Quote from: JoelKatz on November 13, 2012, 12:13:13 PM

That's precisely what happened here. Both sides were equally culpable in their mistaken belief that Patrick's business model was sound and that his loan portfolio was largely free of correlated risk. Everything they said to each other reinforced and flowed from that shared mistake belief. The damages flowed directly from that mistaken belief.

This is a false statement you have for the first time introduced on November the 5th:

Quote from: JoelKatz on November 05, 2012, 07:29:45 AM

There's no evidence this was a scam. In fact, everything I can see suggests that it was simply a common mistake.

and since repeated it 43 (that's forty three) times without any actual substantiation (if we don't count "everybody knows") and with no actual change.

The statement, illogical and untenable such as it is, was demolished by pretty much everyone who bothered to consider the matter, among which:

Quote from: SgtSpike on November 06, 2012, 12:20:05 AM

I'll have to disagree with you here JoelKatz.

The contract was made on assumptions that Patrick made, sure. But that doesn't mean he can back out of his contract scot-free just because his assumptions were wrong.

[...]

We're hitting Patrick's Bitcoin community "credit score" because he failed to hold up his end of the bargain.

Quote from: MPOE-PR on November 06, 2012, 02:53:35 PM

Quote from: JoelKatz on November 05, 2012, 07:29:45 AM

on the common understanding that he had no or limited Pirate exposure.

No. It was based on Patrick's representation to that effect. Your attempts to represent this as a "common mistake" are unseemly and quite frankly are doing a lot of damage to your own credibility.

Quote from: fbastage on November 06, 2012, 03:58:48 PM

looks like Hartnett took the loan, and thus the obligation to repay. further, he misrepresented his exposure to his creditors.

mistake is his. scammer/default.

Quote from: Zeeks on November 06, 2012, 04:58:48 PM

Seems odd that there is even an argument. PatrickHarnett is supposed to have paid back some Bitcoins and has not. I am sure there are reasons for this but that still does mean he is in default. Paying back little bits of what he owes doesn't change that.

Or, do Bitcoins operate on a different set of logic?

Quote from: superfastkyle on November 06, 2012, 05:47:24 PM

Joel's arguments are really dumb. Patrick was acting as a bank. Charging higher interests for loans vs paying deposits, with the assumptions that the difference would more than make up for defaults in the loans with a little profit left for him. The fact that Patrick loaned out money to people who were investing in pirate is not anyone else's fault but Patrick's, he should have either been more careful with who he was loaning to or charged a higher interest rate. You don't expect your bank to pay you half of your usual percentage rate on a CD or savings account because more people foreclosed on their homes than the bank suspected?

Quote from: makomk on November 06, 2012, 10:13:28 PM

Quote from: JoelKatz on November 06, 2012, 11:39:25 AM

The argument would be that you can't look to the contract because the contract doesn't say what happens if the cherries weigh 4,500 pounds. Everything written in the contract is based on the assumption that the cherries weigh 5,000 pounds. (Unless it contains some clause about the weight, of course.) Here, it is clearly unjust to enforce the contract as agreed because the agreement was predicated on the shared belief.

That's a bad analogy. Patrick Harnett had full control over who he lent to in order to reduce correlated risk. He had information on what exactly applicants claimed to be using the money for and the ability to demand as much evidence of this as necessary. Based on this evidence, he falsely assumed that his borrowers weren't exposed to Pirate and got screwed - that's the incorrect belief that's the problem here, and the people who loaned Patrick money didn't have this information! They had to rely on Patrick's promise that he was competent to vet applicants and that he'd made sure not to lend money to people who'd just invest it in Pirate.

A closer analogy would be if one party entered into a contract in which they gave another party money which the second party was to buy a lorry-load of cherries with, and they'd split the profit from reselling them. If the second party then goes and buys off the back of a truck in some parking lot and gets crates full of rubble instead, which party should be liable?

Quote from: orcinus on November 06, 2012, 10:26:52 PM

Quote from: JoelKatz on November 06, 2012, 06:41:39 PM

Explaining that the failure that resulted in the loans going bad was due to a mistake made jointly by both parties and thus not equitably allocatable entirely to one of them. Patrick is as much a victim here as those who loaned him money -- assuming he eventually makes some kind of reasonable settlement for a portion of the principle.

You are making no sense. Are you living in the vicinity of a strong reality distortion field of some kind?

Quote from: CharlieContent on November 08, 2012, 03:18:22 PM

Quote from: JoelKatz on November 08, 2012, 01:21:20 AM

But I think we all agree that a person who borrows some Bitcoins fully intending to pay them back but then can't pay them back (say they lost their job) deserves a scammer tag.

So why on earth doesn't Harnett then?

I thought your argument was that Harnett's lenders are equally to blame for any problems they have experienced due to his default because they should have done more due diligence before lending to him.

Quote from: Deprived on November 09, 2012, 08:11:47 PM

You're repeating the same fallacy again and again. The two cases aren't remotely similar.

Quote from: Deprived on November 09, 2012, 11:12:10 PM

Not only is your argument logically inconsistent ("everyone knew X", "Except the people who had the most interest in knowing X", "And specifically except the only person who COULD know X"), it's also totally irrelevant anyway. At no stage has PH claimed he should be released from his obligations because "everyone who invested must have known I was exposed to pirate so should take a massive haircut if they ever get paid back as their ignorance trumps my incompetence.".

Seems to me like PH made some errors of judgment, was unable to fulfil his commitments, still accepts he has those commitments but is unable/unwilling to resolve them in any sort of timely manner. As such there's no point him posting here - as he isn't disputing any of MP's facts or what he owes. If policy was consistent then I'd actually expect him to get a tag about same time after default as nefario did (both broke an off-forum agreement - more clearly tbh in PH's case). Both have reasons outside their own control why they believed they had no choice but to break existing agreements. Both, arguably, should have known that risk existed (in PH's case by properly doing due diligence on how his customers were using their loans). Luckily for PH I don't think any of his victims are mods - so he's probably safe.

Quote from: Stephen Gornick on November 13, 2012, 09:07:47 AM

Quote from: JoelKatz on November 13, 2012, 08:49:05 AM

The integrity that comes from taking an unpopular position because you believe it is correct and because you believe it is what the community needs to hear.

I'm sorry I've been holding back from commenting on this thread (as I've never had any business dealings with Patrick and thus this topic is really none of my concern) but now with that comment I must interject.

This logic of yours is NOT what the community needs to hear.

Basically, a cut and dry case of a shill trying to scream louder than everyone and thus enact his lie as some semblance of truth.