Posted on 04/07/2009 9:46:31 PM PDT by Neil E. Wright
Heidi is the proprietor of a bar in Detroit . 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 about Heidi's "drink now pay later" marketing strategy and as a result, increasing numbers of customers flood into Heidi's bar and soon she has the largest sales volume for any bar in Detroit.
By providing her customers' freedom from immediate payment demands, Heidi gets no resistance when she substantially increases her prices for wine and beer, the most consumed beverages. Her sales volume increases massively.
A young and dynamic vice-president 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 traders transform these customer loans into DRINKBONDS, ALKIBONDS and PUKEBONDS. These securities are then traded on security markets worldwide. Naive investors don’t really understand the securities being sold to them as AAA secured bonds are really the debts of unemployed alcoholics. Nevertheless, their prices continuously climb, and the securities become the top-selling items for some of the nation's leading brokerage houses.
One day, although the bond prices are still climbing, a risk manager at the bank (subsequently fired due to his negativity), decides that the time has come to demand payment on the debts incurred by the drinkers at Heidi's bar.
Heidi demands payment from her alcoholic patrons, but being unemployed they cannot pay back their drinking debts. Therefore, Heidi cannot fulfill her loan obligations and claims bankruptcy.
DRINKBOND and ALKI BOND drop in price by 90 %. PUKEBOND performs better, stabilizing in price after dropping by 80 %. The decreased bond asset value destroys the banks liquidity and prevents it from issuing new loans.
The suppliers of Heidi's bar, having granted her generous payment extensions and having invested in the securities are faced with writing off her debt and losing over 80% on her bonds. Her wine supplier claims bankruptcy, her beer supplier is taken over by a competitor, who immediately closes the local plant and lays off 50 workers.
The bank and brokerage houses are saved by the Government following dramatic round-the-clock negotiations by leaders from both political parties. The funds required for this bailout are obtained by a tax levied on employed middle-class non-drinkers.
Finally an explanation I can understand!
Can we have an explanation in terms of boob jobs?
Let me see what I can come up with using that for an explanation .... ROFLMAO
Don’t forget that a young lawyer named Obama was part of a Cabal to sue banks for not loaning money to people who couldn’t pay it back. Freddie Mac and Fannie May were established to transfer the risk of non-payment (from risky loans) from the bank’s stock holders to the Federal Government.
In order to provide money to Freddie Mac and Fannie May, the Federal government triples the money supply.
McCain’s campaign staff thinks that Governor Palin is getting too much press, and seeks to put her in a negative light, so that McCain, if elected, will be seen as the moderate showing the way to victory, rather than the Christian and Conservative base supporting Christian and Conservative Governor Palin.
Obama looks like he is about to be elected. Any one with more than one bean between his ears pulls their money out of the market. Money supply available for the market drops like a stone.
Bush Administration after 7.5 years of inflation decides that the cure is to inflate the currency more. He succeeds in preparing the ground for President Obama to inflate the currency and to spend it on political corruption (Acorn et al.)
NOtwithstanding that this would-be analogy is at least halfway false-to-fact, the article is somewhat amusing.
I just knew it! They are all puking drunks!
Sorry. Wrong explaination.
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