Understanding the anatomy of the Financial crisis - Page 2
The RetrieverTraining.Net Forums The Retriever Academy
Total Retriever Training with Mike Lardy
Hawkeye Media Gunners Up Tritronics Wildear
Page 2 of 2 FirstFirst 12
Results 11 to 14 of 14

Thread: Understanding the anatomy of the Financial crisis

  1. #11
    Senior Member sinner's Avatar
    Join Date
    Oct 2007
    Colorado Springs, CO



    Heidi is the proprietor of a bar in Berlin . 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-onsumed 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 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 Heidi's bar.
    However they cannot pay back the debts.
    Heidi cannot fulfill her 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 Heidi's bar, having granted her generous payment due dates
    and having invested in the securities are faced with a new situation. Her wine supplier claims bankruptcy, 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. The funds required for this purpose are obtained by a tax levied on the non-drinkers.

    Finally an explanation I understand ....

  2. Remove Advertisements

  3. #12
    Senior Member Buzz's Avatar
    Join Date
    Apr 2005
    Brookings, South Dakota


    Quote Originally Posted by Marvin S View Post
    Before we start - let's have one for the Lady Jackrabbits - 31-2, whopped TCU 90-55 & can't get a mention on ESPN. It's all about TN getting beaten badly by a mid-major.

    . Article's not bad, how many of your idealogy will understand it?

    YOUR GUYS - Do you want me to remind you again next week.
    Marvin, as you can imagine, women's basketball is BIG here in Brookings right now. All the nay sayers that didn't want SDSU going division 1 are eating crow about now.

    You ask how many of my ideology will understand it? I wonder how many people period will understand it. If you were to go back and look at my posts late last summer and fall, this is what I was talking about. The gooberment or private individuals can buy up these toxic assets, but the sellers of these CDS's will still be on the hook for what they owe to those who they sold this "insurance" to. Scary...

    And by the way, don't remind me.
    "For everyone to whom much is given, of him shall much be required." -- Luke 12:48

    Raven - Moneybird's Black Magic Marker***
    (Esprit's Power Play x Trumarc's Lean Cuisine)
    Mick - Moneybird's Jumpin' Jack Flash***
    (Clubmead's Road Warrior x Oakdale Whitewater Devil Dog)
    Peerless - Moneybird's Sole Survivor
    (Two River's Lucky Willie x Moneybird's Black Magic Marker)

  4. #13
    Senior Member cotts135's Avatar
    Join Date
    Aug 2008
    Watertown NY


    Quote Originally Posted by Marvin S View Post
    With Geithner's ethical lapses he should not have been confirmed, but it happened. He probably was underqualified to hold his previous positions, but that's his pedigree, & it looks good on a resume.

    To make a change at this time would not be a good move, the people that count (meaning the private sector) are getting a read on Geithner & will get the country out of this problem given just a few tools to work with. As for former Treasury Secretary's think Paulsen, Snow, O'Neill & Rubin in recent times, name one of those who really had control of the subject. Any successes they encountered were more dumb luck than part of a cohesive plan. & I'm especially disappointed in Rubin, wealthy beyond imagination because of his actions, what did he create?
    My main gripe with Geithner is that he is a Wall St insider. I have no doubt that he is brilliant and understands the problems we now face but he comes from inside the bubble that is insulated from the real world. On a daily basis it is demonstrated that these executives really don't get what is going on. How else do you explain this culture where they believe there is no problem receiving these gigantic bonuses even while driving there company along with the rest of America into the ground. Where else in America is that happening? Then I read today in an article in the Wall St. Journal that the bankers are complaining to the Obama administration about the legislation taxing these bonuses and that if they are not going to take care of that problem, well, we are not going to help you with yours. Sounds like extortion to me. What ever happened that we all have to sacrifice a little in these difficult times?
    It is this whole mindset that is poisoning the well. I am sure there is someone who is not from Wall St. that understands the problem as well as Geithner and see's it for what it is: A problem of American confidence,political incompetence and Wall St. culture .

  5. Remove Advertisements

  6. #14
    Senior Member zeus3925's Avatar
    Join Date
    Mar 2008
    West Twin Cities Metro, MN


    Quote Originally Posted by cotts135 View Post
    At least the bastards bet right on that outcome. As citizens it more important than ever that we educate ourselves on what happened and that we stop acting in the best interests of the tycoons of Wall St. Obama needs to know as does Congress that this cozy relationship with these corporations needs now to be scrutinized, transparent and regulated like it was under a microscope.
    Obama's first move should be to get rid of Geithner.
    In the same vein, these guys will shed cash on anyone that appears to be a winner. They follow the ideology of their wallets.

    I don't want to feed an ugly dog!

Similar Threads

  1. Despair over financial policy
    By Buzz in forum POTUS Place - For those who talk Politics in the Gallery!
    Replies: 6
    Last Post: 10-24-2009, 04:51 AM
  2. Financial impact data needed
    By dennismc115 in forum RTF - Retriever Training Forum
    Replies: 16
    Last Post: 10-09-2009, 08:16 PM
  3. financial mags. gdg
    By duk4me in forum RTF - Retriever Training Forum
    Replies: 1
    Last Post: 04-08-2009, 04:41 PM
  4. Financial FACT to consider before 11/4...GDG
    By K G in forum RTF - Retriever Training Forum
    Replies: 1
    Last Post: 09-25-2008, 01:27 PM
  5. functional anatomy?
    By LH in forum RTF - Retriever Training Forum
    Replies: 20
    Last Post: 04-15-2007, 02:21 AM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts