Lacöon I

SYED wrote:If the league is shut out of hte wormhole network, will the independant shippers and minor space nations be attempting to get deals done with the alliance so at least their shipping gets to go through.
Manticore is famous for their trading fleet, they must have alsorts of commercial contacts, they can use that to help.

THe more the mess wit hte league economy, the more pressure will be placed on the league to take action, which will push the league to breaking.

That trading fleet no longer has access to the SL market. The independent shippers you're talking about (the ones in SL with actual ships) are likely making a killing now since they are the only ones, with the trans-stellars that can move cargo. The commercial contacts you're talking about are p[robably very pissed off at the Manties atm. Remember that -alla- Manty shipping, corporate and independent, was pulled out without a moment's notice. They corps and independents broke all of their contracts when they were forced to leave. There's also no real way for them to contact their corporate agents in SL space. Remember that right now the Manticore merchant marine is literally unable to ship -anything- in or out of SL space without being in violation of the SEM and RMN. So I don't think your suggestion can work. Unless the SEM/RMN allow it. I'm not sure what good it would do anyways since the Manty merchant ships still can't go to SL space to transport anything, and if they did, the SL would have a perfectly legal reason to go after said shipping when there's a state of war between the SL and GA. And I don't think the SEM would be as foolish as to allow Manty merchant ships to resume transporting in SL space until after there is a resolution to the current crisis one way or another.

Yes, Lacoon I involved the removal of Manticoran merchant ships from Solarian space; this was primarily to protect those merchant ships from Solarian retaliation and only secondarily to hurt the Solarian economy. Lacoon II involved closing the wormholes to Solarian ships. It did not close the wormholes to other ships.

There are plenty of third-party ships still transiting the spaceways in and out of the League, including financial brokers. The Solarian League cannot control who those brokers deal with, and Manticore does not care if Manticoran merchants buy or sell bonds to third-party brokers. If Solarian financiers consider Manticoran bonds to be worthless, they will be desperate to sell them to third parties willing to buy them. And lots of those third parties will be perfectly willing to buy and sell Manticoran bonds.

The galaxy is not just the Solarian League and Manticore, as much as it seems that way sometimes. There are thousands of other systems out there.

What third party shipping? The only merchant ships that would be using it now would have been Solly ships since the Manty merchant ships were pulled. Any Haven or Andermani ships have likely been put on the forbidden list on SL worlds (until the SL starts breaking apart), so I don't see anything but RMN/GA military ships or the news/dispatch boats being allowed through the wormholes. It would be suicide to be sending any GA ships through and I'm not aware of any other stellar power that has a large enough merchant marine to offset even a small fraction of the shipping now needed that isn't home ported in the SL, and even the SL shipping companies that have ships are woefully short handed since so much of the League's transportation needs were met by the SEM merchant marine.

Everything I've heard of in the series points that of the human explored galaxy, for a long time there was only the SL and a lot of periphery systems. The Republic of Haven was the biggest stellar entity outside of the SL and it's a small fraction of the SL's size (and at the time of the first books, the SL's military power). Manticore was a one system nation and only its wormholes allowed it to be anything but a minor powerhouse in the local area. The Andermani Empire and Silesia Confederacy were larger than the SKM/SEM.

Are there thousands of other settled systems? Yes, but militarily, economically or industrially those systems aren't worth spit (so to speak). They aren't able to project anything beyond their own system and are all more or less considered very weak.

For 800 years or so the only superpower in the human settled galaxy was the SL. No one else even came close. That is obviously changing, but right now aside from the GA nations, there isn't any third party shipping that can come close to picking up the slack in the SLs shipping needs.

SWM wrote: Whoever secretly owned such a drive would be able to manipulate the markets with foreknowledge, and every shift in the markets would be subject to speculation that someone knew something. The market would become unstable.

Hmm, I can't think who might like this...

SWM wrote:Hauptmann would not necessarily have to leave Manticoran space to buy bonds. These kinds of interstellar transactions are carried out all the time through brokers. Courier boats carrying interstellar financial transactions have not been halted. The financial market is still running--and Manticore has long been a central node for the interstellar financial market. A Manticoran merchant does not have to travel across the galaxy to buy stocks and bonds. There is a thriving market on Manticore itself in such financial instruments, buying and selling interests in bodies scattered across all of explored space.

I'm not at all sure how that would work. There is no roughly similar real-world model to use. If you wanted to buy 4 million pounds worth French bonds in 1750 you went to Paris or you dispatched an agent to Paris with shipload of gold. There is nobody to sell you four million pounds worth of bonds in Boston or Tokyo. You wanting to buy them doesn't cause someone to show up at your door with them tomorrow, though maybe you'll get an agent from the French crown in a few months, or at least someone claiming to be from the French crown...

This assumes someone has money with which to buy them, which I find highly unlikely. Remember the end of 2008? How about late 1929? That's Manticore post OB.

kzt wrote:

SWM wrote:Hauptmann would not necessarily have to leave Manticoran space to buy bonds. These kinds of interstellar transactions are carried out all the time through brokers. Courier boats carrying interstellar financial transactions have not been halted. The financial market is still running--and Manticore has long been a central node for the interstellar financial market. A Manticoran merchant does not have to travel across the galaxy to buy stocks and bonds. There is a thriving market on Manticore itself in such financial instruments, buying and selling interests in bodies scattered across all of explored space.

I'm not at all sure how that would work. There is no roughly similar real-world model to use. If you wanted to buy 4 million pounds worth French bonds in 1750 you went to Paris or you dispatched an agent to Paris with shipload of gold. There is nobody to sell you four million pounds worth of bonds in Boston or Tokyo. You wanting to buy them doesn't cause someone to show up at your door with them tomorrow, though maybe you'll get an agent from the French crown in a few months, or at least someone claiming to be from the French crown...

This assumes someone has money with which to buy them, which I find highly unlikely. Remember the end of 2008? How about late 1929? That's Manticore post OB.

That's not how the Honorverse financial markets work. There are regional centers where financial instruments are traded, and Manticore is by far the largest. See: http://infodump.thefifthimperium.com/en ... gton/236/1.

Zakharra wrote:

Yes, Lacoon I involved the removal of Manticoran merchant ships from Solarian space; this was primarily to protect those merchant ships from Solarian retaliation and only secondarily to hurt the Solarian economy. Lacoon II involved closing the wormholes to Solarian ships. It did not close the wormholes to other ships.

There are plenty of third-party ships still transiting the spaceways in and out of the League, including financial brokers. The Solarian League cannot control who those brokers deal with, and Manticore does not care if Manticoran merchants buy or sell bonds to third-party brokers. If Solarian financiers consider Manticoran bonds to be worthless, they will be desperate to sell them to third parties willing to buy them. And lots of those third parties will be perfectly willing to buy and sell Manticoran bonds.

The galaxy is not just the Solarian League and Manticore, as much as it seems that way sometimes. There are thousands of other systems out there.

What third party shipping? The only merchant ships that would be using it now would have been Solly ships since the Manty merchant ships were pulled. Any Haven or Andermani ships have likely been put on the forbidden list on SL worlds (until the SL starts breaking apart), so I don't see anything but RMN/GA military ships or the news/dispatch boats being allowed through the wormholes. It would be suicide to be sending any GA ships through and I'm not aware of any other stellar power that has a large enough merchant marine to offset even a small fraction of the shipping now needed that isn't home ported in the SL, and even the SL shipping companies that have ships are woefully short handed since so much of the League's transportation needs were met by the SEM merchant marine.

Yes, Manticore dominates the physical shipping. But I'm not talking about physical shipping. I'm talking about the financial markets, which are served by dispatch boats, not major trading vessels.

See http://infodump.thefifthimperium.com/en ... gton/236/1.

There are plenty of systems involved in trading financial instruments. The financial market has been broken up into regional centers. Manticore is by far the largest such center, but there are numerous other centers. Notably, the League is NOT a dominating force in the financial markets. That means that there are regional centers scattered around the galaxy, buying and trading stocks, bonds, and futures. Many systems are involved in this financial trade. It is not just Manticore and the Solarian League. And those third parties are still doing financial trading with both the League and Manticore.

SWM wrote:

Zakharra wrote: What third party shipping? The only merchant ships that would be using it now would have been Solly ships since the Manty merchant ships were pulled. Any Haven or Andermani ships have likely been put on the forbidden list on SL worlds (until the SL starts breaking apart), so I don't see anything but RMN/GA military ships or the news/dispatch boats being allowed through the wormholes. It would be suicide to be sending any GA ships through and I'm not aware of any other stellar power that has a large enough merchant marine to offset even a small fraction of the shipping now needed that isn't home ported in the SL, and even the SL shipping companies that have ships are woefully short handed since so much of the League's transportation needs were met by the SEM merchant marine.

Yes, Manticore dominates the physical shipping. But I'm not talking about physical shipping. I'm talking about the financial markets, which are served by dispatch boats, not major trading vessels.

See http://infodump.thefifthimperium.com/en ... gton/236/1.

There are plenty of systems involved in trading financial instruments. The financial market has been broken up into regional centers. Manticore is by far the largest such center, but there are numerous other centers. Notably, the League is NOT a dominating force in the financial markets. That means that there are regional centers scattered around the galaxy, buying and trading stocks, bonds, and futures. Many systems are involved in this financial trade. It is not just Manticore and the Solarian League. And those third parties are still doing financial trading with both the League and Manticore.

I know all of that. But you;re making the assumption that the financial markets are still connected. When the conflict between the SL and SEM broke out and Lacoon 1 and 2 happened,d one of the things that would have happened is those markets would be severed. That's my assumption at least. 'At all Costs' states that the SEM no longer has access to the SL market. That suggests to me that not only is the SEM not shipping anything on Manty hulls (why are they called bottoms?), but that they are also cut off from accessing the financial markets of the SL too. It stands to reason you do not let enemies you're in a shooting war with, have access to your financial markets. Either way the book states that the SEM is not doing merchant stuff in SL space anymore; it's the main reason the SEM economy is going to be hammered; no influx of cash anymore. The SL economy is getting even more hammered for several reasons; mainly a lack of hulls to haul goods in (a lack they can make up in time by building their own ships. Ship building is likely experiencing a massive boom right now), and secondary a lack of access to markets outside SL space. Losing access to the wormholes is hurting too. But Manticore is going to stand to gain in markets in the Republic of Haven, and the GA as a whole will be equal to the economic power of the SL as it stands now. ie doesn't get its act together and do something.

So that being said, the SL leadership knows its screwed. The SLN leadership knows its screwed. Do you seriously think that the financial corps and ministries would be allowing the SEM or the GA as a whole, or any proxies (third party groups), have access to the SLs financial data so they can screw with the SL finances even more? I think not. I think the SL people are smart enough to have cut ties and make sure they stay cut with Manticore until the situation is resolved. And I also think that the SL, assuming it survives and any of the successor states if it doesn't, will take steps to try and make sure that the SEM never again has that much influence in their economy. They will want to make sure that they control their destinies, not a system not even in their own polity and can be clear across League space.

Zakharra wrote:
What third party shipping? The only merchant ships that would be using it now would have been Solly ships since the Manty merchant ships were pulled. Any Haven or Andermani ships have likely been put on the forbidden list on SL worlds (until the SL starts breaking apart), so I don't see anything but RMN/GA military ships or the news/dispatch boats being allowed through the wormholes. It would be suicide to be sending any GA ships through and I'm not aware of any other stellar power that has a large enough merchant marine to offset even a small fraction of the shipping now needed that isn't home ported in the SL, and even the SL shipping companies that have ships are woefully short handed since so much of the League's transportation needs were met by the SEM merchant marine.

Everything I've heard of in the series points that of the human explored galaxy, for a long time there was only the SL and a lot of periphery systems. The Republic of Haven was the biggest stellar entity outside of the SL and it's a small fraction of the SL's size (and at the time of the first books, the SL's military power). Manticore was a one system nation and only its wormholes allowed it to be anything but a minor powerhouse in the local area. The Andermani Empire and Silesia Confederacy were larger than the SKM/SEM.

There are probably still some small independant shipping firms.

It seems to me that the most economically advantagious way for them to operate (assuming Manticore lets them get away with it) to to operate as a short haul service that acts as a firebreak between GA shipping and SL shipping. Basically placing orders and picking up shipments at GA wormhole termini (where it was brought by GA, mostly Mantie ships) and taking it to the nearest cargo station outside of Mantie controlled space where it could be resold and carried on to its real destination on SL registered ships.

Just by acting as neutral shipping to move goods between the Mantie controlled areas centered on their wormhole networks and the wider SL controlled areas they can keep a pretty high turnover rate and not tie up their limited number of hulls in months long trips to the cargo's final destination. (Let the more numerous SL flagged freighters do that, just make your money on the part of the delivery the can't do)

Is that enough to replace the previous shipping setup, no. But it'll be something, and with the increased amount you can charge for it should be lucrative.

Zakharra wrote:

SWM wrote:Yes, Manticore dominates the physical shipping. But I'm not talking about physical shipping. I'm talking about the financial markets, which are served by dispatch boats, not major trading vessels.

See http://infodump.thefifthimperium.com/en ... gton/236/1.

There are plenty of systems involved in trading financial instruments. The financial market has been broken up into regional centers. Manticore is by far the largest such center, but there are numerous other centers. Notably, the League is NOT a dominating force in the financial markets. That means that there are regional centers scattered around the galaxy, buying and trading stocks, bonds, and futures. Many systems are involved in this financial trade. It is not just Manticore and the Solarian League. And those third parties are still doing financial trading with both the League and Manticore.

I know all of that. But you;re making the assumption that the financial markets are still connected. When the conflict between the SL and SEM broke out and Lacoon 1 and 2 happened,d one of the things that would have happened is those markets would be severed. That's my assumption at least. 'At all Costs' states that the SEM no longer has access to the SL market. That suggests to me that not only is the SEM not shipping anything on Manty hulls (why are they called bottoms?), but that they are also cut off from accessing the financial markets of the SL too. It stands to reason you do not let enemies you're in a shooting war with, have access to your financial markets. Either way the book states that the SEM is not doing merchant stuff in SL space anymore; it's the main reason the SEM economy is going to be hammered; no influx of cash anymore. The SL economy is getting even more hammered for several reasons; mainly a lack of hulls to haul goods in (a lack they can make up in time by building their own ships. Ship building is likely experiencing a massive boom right now), and secondary a lack of access to markets outside SL space. Losing access to the wormholes is hurting too. But Manticore is going to stand to gain in markets in the Republic of Haven, and the GA as a whole will be equal to the economic power of the SL as it stands now. ie doesn't get its act together and do something.

So that being said, the SL leadership knows its screwed. The SLN leadership knows its screwed. Do you seriously think that the financial corps and ministries would be allowing the SEM or the GA as a whole, or any proxies (third party groups), have access to the SLs financial data so they can screw with the SL finances even more? I think not. I think the SL people are smart enough to have cut ties and make sure they stay cut with Manticore until the situation is resolved. And I also think that the SL, assuming it survives and any of the successor states if it doesn't, will take steps to try and make sure that the SEM never again has that much influence in their economy. They will want to make sure that they control their destinies, not a system not even in their own polity and can be clear across League space.

I am not saying that Manticorans have access to Solarian sellers, or that Solarians have access to Manticoran sellers. I am saying that Manticorans have access to markets (in Manticore and in other third-party systems) where third parties buy and sell financial instruments, and Solarians have access to markets (in the League and in other third-party systems) where third parties buy and sell financial instruments. Those financial instruments get bought and sold all over, with specific instruments moving from one marketplace to another, one intermediary to another. Some Solarian instruments eventually end up in the Manticoran market. Some Manticoran instruments eventually end up in the Solarian market. Some Manticoran instruments owned by Solarians get sold, and move from buyer to buyer, and some of those will eventually get back to the Manticoran market. And vice versa.

The interstellar financial market has not closed. Direct connections (and especially physical trade) between Manticore and the League has been shut down. But the wormhole network is still open to third parties, and the regional financial network is still operating. Financial instruments are still moving through the galactic market--bits and bytes that travel on dispatch boats. Manticoran, Solarian, and third party financial marketers are still traveling to the third party regional marketplaces. Stocks and bonds are still being bought and sold.

You suggest that the League would shut that down? They can't. Without that market, the economy would collapse. The corporations would certainly not stand for the interstellar financial market being shut down. For that matter, the League members wouldn't stand for it being shut down. Most system governments in the League probably buy and sell bonds and treasury notes. And the League cannot control who eventually owns stocks and bonds that get sold through the regional markets, several buyers down the line.

SWM wrote:You suggest that the League would shut that down? They can't. Without that market, the economy would collapse. The corporations would certainly not stand for the interstellar financial market being shut down. For that matter, the League members wouldn't stand for it being shut down. Most system governments in the League probably buy and sell bonds and treasury notes. And the League cannot control who eventually owns stocks and bonds that get sold through the regional markets, several buyers down the line.

The US retaliates severely against banks that deal with various countries that the USG is not fond of. This results in lots problems for those banks, as losing access to the entire US market means you need to be making a whole lot of money funding the Mulahs' nuke program. So they usually don't.

SWM wrote:Yes, Manticore dominates the physical shipping. But I'm not talking about physical shipping. I'm talking about the financial markets, which are served by dispatch boats, not major trading vessels.

See http://infodump.thefifthimperium.com/en ... gton/236/1.

There are plenty of systems involved in trading financial instruments. The financial market has been broken up into regional centers. Manticore is by far the largest such center, but there are numerous other centers. Notably, the League is NOT a dominating force in the financial markets. That means that there are regional centers scattered around the galaxy, buying and trading stocks, bonds, and futures. Many systems are involved in this financial trade. It is not just Manticore and the Solarian League. And those third parties are still doing financial trading with both the League and Manticore.

Before going down this rabbit hole, it might be a good idea to review RFC's post of 2011-08-01 about the financial system (sorry, I don't have the link.) Just a tidbit...

on 2011-08-01, RFC wrote:As far as the currency itself is concerned, the argument has been made that the Solarian League, because it has no government in our sense of the word, cannot issue currency. This is in error. Or, rather, not entirely correct. The Solarian League was expressly empowered to create a currency when the Solarian Constitution was written. It does this through a network of chartered banks (one of which is the aforesaid Banco de Madrid), which was originally built around banking institutions which predated the creation of the League. Prior to the creation of the League, those banking institutions operated much as the great banking houses of Western Europe did during the Renaissance, resulting in a high degree of risk and a correspondingly high interest rate, both of which were . . . detrimental, shall we say, to the establishment of a sound interstellar economy, which was, after all, the primary reason for the creation of the Solarian League in the first place.

You can think of the individual members of the League banking network as "sector banks," if you like, since they are distributed around the League in order to facilitate transfers of data and credit. They are closely regulated by the Solarian League government (i.e., by bureaucracies like Agatá Wodoslawski's Treasury and Omosupe Quartermain's Ministry of Commerce) both in terms of banking practices and in terms of cash reserves. The cost of the regulators and inspectors is paid out of "service fees" generated as part of the banks' overhead as a very, very low percentage surcharge on all bank transactions, which also serves as the primary funding for the League Deposit Insurance Agency. When I say a very, very low percentage surcharge, that's precisely what I mean; it's so teeny as to be unnoticeable by virtually all consumers, but it's also (legally) dedicated to supporting the financial/banking system and cannot (legally) be used for any other purpose since it does not (legally) go into the League Treasury's General Fund. (You did notice that I said "legally," I trust?) As part and parcel of the regulatory process, the Treasury regulates the exchange rate between Solarian and other currencies, although the actual value of the Solarian credit is, of course, determined by the currency-trading market. Each bank's credits are issued by that bank and backed by that bank's total reserves and deposits, and the League regulatory agencies with bank oversight are required to ensure that no bank issues a total number of credits in excess of its reserves and deposits. In the event that a bank should experience a failure anyway — as the result of a short-term run or for some other reason — the LDIA steps in to insure deposits and also to ensure that any legally issued credits of that institution will be honored. Obviously, the LDIA is legally required to maintain a fund which is huge in absolute terms although it is proportionately quite small in comparison to the overall League economy.

And then at the end, there's this:

RFC also wrote:Manticore, because of its strategic location in the transportation system, is an obvious financial hub, and the majority of the League's sector banks have/had local offices in the Star Kingdom. Several of the local branch managers have strongly advised their superiors "back home" to convince the League government to back off on confrontation with the Star Empire, but most of their warnings have been couched in terms of the damage Manticore could inflict on the League's financial institutions rather than on an appreciation of the Manties' war-fighting technology. As such, they were initially disregarded by bureaucrats who thought they could rely upon the Invincible Solarian League Navy to enforce a military solution in their favor. Wodoslawski and Quartermain were far more sensitive to the bankers' warnings, and have a far better appreciation of the potential damage the SEM could inflict upon the League's economy. Nonetheless, even they have failed to appreciate the threat Manticore poses to the League's fundamental financial structure. No one in the League has the least experience dealing with an opposing star nation which is actually in a position to seriously damage the League's economy, and the notional value of the League's currency depends on the stupendous, monolithic strength of its economy. If that economy tanks, one can expect the League's currency to tank, as well, and no one in the entire galaxy has any clear notion of what would/might happen if the League's interstellar economy essentially collapses.

On the other hand, there might be one or two economists in the Mesa System who could have been considering possible ramifications in this direction for, oh, the last few years or so.

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