Thanks to my friend Sam Clarke in Australia for this..
Linda is the proprietor of a bar in Cork . 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
Taking advantage of her customers freedom from immediate payment constraints, Linda 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 Linda's borrowing limit.
He sees no reason for undue concern since he has the debts of the alcoholics
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 to his negativity) of the bank decides
that the time has come to demand payment of the debts incurred by the drinkers at Linda's bar.
However they cannot pay back the debts.
Linda cannot fulfil 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 Linda'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 (and vested interests).
The funds required for this purpose are obtained by a tax levied on the non-drinkers.
Finally an explanation I understand...
But what I don't understand is the HOORAY to the fact that the Germans and the Others are lending us billions so that we can then pay them back the money owing to them