April 03, 2009 –
Just what the Politbureaucrats ordered: [more]
March 25, 2009 –
Today I opened a package from the Memorial Sloan-Kettering Cancer Center. As I was pulling out the contents from the envelope, a small note fell out. [more]
March 14, 2009 –
real simple . . .
Heidi is the proprietor of a bar somewhere in Europe. 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-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
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 ...
[more]
March 08, 2009 –
Some clues on which investments are being fertilized and primed for Growth in China.
China's Stimulus Package: A Breakdown of Spending
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