Financial Crisis explained....

[Ohiobucks]

The simple explanation

The financial crisis explained in simple terms.............................

Heidi is the proprietor of a bar in Chicago. 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 because he has the promissory notes of Heidi's customers as collateral.

At the bank's corporate headquarters, expert bankers transform these customer assets into DRINKBONDS, ALKBONDS and PUKEBONDS. These securities are then sold and 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 his negativity), decided that the time has come to start demanding payment from Heidi for the debts incurred by the drinkers at Heidi's bar.

Unfortunately Heidi's customers cannot pay back any of their debts to Heidi.

Heidi cannot fulfill her loan obligations to the bank and claims bankruptcy.

DRINKBOND and ALKBOND drop in price by 95 %. PUKEBOND performs better, stabilizing in price after dropping by only 80%.

The suppliers of Heidi's bar, having granted her generous payment terms and also having invested in the securities are faced with a new and desperate situation. Her wine supplier claims bankruptcy and 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. They came up with a miraculous rescue plan that saved the bank.

The funds required for this massive rescue are obtained by levying a new tax on all the non-drinkers.

Finally an explanation I understand...

[okiedog]

It all makes sense to me now... Thanks:D

[PotashRLS]

Now that you put it that way, I sure could use a drink!!!!!

[Rhino]

Hummmmm....Well Tom I guess the only way to get our share of the bailout is to meet at Heidi's bar.

[gzilla45]

I'll get the first round. And actually pay for it.

[stevebeilgard]

Now that you put it that way, I sure could use a drink!!!!!

yep

[de_ballew]

I'm going to sue Heidi for getting me drunk. It's not my fault she made me drink. I'm joining ACORN and we are gonna show them.