(BFM Bourse) – If some investors were unpleasantly surprised by the drop in the interest rate of the Nook bank at the end of March (from 0.5% to 0.05%), most players bet instead on trading turnips to make a fortune … Plunged into the heart of a cute, but capitalist universe, which in many ways recalls the world of traders.
In the latest installment “New Horizon” of the successful video game series Animal Crossing, savers at Nook bank were unpleasantly surprised to see the main interest rate drop sharply from 0.5% to 0.05% on April 23. Warned by mail from banker Tom Nook – a raccoon described as “greedy” by the community, recently promoted to “Nook’s Home” after being manager of the local store and selling a house to each player at the start of the game – the evening before, some players accuse the blow.
“I feel betrayed,” admits a surfer on Twitter. “My girlfriend and I have just learned bad news. The bank lowers the interest rate on our savings without our consent. I find it shameful to take advantage of the current situation and do not recommend Nook Bank.” “A gang of crooks” adds a longtime player. Others, again, question the economic reasons behind the rate cut and denounce the “capitalist instinct” of the financier and his monopolistic position on the imaginary island.
More than the rate cut, Tom Nook’s proposal to compensate savers with a carpet embroidered with bells – local currency – goes wrong. “This is the icing on the cake. We are being robbed and we are offered a bells rug, what a cheek,” protested a Reddit user.
Parallel to the real economy
In a tongue-in-cheek article, the Financial times draws an analogy between the policies of Nook Bank and the major global financial institutions. Bank Nook’s rate cut shock would reflect the efforts of monetary authorities around the world to mitigate the effects of the coronavirus by reducing rates and lowering long-term borrowing costs through large purchase programs of obligations. The IMF estimates the total amount of stimulus packages announced worldwide in recent weeks, between the programs of central and government banks, at $ 14 trillion.
This unwavering support from financial institutions has allowed global markets to rebound since mid-March. “We thought this detente was temporary, but we have clearly crossed the Rubicon and it is now permanent,” said Albert Edwards, strategist at the Societe Generale, questioned by the FT. “Now that the Nook bank has lowered its rates to almost zero, the next step will logically be” quantitative easing “. It is essential that players try to connect their game to their printer, because it could start to produce money, “he jokes.
“The Turnip Exchange is the Wild West”
If the voluntarily expansionary policy of Nook bank, imposed by a compulsory software update on April 23, could destabilize some players, the vast majority of them (already) did not bet on the low monthly interest rate proposed by Tom Nook to grow their savings, says an informed user. “What can pay off is turnip trading, but it’s the Wild West,” he warns.
How is this market organized where we can “double, triple or even quintuple its initial stake”, and thus quickly repay the loans contracted with Tom Nook? Every Sunday morning, the traveling saleswoman Porcelette (a female wild boar) comes to visit you on your island and offers her turnips, at an always different price (and which also varies according to the players). The turnip price is then updated according to a double fixing (at 12 noon and midnight) and the player can decide, or not, to resell these turnips to raccoons Méli and Mélo. Who are none other than Tom Nook’s nephews and store managers.
As a result, as long as the player has a certain appetite for risk, the temptation is great to wait for the best time to resell these turnips at the best price. Except that the turnip being a perishable commodity, the player has a week to resell his precious vegetables, before they rot and constitute a deadweight loss. This parallel world which wants to be enchanting and benevolent therefore becomes a benchmark for investors and arbitrageurs of all kinds.
Especially since, additional complexity, the player can decide to resell his turnips in the shop of his island, or another island – since he has the ability to visit all the villages – to take advantage of the local turnip course.
Predicting turnip prices
In an attempt to minimize their losses, players have developed decision support tools, often in the form of algorithms capable of predicting the course of the turnip.
As indicated The world in an article in its Pixels section, a Mexican developer discovered the data compiled by another player (Ninji) “who had unearthed the mathematical formulas at work behind the fluctuations in the price of turnips” and decided to launch a collaborative site (Turnip Calculator) where players follow the course of the precious root vegetable.
Other initiatives have followed and players around the world are now exchanging their “dodo codes” (updated each time a player turns on their Nintendo Switch and which allow them to travel from island to island) on networks social and other forums. If some users just ask a commission on the gain made by the player who was able to access his island and negotiate his turnip at a better price, others go as far as charging an entry fee.
In this regard, the site “Turnip Exchange” is in a way “LeBonCoin de la tulipe”. Players can place classified ads to sell and buy the vegetable, setting their conditions for them to access their island. Recently, the trend has been soaring entrance fees. “I am hallucinated by the explosion in prices for the sale of turnips on the Turnip Exchange, some hosts are asking for 500,000 bells,” said a player on Reddit. “At the same time, you are going to an island with 600 bells the turnip, you can earn about 2 million bells (a player can buy several thousand turnips each Sunday, note) so it does not shock me that you asks 500,000 “another responds. In short, the lure of gain has no border, even if it would be digital
Quentin Soubranne – © 2020 BFM Bourse
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