This is too good not to share. Now I understand. Drink, anyone?
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 to his negativity) of the bank decides that finally 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 fulfill 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.
End of story!!!
17 comments:
Here's a better explanation of how we got here:
Have I been living in another universe? Democrats are responsible for the economy? Housing caused the economic abyss we are in now? Those who believe this have lost your minds.
Reagan brought us the notion that good patriotic Americans live far beyond their means on credit. It is their right to do this. He brought the US government into line with this belief. For the past 30 years we have been brainwashed into believing that everyone must buy into this ownership society or you are unAmerican. Clinton did not own this pig. Reagan, Bush I, and Bush #2 pushed this idea harder.
Democrats did not force banks to lend to unqualified people nor did they force banks to take on fraudulent/scam loans. Shareholders forced this because they wanted the easy huge profits. Prices were never going to fall so they could not loose. Let some smuck live in a house for a year or two, threaten to foreclose, and the poor smuck will sell the house for $40k more than they paid for it. Everyone gets paid.
Democrats did not force banks to bundle loans and sell them as securities that were better declared to be than cash. The industry was not regulated in any way because the GOP insists that companies can regulate themselves better than anyone else. Standard & Poors, and Moody's committed fraud by labelling these securities as grade AAA. Nobody question and everyone forgot the risk they accepted when they bought those tranches up like they were free money.
The whole cause of this is too much debt. The marker has been called in and now we cannot pay. Wages did not keep up with increasing credit lines. Jobs were not created because profits were stashed in off-shore accounts or doled out in huge bonuses and salaries. We stopped producing real goods with real value.
It is time to move on. We need to fix the core problems, which are people who refuse to see reality and prefer to live in Ideology World.
Obama did not make this, and when all the gurus in the world only have the wrong answers, how in Hades do you expect one man to have the correct answer?
And whilst you fools bicker, the US slides into 3rd World status. When will your love for your children/grand children exceed your pettiness, selfishness and greed? That is when the US will start coming out of the economic abyss. Obama cannot save us. We are our own enemy.(Especially Diana)
Sep... I thought you weren't going to post anymore... bad boy. Face it SEP we will never agree, nor will we ever agree to disagree. You have overdosed on the dem koolaid... sorry honey there is no hope for you. Best of luck.. now buzz off!
Diana-we can agree to read each other's crap instead of selfishly just spewing your stuff and then refusing to read the "other's". That's not fair or fun. So why don't you loosen up a little, take me off E-block..and be brave enough to trade ideas- especially those with which you disagree the most. As far as the kool-aid goes, it's a tired old metaphor... let's just say we are passionate in our perspectives and leave it that.
SEP... ha ha ha nope I'm not doing it...i read enough of your shit when we were debating in emails with Jesse. Yeah I think that was enough shit reading for the rest of my life!!!!
Big surprise, another cowardly pigheaded republipuke...post away Sep, your comments are pertinent, intelligent, well-written, and comprehensive and we thinking and reading folk enjoy them immensely. Rock on!
Thank you Augustine...Perhaps we should have a mutiny on this blog cite- make the current occupant walk the plank, remove all those sophomoric graphics,the credibility-challenged nonsense that is nothing more than right wing shilling, and then erect a foreclosed sign- with a subtitle:Open under new and truthful management.
One...two, buckle my shoe,
Three...four shut the door...
Intelligent(lmao)well-written(lmao)and comprehensive(still laughing)
Suck it up Auggie... you just described most republicans ...lol
THE MARKET IS RALLYING FOR A THIRD CONSECUTIVE DAY...I GUESS THAT MEANS BUSH IS DOING A FINE JOB!!!! LMAO
LMAO... you consider double digits for yesterday a rally? lmfap
379 pts. tues
A few pts gained on wed
250 pts. on Wed.
You're damed right that's a rally..3 days of consecutive gains- we haven't seen that in a while. An over 500 pt jump in 3 days...Eat your heart out you swishy fail wisher.
On 259 pts on thursday... another huge jump...
Diana -if your posts get any weaker,
you're going to be invisible....
woooo hoooo another increase...who posted a profit today? I'm thinking next week will be great. I think that's the week the Obama's are on vacation. He should keep his mouth closed and all will be well! Lets cross our fingers! I mean we got 3000 pts. to make up!
Not only did we see a better than 600 point jump over the last three up days, Obama had a forum with the business leaders across America- They were wowed by Obama, they are all in with him on improving the business atmosphere and enacting new reforms. They couldn't say enough good things about working with President Obama. Diana- your party and disgruntled ilk are a shrinking speck or irrelvancy. Instead of throwing spitballs at our new president, you better focus on saving your sad, confused, leaderless party...I understand the other RNC Members are calling for Steele's head now...and is it true? Did he actually say that abortion should be an individual's decision? My-oh-my... What will your defacto leader El Rushbo do with that one???? >Burp!<
By this time in Bush's first term, he had already cleared to acres of Brush at Crawford... he was the most vacationing president in history...
TWO Acres and a mule?
lol SEP...they were WOW'D by Obama, oh please direct me to the liberal left wing bullshit propaganda website that was on. I'm laughing so hard... SEP it's blatent that you are on some heavy duty Koolaid...STEP AWAY FROM THE KOOLAID.
Oh my you didn't hear the good news from Obama yesterday, two days AFTER the 2nd huge spending bill past...It ain't as bad as he thought.
Refer to my blog post for Friday, March 13th. Put the koolaid down before you read!
Every major news outlet carried the press conference where Business leaders from across the economic spectrum discussed the economy, plans and strategies for dealing with the economy as well as all the other factors that will go into sustaining a good business climate going forward. Every speaker praised Obama and his willingness to work with them... Diana, you just need to take your head out of the sand...it's really not that hard.
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