The Current Financial Crisis Explained

by Big Tex 5 Replies latest social current

  • Big Tex
    Big Tex

    This isn't mine, but I really like it:

    The financial crisis explained in simple terms:

    Heidi is the proprietor of a bar in Berlin. In order to increase sales, she decides to allow her loyal customers - most of whom are unemployed alcoholics - to drink now but pay later.
    She keeps track of the drinks consumed on a ledger (thereby granting the customers loans).

    Word gets around and as a result increasing numbers of customers flood into Heidi's bar.

    Taking advantage of her customers' freedom from immediate payment constraints, Heidi increases her prices for wine and beer, the most-consumed beverages.
    Her sales volume increases massively.

    A young and dynamic customer service consultant at the local bank recognizes these customer debts as valuable future assets and increases Heidi's borrowing limit.

    He sees no reason for undue concern since he has the debts of the alcoholics as collateral.

    At the bank's corporate headquarters, expert bankers transform these customer assets into DRINKBONDS, ALKBONDS and PUKEBONDS.
    These securities are then traded on markets worldwide. No one really understands what these abbreviations mean and how the securities are guaranteed.
    Nevertheless, as their prices continuously climb, the securities become top-selling items.

    One day, although the prices are still climbing, a risk manager (subsequently of course fired due his negativity) of the bank decides that slowly the time has come to demand payment of the debts incurred by the drinkers at Heidi's bar.

    However they cannot pay back the debts.

    Heidi cannot fulfil her loan obligations and claims bankruptcy.

    DRINKBOND and ALKBOND drop in price by 95 %. PUKEBOND performs better, stabilizing in price after dropping by 80 %.

    The suppliers of Heidi's bar, having granted her generous payment due dates and having invested in the securities are faced with a new situation.
    Her wine supplier claims bankruptcy, her beer supplier is taken over by a competitor.

    The bank is saved by the Government following dramatic round-the-clock consultations by leaders from the governing political parties.

    The funds required for this purpose are obtained by a tax levied on the non-drinkers.

    Finally an explanation I understand .....

  • BizzyBee
    BizzyBee

    Apparently, the drinks are on us!

  • read good books
    read good books

    And then there will be those bankers who shorted the Drinkbound, Alkbound, and Pukebound funds, when those funds go down they make money but for some reason the funds go back up and they loose money so the taxpayers have to subsidize them so that either way they win! And then they do it again, and again, and again, and finaly somebody notices how crooked they all are and so they give them all jobs in the Presidents cabinet, first Bush and then Obama's cabinet.

    Now they are in charge of saving the economy.

  • Big Tex
    Big Tex
    Now they are in charge of saving the economy

    Yeah I know. Nice thought isn't it?

    I don't think Republicans/conservatives or Democrats/liberals are the answer. A pox on both houses frankly.

    Chris

  • FormerMormon
    FormerMormon

    Mormons don't drink, so does that mean we can skip your little recession?

  • sacolton
    sacolton

    In a nutshell, credit has hurt our economy. Credit card companies handing out free cards with a $5,000 limit to ANYONE ... and those people max'd those cards out and couldn't pay it back.

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