were reliably predictable. The prices for Blue Ice and White Glaze, as well as their accompanying products, increased radically while their traded volume decreased. So, it's no surprise that within minutes of the next interdiction being announced, the speculators went insane. The median price for Nitrogen Isotopes doubled and the sell price for White Glaze doubled, as the Eve-Markets.net screenshots below demonstrate.
 
The spike occurs just before August 6th, which is when Warr Akini wrote his Jabber ping announcing the interdiction. Clearly, either rumors regarding the interdiction were spread before the announcement, or the high-ranking members of the CFC own some very rich trading alts.

What's interesting about this interdiction isn't the price spike alone, though. Despite the ice blockade, the volume of both products traded each day was not affected - on the contrary, volume increased. This is particularly curious, as previous blockades resulted in a huge decrease in volume; during the first interdiction in Gallente space, the volume of Blue Ice traded decreased by 80%, as the graph below that CCP Recurve created in 2011 shows.

The massive fluctuation in price with no accompanied shift in volume can only be explained by a failure in the effectiveness of Goonswarm's blockade. The speculation of the interdiction drove the price of White Glaze and Nitrogen Isotopes up, but there was no decrease in the supply of either product, hence why the volume traded remained relatively stable. Now, that's not to say that the ice interdiction never happened; I've seen the killmails, I've seen the CFC Catalyst gangs, and I've seen the tears in local chat. However, the interdiction wasn't as effective as previous blockades.

There could be a variety of reasons for this, and Warr Akini probably knows them in greater detail than I do. A lack of participation due to the invasion of Delve could be one reason why the blockade wasn't effective. Another reason could be that the majority of ice miners anticipated the interdiction and were prepared beforehand, tanking their ships and avoiding ice belts when the number of Goons spiked in local. And, of course, there's the classic tinfoil hat theory that the interdiction was a massive pump-and-dump fraud orchestrated by the officers of CFC for their own personal wealth - which actually has some weight behind it, considering the small price spike shortly before the official announcement pinged over Jabber.

An even more interesting concept to think about is how this "failed" (for lack of a better word) blockade will affect future interdiction endeavors. Perhaps the next time the CFC decides to invade highsec, speculation won't spike the price as high due to a lack of confidence in the CFC's ability to blockade ice. I, for one, think the next interdiction will be the most drastic of them all.

Comments

  1. Some people still maby had stocks from the Ice changes in Odyssey, where they expected the ice go up more than it actualy did.

    ReplyDelete
    Replies
    1. Or maybe the white glaze mined in Goon Nullsec filled in the volume losses associated with lower High sec supplies. The goons economic team plans these things --- they just don't happen spontaneously.

      Delete
  2. As the game gets richer and otherwise more mature, the economy gets harder to manipulate. We may be breeding smarter Goon leaders.

    ReplyDelete
  3. wasnt the last interdiction prebarge changes and they were all stupid easy to gank?

    ReplyDelete

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