Posted on 03/04/2009 4:38:47 AM PST by TigerLikesRooster
The Economic Crisis Explained With Alcohol.
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 Heidis 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 Heidis borrowing limit.
He sees no reason for undue concern since he has the debts of the alcoholics as collateral.
At the banks 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 slowly the time has come to demand payment of the debts incurred by the drinkers at Heidis 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 Heidis 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. Friday, February 13, 2009
Ping!
One thing is missing... Government forcing Heidi to give the drunks beer, which they cannot pay.
I’m going to read this at our Golden K breakfast meeting tomorrow...
Don’t be so hard on the Government. They let Heidi bundle up her bad tabs and sell them all over the world at ever infalting prices. So much so that Heidi started dragging drunks in off the street, even when she new they’d never be able to pay.
Oh, and the genius at the bank who dreamed up the scheme? He got a nice big bonus from the taxpayer bailout money.
EXCELLENT!
“Oh, and the genius at the bank who dreamed up the scheme? He got a nice big bonus from the taxpayer bailout money.”
Don’t forget the nice fat payments the banks made so the politicians would look the other way.
It never made sense.
Till now..
That doesn't quite work, though you could say alcohol salesmen did it.
mark
She would have had “cocktail brokers” working the street.
It’s layer upon layer, really. At almost every level a whole bunch of people made a ton of money, and stuck us with the fallout. So it goes.
ROFLOL..... exactly !!!!
Shhhh. Posting facts tends to make these rants sound silly.
Thanks I FINALLY understand! LOL!
Thanks! I love this analogy.
bookmark
“I’ll Drink To THAT!” BUMP!
Then all the young coked up dudes on Wall Street will write credit default swaps on those securitized bar tabs
I use alcohol in order to stop understanding what's going on, if only for a few hours.
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