Dear All,
The sequence and quality of events narrated below will give you a fair indication about the present global financial crisis. "Banta is the proprietor of a bar somewhere in Punjab . In order to increase sales, he decides to allow his loyal customers - most of whom are unemployed alcoholics - to drink now but pay later. He 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 Banta's bar. Taking advantage of his customers' freedom from immediate payment constraints, Banta increases his prices for wine and beer, the most-consumed beverages. His 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 Banta'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 Banta's bar. However they cannot pay back the debts. Banta cannot fulfill his 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 Banta's bar, having granted his generous payment due dates and having invested in the securities are faced with a new situation. His wine supplier claims bankruptcy, his 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. Now I hope you finally understand our current Financial Crisis!" --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Kences1" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/kences1?hl=en -~----------~----~----~----~------~----~------~--~---
