Fw: [socialistdiscussion] Fw: [Peace-discuss] The financial crisis explained in simple terms

[unionyes]

----- Original Message ----- 
From: John Reimann 
To: socialistdiscussion at yahoogroups.com 
Sent: Saturday, March 07, 2009 8:55 AM
Subject: Re: [socialistdiscussion] Fw: [Peace-discuss] The financial crisis explained in simple terms


I really think this explanation leaves out half of the story.

What also happened is that all the other bars around noticed the
whopping business Heidi was doing and started the same program. They
then decided that the best thing they could do was, in conjunction
with the banks who were buying these bonds, to start a massive
advertising campaign to "drink now; pay later". This campaign was
supported by the nation's highest financial officer, who happened to
be a teetotaler. It was massively successful, beyond anybody's wildest
dreams. Work rules were changed to allow workers to get down to the
neighborhood bar during lunch breaks, and the entire discussion at
work was over what kinds of new, tasty drinks could be obtained at
which bars. Children in school were encouraged to imagine which bars
they would go to when the reached the magic age and to dream up new,
enticing drinks. You had an entire nation of drunks staggering around.

It was shortly after that that the crisis hit.

John

On Sat, Mar 7, 2009 at 6:10 AM, unionyes <unionyes at ameritech.net> wrote:
>
> ----- Original Message -----
> From: Morton K. Brussel
> To: peace-discuss Discuss
> Sent: Friday, March 06, 2009 11:23 PM
> Subject: [Peace-discuss] The financial crisis explained in simple terms
> Economics 101. This is from another list, but I thought it illuminating, and
> amusing?
>
> Begin forwarded message:
>
> From: "Caroline Herzenberg" <carol at herzenberg.net>
> Date: March 6, 2009 7:43:34 PM CST
>
> .............................................
>
> 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 ......
>
>
> ________________________________
>
> _______________________________________________
> Peace-discuss mailing list
> Peace-discuss at lists.chambana.net
> http://lists.chambana.net/cgi-bin/listinfo/peace-discuss
>
> ________________________________
>
> No virus found in this incoming message.
> Checked by AVG.
> Version: 7.5.557 / Virus Database: 270.11.9/1988 - Release Date: 3/6/2009
> 7:17 PM
> 

-- 
Check out:
http://www.iww.org/en/blog/1411

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