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The financial crisis

On 12 Oct 2009 at 4:35pm jonnyboy wrote:
The financial crisis explained in simple terms:
Mary is the proprietor of a bar in Dublin. 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 Mary's bar.
Taking advantage of her customers' freedom from immediate payment constraints, Mary 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 Mary'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 of the bank(subsequently fired due to his negativity) decides that slowly the time has come to demand payment of the debts incurred by the drinkers at Mary's bar.
However they cannot pay back the debts.
Mary 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 Mary'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.
But, what about Mary, her beer and wine suppliers and the bond investors, I hear you ask ?

STUFF THEM !!!!!!!!!!!!!!!!!

On 12 Oct 2009 at 5:36pm sashimi wrote:
Jonnyboy, pull the other one: it's got bells on. If you are going to invent a fantasy, at least make an effort to make it credible.
On 12 Oct 2009 at 5:45pm Brixtonbelle wrote:
Cripes - could this really happen ? Surely not ! - thought the whole point of capitalism was that it regulated itself and the stongest survived and market forces prevailed and non government intervention,,,,er..it's really f***ed up hasn't it ?
On 12 Oct 2009 at 8:39pm Spinster Of This Parish wrote:
Whatever next? A Lewes pound?

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