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Now we know
07-22-2012, 08:13 AM #1
ocker1 Member
Posts:2,081 Threads:801 Joined:Mar 2011
Helga is the proprietor of a bar. She realises that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronise her bar. To solve this problem she comes up with a new marketing plan that allows her customers to drink now, but pay later.

Helga keeps track of the drinks consumed on a ledger (thereby granting the customers' loans).

Word gets around about Helga's "drink now, pay later" marketing strategy and, as a result, increasing numbers of customers flood into Helga's bar. Soon she has the largest sales volume for any bar in town.

By providing her customers freedom from immediate payment demands Helga gets no resistance when, at regular intervals, she substantially increases her prices for wine and beer - the most consumed beverages.
Consequently, Helga's gross sales volumes and paper profits increase massively. A young and dynamic vice-president at the local bank recognises that these customer debts constitute valuable future assets and increases Helga's borrowing limit. He sees no reason for any undue concern, since he has the debts of the unemployed alcoholics as collateral.

He is rewarded with a six figure bonus.

At the bank's corporate headquarters, expert traders figure a way to make huge commissions, and transform these customer loans into DRINKBONDS. These "securities" are then bundled and traded on international securities markets.

Naive investors don't really understand that the securities being sold to them as "AA Secured Bonds" are really debts of unemployed alcoholics. Nevertheless, the bond prices continuously climb and the securities soon become the hottest-selling items for some of the nation's leading brokerage houses.

The traders all receive a six figure bonus.

One day, even though the bond prices are still climbing, a risk manager
at the original local bank decides that the time has come to demand payment on the debts incurred by the drinkers at Helga's bar. He so informs Helga. Helga then demands payment from her alcoholic patrons but, being unemployed alcoholics, they cannot pay back their drinking debts. Since Helga cannot fulfil her loan obligations she is forced into bankruptcy. The bar closes and Helga's 11 employees lose their jobs.

Overnight, DRINKBOND prices drop by 90%. The collapsed bond asset value destroys the bank's liquidity and prevents it from issuing new loans, thus freezing credit and economic activity in the community.

The suppliers of Helga's bar had granted her generous payment extensions and had invested their firms' pension funds in the BOND securities. They find they are now faced with having to write off her bad debt and with losing over 90% of the presumed value of the bonds. Her wine supplier also claims bankruptcy, closing the doors on a family business that had endured for three generations; her beer supplier is taken over by a competitor, who immediately closes the local plant and lays off 150 workers.

Fortunately though, the bank, the brokerage houses and their respective executives are saved and bailed out by a multi-billion dollar no-strings attached cash infusion from the government.

They all receive six a figure bonus.

The funds required for this bailout are obtained by new taxes levied on employed, middle-class, non-drinkers who've never been in Helga's bar.




07-22-2012, 02:50 PM #2
Octo Mother Superior
Posts:42,970 Threads:1,473 Joined:Feb 2011
Ha! drinking.gif
07-22-2012, 03:37 PM #3
Accidental Stoner Member
Posts:8,923 Threads:71 Joined:Feb 2011

İmage
07-22-2012, 05:43 PM #4
Kreeper Griobhtha
Posts:10,779 Threads:647 Joined:Feb 2011
Yup, that sums it up. One thing it left out was the government encouraging drinkers to run up a bill by giving them a small tax break on their first tab with Helga.


coffeetime.gif

Politicians hide themselves away
They only started the war
Why should they go out to fight?
They leave that role to poor
07-22-2012, 05:53 PM #5
Shadow Mrs. Buckwheat
Posts:12,782 Threads:1,182 Joined:Feb 2011
Good metaphor but not entirely fair. A majority of those caught in debt are not Helga's patrons but regular employed (or under-employed) people trying to get by, live the urban dream. To type-cast them all as unemployed alcoholics is a dirty tactic I've seen played out countless times.
07-23-2012, 12:46 AM #6
Accidental Stoner Member
Posts:8,923 Threads:71 Joined:Feb 2011
True that, Shadow.
07-23-2012, 02:05 AM #7
Cynicalabsurdance Member
Posts:8,713 Threads:203 Joined:Feb 2011
gawd

i fit none of the profiles in that.

self employed
pay no taxes

do not drink
buy no bonds
never borrow or loan

do not get a bonus

smell and look like a drunk bum ,,, but am not


hmmmm,,, and my economy is growing exponentially

i support no one
have no employees

do not invest in futures
nor the past-ies

hmmmmmmmmmmmmmmmmmmmm,,,,,,,,,,,,

and,,,,,

my personal economy is growing exponentially

i do not go into foreclosure or bankruptcy

no government bail outs

and,,,, my personal economy is growing exponentially


perhaps,,,

nah,,, i could never bother with running a Nationchuckle.gif

07-23-2012, 03:15 AM #8
yankees skier
Posts:5,898 Threads:215 Joined:Feb 2011
That's what Helga gets for serving Bud Light. If she sold craft biere, she would have a better patrons. coffeetime.gif

Biere.
07-23-2012, 04:19 AM #9
Cynicalabsurdance Member
Posts:8,713 Threads:203 Joined:Feb 2011
no doubt,,, but i wonder,, would they still have to run a tab ?
07-23-2012, 02:23 PM #10
ocker1 Member
Posts:2,081 Threads:801 Joined:Mar 2011
crikey That Yankees has bin drinkin on my TAB fer years !
07-23-2012, 02:33 PM #11
Octo Mother Superior
Posts:42,970 Threads:1,473 Joined:Feb 2011
Maybe you can sell his debt to the Chinese. chuckle.gif
07-23-2012, 04:21 PM #12
yankees skier
Posts:5,898 Threads:215 Joined:Feb 2011
chuckle.gif

Biere.



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