Did the MBS corner the market on trade?

"First among equals", yeah, that works for Manticore and banking/finance.

Now we have to see what the near and long term consequences for Manticore are on Lacoon I & II.
I mean that in the broadest possible terms.
We do NOT see at the end of UH any mention (though it may show up in the next main line book) of Manticore position on the necessity of both based on the actions of the League including clearly unlawful activites in Opperation Buccaneer.

While Manticore regrets the disruptions of business and the economic losses suffered by ALL parties due to the Lacoon implementations, it's position is that the state of undeclared war forced upon the SEM by the activities and action of the "Mandarins", thier ministries and the SLN negates and renders invalid the penalties clauses in in the commercial contracts for Manticorian flagged vessels. Manticore can probably point to (since RFC clearly would have seen this comming) the transhipment of cargos which were unable to be delvered -by MMM flagged vesseles- and transported to SEM space with the recall of it's merchant shipping, to bonded warehouse facilities at the Junction or similar location pending the ability of the owners of the goods to retrieve them or make arrangement though acceptable (to SEM) vessels to take posession of them with the proper paperwork. Might even set a date for such items must be recovered by the owners or thier agents/freighting companies after which the full cost of warehousement and handing plus penalties will be assessed. Ah, intersteller commerce.

Somewhere in the small print of any SEM position paper on this would be the suggestion that any claims in reguard to the missing of deadlines or non-delivery of cargo etc be addressed to the SL Bureaucracy responsible for the administration of these items for payment at the SL's cost.

That is all going to be an unholy mess but it will get sorted. Perhaps someone could suggest that any fines and penalties arising out of Lacoon would be incorporated into a "temporaty tarrif adjustment to Junction fees for SL (or other Star Nations who decided to pursue the matter) flagged shipping.

Too much analysis?

Brigade XO wrote:"First among equals", yeah, that works for Manticore and banking/finance.

Now we have to see what the near and long term consequences for Manticore are on Lacoon I & II.
I mean that in the broadest possible terms.
We do NOT see at the end of UH any mention (though it may show up in the next main line book) of Manticore position on the necessity of both based on the actions of the League including clearly unlawful activites in Opperation Buccaneer.

While Manticore regrets the disruptions of business and the economic losses suffered by ALL parties due to the Lacoon implementations, it's position is that the state of undeclared war forced upon the SEM by the activities and action of the "Mandarins", thier ministries and the SLN negates and renders invalid the penalties clauses in in the commercial contracts for Manticorian flagged vessels. Manticore can probably point to (since RFC clearly would have seen this comming) the transhipment of cargos which were unable to be delvered -by MMM flagged vesseles- and transported to SEM space with the recall of it's merchant shipping, to bonded warehouse facilities at the Junction or similar location pending the ability of the owners of the goods to retrieve them or make arrangement though acceptable (to SEM) vessels to take posession of them with the proper paperwork. Might even set a date for such items must be recovered by the owners or thier agents/freighting companies after which the full cost of warehousement and handing plus penalties will be assessed. Ah, intersteller commerce.

Somewhere in the small print of any SEM position paper on this would be the suggestion that any claims in reguard to the missing of deadlines or non-delivery of cargo etc be addressed to the SL Bureaucracy responsible for the administration of these items for payment at the SL's cost.

That is all going to be an unholy mess but it will get sorted. Perhaps someone could suggest that any fines and penalties arising out of Lacoon would be incorporated into a "temporaty tarrif adjustment to Junction fees for SL (or other Star Nations who decided to pursue the matter) flagged shipping.

Too much analysis?

Ironically, David mentioned some time back, that the Manticorian Interstellar Maritime courts are considered the agreed interstellar authorities on all things maritime.

Theemile wrote:Ironically, David mentioned some time back, that the Manticorian Interstellar Maritime courts are considered the agreed interstellar authorities on all things maritime.

If this is the case then it would be the FIRST Time in human history.

Maritime law is whatever the most powerful navy says it is.

Manticore is NOT the most powerful navy. There is no way in this galaxy, they set maritime law.

Now I could EASILY argue that their jurisprudence is the highest regarded around the HV. Where everyone tries to get their court cases filed, moved, adjudicated, etc due to RULE of LAW and a little thing called JUSTICE.

But setting Maritime law? No. That is the realm of the SL. Just as the Cherwell convention was created by and signed by the SL, but do not enforce it(obviously). Manticore does.

Brigade XO wrote:I disagree about the major financial center of the SL and the rest of human space being on Manticore.

At the very least, the Mandarins would have been really worried about the SL Government's situation of the heart of the human financial markets was on Manticore.

The explanation is actually simpler.

Before the Telegraph and even with the Telegraph, and up to the age of the internet, every CITY had its own financial market due to information lag being an impossible hurdle.

When was the last time anyone talked about the financial markets in Chicago, or Paris? We used to do so as little as 30 years ago. They do not because in the age of a telegraph/phone, and exceptionally due to internet and the fact these inventions were all created while a single world power and its Children ran the world, everyone forgets the markets actually used to run on a regional basis at best before these inventions. Ottomans were rich because money flowed through them, but at no period were they a financial market, for anything or anyone outside of their territory.

Phones/internet have in effect turn a world of entirely separate nations and dumped everyone into a single city with different buroughs and local toughs

Today we think it is normal for Zimbabwe to trade in USD in NY instead of S. African Rand or their own currency. This is ONLY possible due to very fast up-to-date commodity trading on the NYSE half a world away. Without this ability for current prices one is forced into regional networks at best with regional transaction norms/practices.

In HV, I do not see any "financial" center at all. Now centers exist to be sure, but first among equals seems more appropriate here along with a few asterisks. Semi natural hubs where communication flows fastest or who are oldest with the most built up infrastructure. SO, wormhole junctions, capitals of regions, earth of course, worlds with many daughter colonies.

The people who have had a functioning court system for over 1500 years are likely to be the people who get looked at for precedences compared to Manticore.

Financial markets, currancies and bills of exchange/letters of credit.

Way back in the 70's and 80's I could write letters of credit (well have them written at the main office but they were my lending responsibility) for international use and my signature was in the "drawing book" issued by a bank to it's correspondent banks for signing Official (or Cashier's depending on how old you are) Checks. Bank in CT, correspondents in NY City, San Francisco, Chicago (and other clearinghouse cities) plus several South American countries and Canada. I diidn't have lending resposibilty with customers who were working in Europe but the branch did. Wrote a Letter of Credit for a customer to have a dozen small sailboats built in Canada -letter to pay the Canadian Company on presentation of documents (each boat) it was each was received to the shipping company at the dock in NY and loaded for transport. The manufacture's agent was to forward the documents to us for payment.
The order was being paid for by a Letter of Credit issued by an Argentine Bank for Argintine Naval Academy for the the training boats, and the documentation for for payment was another set of documents from NY with copies of the bills of lading for (each) boat being loaded for transport on the shipping vessle. We would get those documents and forward them to the bank in Argentina for payment to our customer.

The Letter of Credit from Argintina was payable in US Dollars and the Letter to the company in Canada was payable in Canadian Dollars. If memory servers, the sailboats were shipped two at a time (seperate crates/containers for each) that had to clear Customs comming into the US and at Export as well as inclear in Argentina. That summer we were going to be spending some time in Canada and I made arragements to see the boat buiding company I had been dealing with.

In general I suspect that each inhabited system will have at least one local bank though the soundness of each will be a different discussion based on local legal and political systems etc. Places like Manticore and Beowulf will have muitiple banks which are headquatered local and often branches (regional/sector/whatever depending on volumes) of major banking and financial houses plus banks and financial houses from other systems will have correspondent relationships with local banks.

Same thing goes for places like Lloyd's of London for insurance (and finance), Goldman Sachs, etc.

You knit the systems together with communications, standard practices and commercial relationships. And auditors......always auditors. The Bank's, the local System Banking Ministry or Department/ 3rd party auditors like Arthur Anderson. Checks and blanaces.

And then you watch everybody like a hawk....

cthia wrote:

Theemile wrote:A good % of the galaxy's large Financial Markets are on Manticore in Landing for this very reason. Since it is the center of information it makes sense for the markets to be colocated. So Manticore has no advantage over anyone else - they have trading reps on Manticore as well.

Not only are the large Financial Markets colocated on Manticore, they are also colocated at the MWJ, per HoS. Why is that? Why would banks which surely have branches located ON Manticore, also have branches situated at the junction? I would imagine to help alleviate the same concerns I list.

But, many other questions and concerns arise, being familiar with the trading of stocks and commodities. I would imagine the entire Galaxy's equivalent of the NYSE is located on Manticore. Let's say in Landing. Let's also say the Galaxy's stock market and commodities reports are disseminated strictly in Landing. So far so good. Now what?

Jonathan_S wrote:Even in today's world with near instant communications not all companies choose to trade on the NYSE and there are certainly other large exchanges, for example in Japan, London, and Shanghai.

For certain. That's exactly how markets have been established since the bygone days. Every township had it's local market long before the first traveler happened through. There will always be a local market. My grandfather taught finance to everyone in the family. Everybody remembers his/her own personal lesson.

My grandfather once said to me. "When it comes to high-finance, never forget where you came from. Consider those marbles you won today. You came home with over three hundred marbles, and you only took about ten with you to "the market." At home, you would only win about one hundred marbles in the same time frame, with the same investment of ten marbles. The market is ripe for marbles, here, across town where kids from many different schools come together to play."

Local markets are active, but major markets are not local. Unless you're lucky like the kids who lived near those playgrounds. I had access to the major markets when I visited my grandfather. I always prepared myself for the exchange rate by bullying the market with my awesome skills with marbles and I cornered the market. LOL

Jonathan_S wrote:Most stocks probable get listed and do the majority of their trading on their home planet's exchange(s). There's probably some secondary trading at Manticore and elsewhere but it's likely to end up out of sync across the galaxy even with the speed information can travel through wormholes.

That's mostly by design than happenstance. Consider Hauptman Enterprises, or Skydomes of Grayson. Each of those entities would want their stock offerings kept local. You don't want tentacles getting away from you. There could also be local laws governing the international sale of certain stock. As governments, you can't have a potential enemy acquiring the one business (in your back yard) that makes him more powerful than you are. At any rate, local markets have a high turn around time. You can effect many different transactions in the same amount of time. And move more product. Generally, though not necessarily generally true. It depends on the stock. It depends on the market. It depends on the savvy of companies operating by proxy and by shell.

There are always special cases. Like Skydomes of Grayson which is owned by Honor. Honor's primary residence is the SEM.

Jonathan_S wrote:I suspect it'll be a lot more like the way stock exchanges worked back when the fastest way to get news between the US and Europe was a week+ ship ride. They just end up much more distributed and much less tied together.

Absolutely. The exchange rate is calculated at point of sale (POS). In the old days, you could outrun your business plan.

I remember being pissed as a kid when I'd get dollars turned into foreign currency, but losing money by my departure date en route for home, and sometimes on arrival.

What many of you are missing is that the most powerful economy sets the tone of all markets. Period.

Some companies, governments, may restrict their trading to other exchanges than the NYSE or the Exchange in the MBS. But, for one, if you are buying in bulk markets beyond what can be produced in your own system, you had better be aware of the Galaxy's current prices to make the better deal, by far.

It comes down to how many of your "dollars" will I get for one of my "dollars." Because I don't want to spend my last dollar. It's easy to figure out the strongest economy by the exchange rate. What does it tell you if one of our dollars get fifty-billion of somebody else's? What does it tell you if one of our dollars is less than one of theirs? The dollar is worth less than the Euro, pound and franc. You should expect it to be worth less than the dinar.

WIKI


Currency

A currency was a unit of exchange, facilitating the transfer of goods and/or services. As one of the central means of all economy, various currencies were used in the human-settled universe of the Post Diaspora era.

Exchange rate
7,500,000 Manticoran dollar = 10,000,000 Grayson austin

7,500,000 / 10,000,000 = 0.75
10,000,000 / 7,500,000 = 1.34

15,000,000 - 20,000,000 Manticoran dollar = 60,000,000 - 70,000,000 Solarian credit

15,000,000 / 60,000,000 = 0.25
15,000,000 / 70,000,000 = 0.214
20,000,000 / 60,000,000 = 0.34
20,000,000 / 70,000,000 = 0.286
60,000,000 / 15,000,000 = 4
60,000,000 / 20,000,000 = 3
70,000,000 / 15,000,000 = 4.67
70,000,000 / 20,000,000 = 3.5

Known currencies
Casca System: Cascan sol
Diaspora of Man: Credit chip
Earth: EuroDollar
Protectorate of Grayson: Grayson austin
Republic of Haven: Havenite credit, Havenite franc
Solarian League: Solarian credit
Star Empire of Manticore: Manticoran dollar
Star Kingdom of Manticore: Manticoran dollar
Talbott Quadrant: Rembrand Stellar, Manticoran dollar

References

Jonathan_S wrote:As for your later example of frozen concentrated orange juice it wouldn't just be primarily from one state within the US that dominates the market. There would be dozens and dozen of overlapping markets as different planets end up producing exportable excess of FCOJ. But even as cheap as interstellar shipping is in the Honorverse a load of FCOJ from your own planet has to be cheaper than one from the next system over, which in turn is cheaper than one shipped hundreds or thousands of lightyears. So I simply can't see a unified global market in FCOJ.

The failure of one market can grossly affect the other.

You are ignoring the human element. FCOJ may command a much higher demand for some other reason other than price. Perhaps it's just like I said "Simply the best FCOJ in the galaxy." For whatever reason. Perhaps OJ grows naturally sweeter on this planet and perhaps even at a much faster rate. Maybe it has a natural ingredient that increases it's shelf life.

It's obvious with other products too. Consider celery. Isn't there a celery grown from certain planets more palatable to the cats? Per Manticore, their celery market will be different.

Consider milk. A cow mutation began producing two types of milk.

1. Casein 1.
2. Casein 2.

One is better than the other. Consider how the market flutters when that sort of announcement is made.

Jonathan_S wrote:Still Manticore is a great place for a financial clearing house, even if it's not necessarily the best place to trade every stock in the universe, because than's to its wormhole network its got the quickest transit times between most average points in the inhabited galaxy. So it's a good place for banks to meet up to, for example, settle up currency exchanges if they end up with a surplus (or shortage) of a given other banks local currency. And yes, if you're interested in stocks from all over the known galaxy then it's the place where the average information lag is lowest. But if you're really interested in stocks from a givne world you'd still be much better off giving investing instructions to a local agent at that world who will have access to the local information affecting local trading of that stock without the weeks long delay for it to get to Manticore.

The MBS is a place for making lots of money. It is a place I can turn my ten marbles into three hundred, instead of having to operate with safer margins on a much smaller playing field, whereas the bottom line would not have exceeded 175 marbles.

You have to have local banks. Banks are referees. It is their job to stay abreast of exchange rates. But, can we always get the best deal from a particular bank? Certain banks may not even be able to underwrite or handle certain deals. Some banks may actually be operating above margin. Making it more dangerous.

Jonathan_S wrote:(Though like back before underseas telegraph cables got laid on Earth you've got the chance, if the local market swing is large enough, to try to beat news of that to a foreign exchange so you can buy up, or sell off, the stock before everyone else learns of whatever news triggered the major price movement. (Of course it's got to be a pretty big swing to be worth the time and expense of attempting that maneuver; and even if you are the first to arrive the pricing on that other exchange may have been way out of whack from what you expected because of some local knowledge or believe there that you weren't aware of. So the gamble might not pay off)

The swing doesn't have to be large at all. It can be mere pennies on a product multiplied by a thousand freighter loads. Even a big swing instead of a really big swing would still be better.

What "first among equals" means to me is that the MBS is the gold standard. Everyone defers to its quotes. Making it the preferred market because earnings potentials are much higher.

As a large polity, you can't afford not to play in the MBS. The profit potential is much higher. The savings potential is much higher. When Haven was having trouble feeding it's people, it would have been irresponsible for them to ignore trading in the MBS.

The MA is in a position to capitalize on certain markets too, because of their streak drive.

I wonder if operations at the MWJ is carried out fairly. I'm certain the SEMs banks have the best real estate closer to the junction, right off bat. They will consistently be at the top of the queue for transit. But I'm certain, as far as DBs waiting for transit when an invasion comes calling, a tie goes to the SKs DB first.

Also, many big deals are carried out as a result of "tips." Somebody gives someone a bit of inside information.

I would imagine a lot of tips were shared in confidence when Honor set out to tackle the Sol system. Sol's currency and stock was going to drop considerably. The same, right before Lacoon. I wonder if the MA made appropriate business decisions knowing what it was about to do to Manticoran infrastructure.

The MBS is in a position to weaponize it's currency and trade policies. Just like a certain Chinese government. China is preparing to weaponize its dominance in rare-earth metals.

It is worth noting that the information advantage starts to fade as you head away from the junctions. The junctions allow you to connect some distant places and make them players, but that doesn’t make them faster than the brokerage next door.

Say you want to get an inside run on a deal, but need to know the local conditions for ...let’s call it coffee. If the system goes 10 light years -> junction -> 10 light years, you still have an information disadvantage against a bank three light years away. You have an advantage against someone who is 50 LY away (all lanes being equal), but not the local offices so to speak.

Which means you don’t actually have an information advantage over the entire universe in terms of knowin what the coffee crop looks like, you have a few bubbles of specific informational advantage near the junction ends. As you go further and further away, your advantage comes apart.

It’s a entirely possible the routing gets info from Sol to certain parts of the former SL faster than Manticore to the same spot.

Indeed, a big central competitor would be ill placed to handle local opportunities, and those with the resources would be well advised to develop local brokerages and branches instead. There does of course come the matter of capital pools, but fortunately we’re talking about Star faring worlds/Corps/nations - there’s capital to be had.

The same would also apply for shipping, which we routinely ignore.

——

As an aside to the above - really? The manties make their vast empire run on shipping industry fees?It does make you wonder why Denmark doesn’t take Maersk and turn it self into a European great power.

GloriousRuse wrote:As an aside to the above - really? The manties make their vast empire run on shipping industry fees?It does make you wonder why Denmark doesn’t take Maersk and turn it self into a European great power.

What is the #1 expense of shipping?
A ship.
Prior to steel, wood sufficed. USA led world in shipping due to availability of TREES
Who had steel first? UK. Who led shipping industry at beginning of mass production of steel, steam? UK initially until USA surpassed UK in steel production as well as being a fairly large exporter for its time.

WWII happened... All shipping was sunk everywhere in the world other than the USA and UK, but here is where a giant wierd spot happened. USA essentially gave away its Liberty Ships to foreign players and did not allow domestic shippers to buy them. 2) USA still has the idiotic Jones act. And finally the industrial world was either destroyed, rebuilding, except the USA who had MUCH higher wages than everyone else. To rebuild themselves Japan massively subsidized their steel industry followed by Taiwan, S. Korea, and now China. Part and parcel of this MASSIVE subsidy is dirt cheap steel for building ships. Ships are currently built BELOW cost.

So, MAERSK, #1 cost is being supplied at BELOW cost which means its competition is ALSO being supplied at BELOW cost which means margins, such as there are, essentially do not exist to get FAT and prosperous on.

Eventually, Steel will stop being massively subsidized and the world will return to normal. This will once again make ship building expertise valuable along with location and logistics.

Now add the VERY weird fact that everyone can trade with everyone today which is ALSO not normal without naval vessels close by. So, those protection fees, also known as Tariffs do not really exist. Honorverse this is also true except on the fringes. Guess WHO dominates the fringes? Manticore, who also is collecting those HIGHER fees for shipment etc because it is MORE dangerous. The ol' Manticoran navy also patrols those more dangerous lanes so their own shipping will get a response whereas everyone else? Hrmm yea, maybe. Then Manticoran trading houses can lean on locals in the Verge to work with them as everyone knows their goods have a far higher chance of making it to the other end even though it might cost a bit more or equal to everyone else because ADD faster shipment time and lower fees in the MWHJ and bingo. Manticore has a MARGIN far higher than everyone else whereas MAERSK does not.