Gordon is a moron

[NogoodBoyo]

Only 2.35% of you may be interested in this.  And it's from Radio NFR (not for rugby?)  But here we goes anyways:


"Gordon was the proprietor of a bar in Glasgow .....

He realizes that virtually all of his customers are unemployed alcoholics and, as such, can no longer afford to patronize his bar.

To solve this problem, he comes up with a new marketing plan that allows his customers to drink now, but pay later.

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

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

By providing his customers freedom from immediate payment demands, Gordon gets no resistance when, at regular intervals, he substantially increases his prices for wine and beer, the most consumed beverages.

Consequently, Gordon's gross sales volume increases massively.

A young and dynamic president at the local bank recognises that these customer debts constitute valuable future assets and increases Gordon's borrowing limit.

He sees no reason for any undue concern because he has the debts of the unemployed alcoholics as collateral!

At the bank's corporate headquarters, expert traders figure a way to make huge commissions, and transform these customer loans into DRINKBONDS.

These "securities" then are bundled and traded on international securities markets.

Naive investors don't really understand that the securities being sold to them as "AAA Secured Bonds" really are 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.

One day, even though the bond prices still are 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 Gordon's bar. He so informs Gordon.

Gordon then demands payment from his alcoholic patrons. But, being unemployed alcoholics -- they cannot pay back their drinking debts.

Since Gordon cannot fulfil his loan obligations he is forced into bankruptcy. The bar closes and Gordon'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 Gordon's bar had granted him 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 his bad debt and with losing over 90% of the presumed value of the bonds.

His wine supplier also claims bankruptcy, closing the doors on a family business that had endured for three generations, his 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 multibillion pound no-strings attached cash infusion from the government.

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

Now do you understand derivatives ???"

Nogood "splaining the merchants of pennis, isit" Boyo

[Burt]

Welcome back sir...unless I missed something it seemed like you had gone AWOL  :dft011:

[nevzter]

Nicely done.  Has it all come full circle now, or are we waiting for Asia to collapse (again) to complete the Yank-induced disaster?   Get Coat gif

[cebu]

Nicely done.  Has it all come full circle now, or are we waiting for Asia to collapse (again) to complete the Yank-induced disaster?   Get Coat gif

Yank induced? Like the UK and other Europeans are i-n-n-o-c-e-n-t!  091.gif

[cebu]

Brilliant analogy, NogoodBoyo! Well done!    :Haynes The Maestro:

[nevzter]

Nicely done.  Has it all come full circle now, or are we waiting for Asia to collapse (again) to complete the Yank-induced disaster?   Get Coat gif

Yank induced? Like the UK and other Europeans are i-n-n-o-c-e-n-t!  091.gif

Ahh, but "innocence" is a term of art.  Sucking on the tit of fraudulent derivatives (hatched in the USA) was a bad, bad component of all this... 093.gif

[cebu]

Nicely done.  Has it all come full circle now, or are we waiting for Asia to collapse (again) to complete the Yank-induced disaster?   Get Coat gif

Yank induced? Like the UK and other Europeans are i-n-n-o-c-e-n-t!  091.gif

Ahh, but "innocence" is a term of art.  Sucking on the tit of fraudulent derivatives (hatched in the USA) was a bad, bad component of all this... 093.gif

A) no financial institution was forced to purchase this

B) allegedly European financial institutions were/are competent in their investment decisions speculative idiocy.

[nevzter]

Nicely done.  Has it all come full circle now, or are we waiting for Asia to collapse (again) to complete the Yank-induced disaster?   Get Coat gif

Yank induced? Like the UK and other Europeans are i-n-n-o-c-e-n-t!  091.gif

Ahh, but "innocence" is a term of art.  Sucking on the tit of fraudulent derivatives (hatched in the USA) was a bad, bad component of all this... 093.gif

A) no financial institution was forced to purchase this

B) allegedly European financial institutions were/are competent in their investment decisions speculative idiocy.

True, but huge amounts of money were made before the crash on this .  Thus, no incentive to 'stop making money' until such situation is forced upon the institution.  It's a bad scene all around.

[cebu]

Nicely done.  Has it all come full circle now, or are we waiting for Asia to collapse (again) to complete the Yank-induced disaster?   Get Coat gif

Yank induced? Like the UK and other Europeans are i-n-n-o-c-e-n-t!  091.gif

Ahh, but "innocence" is a term of art.  Sucking on the tit of fraudulent derivatives (hatched in the USA) was a bad, bad component of all this... 093.gif

A) no financial institution was forced to purchase this

B) allegedly European financial institutions were/are competent in their investment decisions speculative idiocy.

True, but huge amounts of money were made before the crash on this ".  Thus, no incentive to 'stop making money' until such situation is forced upon the institution.  It's a bad scene all around.

Agreed about the greed factor, but my point is you can blame what happened in the US on US practices alright , but any European etc problems are entirely the responsibility of the local snouts-in-the trough. They knew how irresponsible it was/is.

[nevzter]

Nicely done.  Has it all come full circle now, or are we waiting for Asia to collapse (again) to complete the Yank-induced disaster?   Get Coat gif

Yank induced? Like the UK and other Europeans are i-n-n-o-c-e-n-t!  091.gif

Ahh, but "innocence" is a term of art.  Sucking on the tit of fraudulent derivatives (hatched in the USA) was a bad, bad component of all this... 093.gif

A) no financial institution was forced to purchase this

B) allegedly European financial institutions were/are competent in their investment decisions speculative idiocy.

True, but huge amounts of money were made before the crash on this "."  Thus, no incentive to 'stop making money' until such situation is forced upon the institution.  It's a bad scene all around.

Agreed about the greed factor, but my point is you can blame what happened in the US on US practices alright , but any European etc problems are entirely the responsibility of the local snouts-in-the trough. They knew how irresponsible it was/is.

I agree that 'people in the know' had knowledge of the risks and continued with the "greed factor" despite having an inkling that the bottom would fall out at some point.  Now, the US's Nasdaq, Dow and S&P have all recently ebbed and flowed with the predicament of the Euro markets.  Not that this is rocket science, but it's truly a global economy these days...a massive loss anywhere affects the entire global economy.  Where's G. Orwell?????    

[jarv]

Brilliant. 064.gif 064.gif

[Mr_Moon]

Ha, pretty good!

[NogoodBoyo]

In the interests of full disclosure, an NYC copper  friend of mine sent me this.  I don't have the savs to put together this sort of thinking. 
I think he blagged it orf a villain.
Nogood "cut'n'paste, isit" Boyo