Quote from: Calavera on February 16, 2014, 07:42:02 PM

Quote from: jaybny on February 16, 2014, 07:28:10 PM

Quote from: Calavera on February 16, 2014, 07:05:50 PM

Quote from: jaybny on February 16, 2014, 06:49:34 PM

the assumption was that goxBTC is fungible with BTC, otherwise its just paperBTC. In fact, before this incident goxBTC was $100 above bitstampBTC, because goxUSD was impossible to withdraw and worth less than bitstampUSD.

Well, obviously we're in agreement there because it's almost exactly what I put in my post. I also agree that people clearly currently want to be in GoxFiat rather than GoxBTC

So what are we not agreeing about?

Quote from: jaybny on February 16, 2014, 06:00:30 PM

As MtGox BTCs price drops relative to Bitstamp BTC, more BTCs will be bought/withdrawn on MtGox, and the cost to MtGox to make customers whole also goes up

They won't be withdrawn though, as the only people who can currently "withdraw" BTC from MtGox are MtGox themselves. Gox actually opening up BTC withdrawals again should see a large price jump on their exchange.

I'm not saying that Gox can get out of any position by using an external exchange. I'm saying that if Gox purchase 1 GoxBTC on their own exchange then they now owe $200 instead of 1BTC, so they've clearly reduced their overall debt (assuming a you consider BTC and fiat liabilities to be equally important, certainly debatable)

maybe im wrong regarding "more BTCs will be bought/withdrawn". but if gox is short BTCs, you would rather own goxUSD, but there will be some low were youd rather hold the goxBTC then sell for huge USD loss. this is what the market is currently doing, price discovery, at what price would you rather hold.

that depends on how many btcs were stolen.

Again we're (mostly) in agreement. I think there's just confusion caused by your somewhat ambiguous OP wrt "Reason why MtGox can go to 0 - without arbirage opportunity with Bitstamp" and

Quote

why the "no arbitrage theory" is not broken

Perhaps you were just aiming to explain why the BTC price was dropping on Gox, which isn't quite the same as it going to zero (zero as in no activity on the exchange? zero as in they enter liquidation and end up paying out a percentage of the fiat debts but zero on the BTC?) I also don't know what the "no arbitrage theory" is.

In either case, I would have expected there to have been other threads explaining the price on Gox for those that require it. It's been going on for days.

yes. correct. cant go to 0, can go to .0001... many people never understood why there was a gox premium over bitstamp in the first place. so many q's about arbitrage.. reason for post was simple basic explanation of gox discount to bitstamp.

http://en.wikipedia.org/wiki/Fundamental_theorem_of_asset_pricing
http://en.wikipedia.org/wiki/No_free_lunch_with_vanishing_risk
http://www.realworldrobotics.com/readings/financial-engineering/principle-of-no-arbitrage
http://www.investopedia.com/terms/a/arbitrage.asp