OT: Mary's Bar

/Mary is the proprietor of a bar in Dublin. 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. She keeps track of the drinks consumed on a ledger (thereby granting the customers loans).
Word gets around about Mary's "drink now, pay later" marketing strategy and, as a result, increasing numbers of customers flood into Mary's bar. Soon she has the largest sales volume for any bar in Dublin.
By providing her customers freedom from immediate payment demands, Mary gets no resistance when, at regular intervals, she substantially increases her prices for wine and beer, the most consumed beverages. Consequently, Mary's gross sales volume increases massively. A young and dynamic vice-president at the local bank recognises that these customer debts constitute valuable future assets and increases Mary's borrowing limit. He sees no reason for any undue concern, since 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, ALKIBONDS and PUKEBONDS. These securities are then bundled and traded on international security markets. Naive investors don't really understand that the securities being sold to them as AAA secured bonds are really the 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 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 Mary's bar. He so informs Mary.
Mary then demands payment from her alcoholic patrons, but being unemployed alcoholics they cannot pay back their drinking debts. Since Mary cannot fulfill her loan obligations she is forced into bankruptcy. The bar closes and the eleven employees lose their jobs.
Overnight, DRINKBONDS, ALKIBONDS and PUKEBONDS drop in price by 90%. The collapsed bond asset value destroys the banks' liquidity and prevents it from issuing new loans, thus freezing credit and economic activity in the community. The suppliers of Mary's bar had granted her generous payment extensions and had invested their firms' pension funds in the various 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 euro no-strings attached cash infusion from their cronies in Government. The funds required for this bailout are obtained by new taxes levied on employed, middle-class, non-drinkers who have never been in Mary's bar.
Now, do you understand economics in 2011?/
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
Robatoy wrote:

I don't think the principles of economics have changed much. You are relating a pretty old story. Help me understand what is going to happen in our economy in 2011 and I'll be impressed. If this is merely a joke, then just ignore my comment. For me, matters involving our economy are not, in the face of higher unemployment and more violent crime, much to laugh at--unless its to laugh instead of cry.
Bill
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

I think that is the best explanation of modern economics I have read since Eco 101 many years ago. DL
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On Fri, 14 Jan 2011 07:51:28 -0800 (PST), Robatoy

Well done. Scary, isn't it? And that's only one of many scams going on right now, just south of your banana crops.
-- A paranoid is someone who knows a little of what's going on. -- William S. Burroughs
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

And the only ones who have really benefited from this total fiasco, are the drinkers
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On 1/14/2011 5:38 PM, George W Frost wrote:

Unlike real life was no way that Mary the Bar owner could recover the drinks the customers consumed.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

.
Holy cow! He gets it!
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On Sat, 15 Jan 2011 09:38:48 +1100, "George W Frost"

--snip--
Right you are, George. They were allowed to pursue their liver disease without limit! Now you can pay higher insurance and medical rates from their defaulting at the hospital, too. Isn't this fun?
-- A paranoid is someone who knows a little of what's going on. -- William S. Burroughs
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Actually, they are screwed too, becasue their favorite pub (and the only one where they could get beer on credit) just shut down.
Nobody wins but the banks who got bailed out.
Doug White
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

What I meant was that the drinkers had been drinking all this time for free
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On Sat, 15 Jan 2011 15:45:37 +1100, "George W Frost"

Doug was cheating, using foresight and logic for his answer.
-- Threee days before Tucson, Howard Dean explained that the tea party movement is "the last gasp of the generation that has trouble with diversity." Rising to the challenge of lowering his reputation and the tone of public discourse, Dean smeared tea partiers as racists: They oppose Obama's agenda, Obama is African-American, ergo...
Let us hope that Dean is the last gasp of the generation of liberals whose default position in any argument is to indict opponents as racists. This McCarthyism of the left -- devoid of intellectual content, unsupported by data -- is a mental tic, not an idea but a tactic for avoiding engagement with ideas. It expresses limitless contempt for the American people, who have reciprocated by reducing liberalism to its current characteristics of electoral weakness and bad sociology. --George Will 14 JAN 2011 Article titled "Tragedies often spark plenty of analysis"
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

That's a good one Who uses logic these days ??
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
Darn, | was expecting another joke. Marc
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Glad that you showed up now people can laugh at you
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Related Threads

    HomeOwnersHub.com is a website for homeowners and building and maintenance pros. It is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.