There is no market crash, and you're not economists. Ha ha edition.

[{ Filet }]

Edit: And hats are back to 100% of what they were worth last night.
GG, team envy.

Wonder what they'll do to the non-tradeable hats. I hope they make the effects client-side, that would let the brainlets at least live the dream.



https://steamcommunity.com/sharedfiles/filedetails/?id=894902944


This is a long post. Deal with it. It is written in reference to this article here:
https://www.rockpapershotgun.com/2019/07/26/team-fortress-2-unusual-item-market-crashes/
/context

I don't want to sound mean, but articles like that written by 'rock paper shotgun' are stupid and uneducated. Yes, it's bad for the short-term TF2 economy that Volvo was negligent enough to let some backwater intern press the 'update' button with a brand new exploit, but this as a 'market crash' simply not reflected in the bare facts.

Serious unusual traders are not 'panicking'. I am technically an unusuals trader. I got unusuals for my wife and sister. My kid sister texted me this morning to tell me “the TF2 economy is dead”.
This sentiment rolled off me like a hacky-sack, because it's something false I have been told time and time again. And this time is no exception. If you even try to look up 'TF2 Market Crash', you're going to find posts and articles from basically every single point of the game's lifespan, and they're all wrong.

Why articles and assessments like RPS are wrong :

Not to make 'journalist' Alice O'Conner look stupid or ill-informed, but she is incredibly misinformed. It hurts to make a fellow wom look stupid in the games industry, but she laid it bare for us.

She even gives us some of the envious groaning that regulars of the Expensive Items thread are used to, whining;
“The glitch benefits people who are denied pretty hats by the ♥♥♥♥♥♥♥♥ loathsome loot box market which overran TF2 years ago”.

Ergo, this is the last person on earth you should get any type of financial information from. They're your run-of-the mill bitter deject who can't grasp basic economic facts, so you should take that as a sound indication that their assessment is worth as much.

Example:
She seems to think that the “Unusual Glengarry Bonnet with the ‘Dead Presidents’ shower of dollar cash. “ is the “big mac” indicator of the health of the TF2 economy. She thinks Dead Presidents is a good effect, after all. Typical journos, being posers and terrible at it.

It isn't a valued hat. It's always been a low tier hat. As are all of the other bargain-bin unusuals currently priced below 10$ in the steam community market right now.

Keys are what we price things in, and they're the key commodity of the TF2 economy (no pun intended).
We don't price in dollars in this holler, we price in keys.

And keys are extremely healthy right now. People who've heard of the exploit have bought lots and lots and lots of keys from Volvo, and from the same traders Alice and people who don't know anything about trading think are panicking.

On the contrary: The very start of this exploit may have been the absolute best opportunity to cash out in keys, and the slumping aftermath of the exploit is the absolute best opportunity to buy keys that have flooded the market. It will be even better if Volvo decides to revert all of the exploit transactions, because those keys will return to 'existence' and also flood the market. Some have speculated that Volvo won't do this, but a lot of people expect them to because of the negative coverage and the fact that the exploit is contained to specific crates (which have exploded in value).

Imagine if Volvo did revert the unboxes/untradable those hats though. The ratio of keys to refined would reach a healthier point of equilibrium than the 55refined pricing it had been sitting at. It's not as good as creating a proper refined sink, but the aggregate effect on the TF2 economy.....get this....would actually be positive.

Market Analysis 101 here:

A “Market” is the total of exchanges of all commodities and services in a given market.

The only items affected by this exploit are the ones from the specific series of crates, which are currently hovering at about 3 dollars a piece due to the drive in demand. So the only commodities that have “crashed” in value, are those that were from the affected selection of crates.
As demand and supply for those crates and the valuables they unbox accelerated, the price of those hats approached the price of the key + the crate.
That is why you see those unboxed hats approaching the 4-7 dollar range. That is called “price equilibrium”. You just learned a thing. You're welcome.

Because of these natural market forces, there is no incentive to unbox these crates per the exploit anymore, as the likelihood of recovering the value from the purchase of the crate and the purchase of the key has lowered. We can see that people have been exceeding that value (possibly because they either already owned the crates or the keys and wanted to try them) which would add to the supply for the crates/keys, which is why the unbox value for those hats has fallen slightly below the value of the crate + key.

Basically meaning, if you're still curious about trying this exploit right now, you're in it to lose value. The people “panicking” right now are those who don't understand speculative investment and who hoarded those crates, because their value will begin to drop off shortly.

If you want to watch them panic in real time, go to the listings for any of those crates and scroll down to the people frantically listing for less than 3$. It's fun. Watch.

“But Filet, you just said a lot of words. Isn't the TF2 economy dead”

No, you heathen.
If anything...this nonsense oddly might have stimulated the TF2 economy. Valve has to do something because they can't just wipe out a series of hats and the values of effects, but even worst case scenario if they do nothing the only thing affected are the prices of substitute items.

If you're still confused (which you likely are without formal economic knowledge),

the TL:DR is that this is not a market crash in any technical sense. It's a steep price drop for a specific range of commodities that has already reached its worst point as of hours ago and the market for those items is already recovering.

If you have any questions are need any clarification, feel free to ask. I'll try to answer throughout the day.

[eat scat #KillTF2]

This is probably gonna come off as ignorant and mis-informed, but I read a comment on Reddit saying their $150 green energy just dropped to $8. Could Unusuals who’s price has dropped similarly to said Redditor’s eventually recover?

[7DAYS_VLAD [RU[]

This is not true and Im actually studying economics.

Unless Valve removes/replaces ALL of the bugged unusuals, THE TF2 ECONOMY WILL NOT RECOVER because there is simply wayyyyyyyyy too much supply of unusuals.

At best, if its only fixed and not the excessive supply removed, the prices will rise slightly again - but i even doubt that since people lost trust/left the tf2 economy after this, especially imagine someone that has thousands of dollars and loses like 97% of the value to this bug.

Valve has to remove them or make them untradable, else its dead forever.

[DJ Gargen]

The economy isn't going to crash because of this, but if you think this is somehow going to have a positive impact on the economy then you're being naive. The biggest issue is that now many traders' confidence in the TF2 economy has been shot. People whose hats have dropped off 90% in value are going to be disincentivized to keep trading. Fewer people trading means a worse economy.

Edit: This isn't even considering the ramifications for future crate-opening. What is the allure of unboxing an unusual when the hats have become usual?

[{ Filet }]

Originally posted by DefenderBender:

This is probably gonna come off as ignorant and mis-informed, but I read a comment on Reddit saying their $150 green energy just dropped to $8. Could Unusuals who’s price has dropped similarly to said Redditor’s eventually recover?

Really depends on the hat type and what Valve does about it. But as for the rest of the TF2 economy, it affects nothing in terms of key prices. If you 'browse by effect' on backpack.tf, you can confirm as much. Which seems strange, but if you think about it it's a positive sign.

Geel might have even frozen key pricing because trying to get the per-effect loading to work is next to impossible today, which is to the credit of his handling of the event. If you freeze key pricing, nothing really changes the next day.

As for the value of individual hats, it would be a gradual road to recovery if Valve decides not to take action about the exploit.

I would be very surprised if they didn't at the very least make the unboxes untradable, because it would directly go against the logic backing their decision to no longer make duplicates of scammed hats.

[Muldoonion]

It's certainly not a market crash, but the unusual sector is ♥♥♥♥♥♥ up now. Prices may recover a bit, but they're definitely not going back to pre-glitch prices.

[Ally]

Question(s)

-Won't this increase other unusual effects?

-Won't this lower the overall confidence in trading?

-Will this result in changes to key/ref prices?

[{ Filet }]

Originally posted by ♥♥♥♥♥♥♥♥♥♥♥♥♥♥♥♥♥♥♥♥♥♥♥♥♥♥♥♥♥♥♥♥:

This is not true and Im actually studying economics.

Unless Valve removes/replaces ALL of the bugged unusuals, THE TF2 ECONOMY WILL NOT RECOVER because there is simply wayyyyyyyyy too much supply of unusuals.

At best, if its only fixed and not the excessive supply removed, the prices will rise slightly again - but i even doubt that since people lost trust/left the tf2 economy after this, especially imagine someone that has thousands of dollars and loses like 97% of the value to this bug.

No offense intended, but I have a minor in macroeconomics from college, a degree in business administration, and am the current academic transcriber for market analysis at the prominent John Molson school of business, and I doubt your credentials being anything more than you taking Econ 201 in highschool. And the emotive nature of your response is your anxiety, not your expertise.

Even in the worst-case hypothetical scenario (our current existing reality, by the way, so this isn't a hypothetical:)
If the floor price of this range of unboxes remains entirely untouched by valve, the value of those hats remains at approximately 7$. These aren't penny stocks.

And this is assuming Valve won't take additional steps to remedy the situation, which in all probability is unlikely given that they have already eliminated the exploit.

[mink]

Keys and ref will still be healthy, infact refined has increased in price a bit now actually. But certain unusuals value has tanked, not the economy as a whole.

[{ Filet }]

Originally posted by Demon Days:

The economy isn't going to crash because of this, but if you think this is somehow going to have a positive impact on the economy then you're being naive. The biggest issue is that now many traders' confidence in the TF2 economy has been shot. People whose hats have dropped off 90% in value are going to be disincentivized to keep trading. Fewer people trading means a worse economy.

Edit: This isn't even considering the ramifications for future crate-opening. What is the allure of unboxing an unusual when the hats have become usual?

Uhm, "trader" confidence in the TF2 economy was already low because of what was happening to refined.

I made a very large alarmist thread a couple months ago about this market confidence issue with respect to free-to-play players, and that's actually the silver lining to this manner. I even made a second large argument thread about encouraging users to move from refined to eternaweens because refined is indeed dead as a useful means of currency.

When I say "trader", I mean people who actually rely on trading dynamics as their primary means of accessing goods and services in the TF2 economy. People who just buy their way into ownership of these assets are not traders. These people are external to the market operations of the TF2 economy, they're kind of like people from another country dumping foreign assets on the market that don't mean much to us.

Money people put into their steam community wallets or into the Mann Co store never "returns" or "appears" in the TF2 community market, if you understand what I mean. The only way it appears is when people buy keys. And that is what people have done a hell of a lot of this morning.

That is where the stimulating effect comes in, there is a surge of our true currency in the market right now. And the bonus possibility is Valve reverting those unboxes which would drive down key prices in terms of refined. That is only a best-case scenario hypothetical, but you should be able to see how we're half way to the total potential benefit to the total market (not to those unusuals prices).

Once you understand that the health of the TF2 economy is in terms of keys and not in terms of unusuals, you will understand what I mean.

Unusuals prices have -always- been speculative.

[{ Filet }]

Originally posted by Alyson The Nightingale:

Question(s)

-Won't this increase other unusual effects?

-Won't this lower the overall confidence in trading?

-Will this result in changes to key/ref prices?

1. No:
Because other unusual effects are 'substitute goods'. This is one of the determinants of demand for commodities.
A substitute good is the opposite of a complimentary good. To most people who want to buy/acquire an unusual, they are willing to get whatever is most similar to their ideal unusual that is most affordable to them. So if you can't afford a burning flames, you might get an eldrich flame or something like that. That is why I was concerned about effects that re-cycle old particle effects in the past, because it affects the demand for the original forms of effect.

2. Of course, temporarily:
Markets have natural forces that push supply and demand toward equilibrium. People still want unusuals, but the amount they're willing to pay for those particular unusuals has plummeted, and many of the people who want those unusuals still don't have the money in their steam wallets to purchase them. The prices will slowly recover, and traders with the resources are even more likely to scoop up and hoard the low-priced usuals as soon as some recovery measure takes place, driving prices back up toward their former ranges.

3. Yes:
Because people bought a lot of keys to play with the exploit, there are now many more keys in existence. If Valve reverts the use of those keys (which they may or may not do), there will be even more. So the value of refined in relation to keys is slightly stronger as a result today.

[Ally]

Originally posted by { Filet }:

Originally posted by Alyson The Nightingale:

Question(s)

-Won't this increase other unusual effects?

-Won't this lower the overall confidence in trading?

-Will this result in changes to key/ref prices?

1. No:
Because other unusual effects are 'substitute goods'. This is one of the determinants of demand for commodities.
A substitute good is the opposite of a complimentary good. To most people who want to buy/acquire an unusual, they are willing to get whatever is most similar to their ideal unusual that is most affordable to them. So if you can't afford a burning flames, you might get an eldrich flame or something like that. That is why I was concerned about effects that re-cycle old particle effects in the past, because it affects the demand for the original forms of effect.

2. Of course, temporarily:
Markets have natural forces that push supply and demand toward equilibrium. People still want unusuals, but the amount they're willing to pay for those particular unusuals has plummeted, and many of the people who want those unusuals still don't have the money in their steam wallets to purchase them. The prices will slowly recover, and traders with the resources are even more likely to scoop up and hoard the low-priced usuals as soon as some recovery measure takes place, driving prices back up toward their former ranges.

3. Yes:
Because people bought a lot of keys to play with the exploit, there are now many more keys in existence. If Valve reverts the use of those keys (which they may or may not do), there will be even more. So the value of refined in relation to keys is slightly stronger as a result today.

Hey thanks for the answer

[Mahmoud]

Originally posted by FLO:

It's certainly not a market crash, but the unusual sector is ♥♥♥♥♥♥ up now. Prices may recover a bit, but they're definitely not going back to pre-glitch prices.

this will affect all other items and probably items from other games. Remember the inter-trade feature.

[DJ Gargen]

Originally posted by { Filet }:

Originally posted by Demon Days:

The economy isn't going to crash because of this, but if you think this is somehow going to have a positive impact on the economy then you're being naive. The biggest issue is that now many traders' confidence in the TF2 economy has been shot. People whose hats have dropped off 90% in value are going to be disincentivized to keep trading. Fewer people trading means a worse economy.

Edit: This isn't even considering the ramifications for future crate-opening. What is the allure of unboxing an unusual when the hats have become usual?

Uhm, "trader" confidence in the TF2 economy was already low because of what was happening to refined.

I made a very large alarmist thread a couple months ago about this market confidence issue with respect to free-to-play players, and that's actually the silver lining to this manner. I even made a second large argument thread about encouraging users to move from refined to eternaweens because refined is indeed dead as a useful means of currency.

When I say "trader", I mean people who actually rely on trading dynamics as their primary means of accessing goods and services in the TF2 economy. People who just buy their way into ownership of these assets are not traders. These people are external to the market operations of the TF2 economy, they're kind of like people from another country dumping foreign assets on the market that don't mean much to us.

Money people put into their steam community wallets or into the Mann Co store never "returns" or "appears" in the TF2 community market, if you understand what I mean. The only way it appears is when people buy keys. And that is what people have done a hell of a lot of this morning.

That is where the stimulating effect comes in, there is a surge of our true currency in the market right now. And the bonus possibility is Valve reverting those unboxes which would drive down key prices in terms of refined. That is only a best-case scenario hypothetical, but you should be able to see how we're half way to the total potential benefit to the total market (not to those unusuals prices).

Once you understand that the health of the TF2 economy is in terms of keys and not in terms of unusuals, you will understand what I mean.

Unusuals prices have -always- been speculative.

The reason people purchase keys is to open crates. One of the huge draws of opening crates is the chance to open an unusual. The draw to opening an unusual has been effectively neutered.

[{ Filet }]

Originally posted by Mahmoud:

Originally posted by FLO:

It's certainly not a market crash, but the unusual sector is ♥♥♥♥♥♥ up now. Prices may recover a bit, but they're definitely not going back to pre-glitch prices.

this will affect all other items and probably items from other games. Remember the inter-trade feature.

Show us, then.

Because if it's true, it would be currently be reflected in those values.

[76561198048978863]

You need to put a potato at the end of long posts