From the Net, author
unknown (but brilliant).
Heidi is the proprietor of a bar in Detroit. She
realizes that virtually all of her customers are unemployed alcoholics and, as
such, can no longer afford to patronize her bar. To solve this problem, she
comes up with 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 Heidi's "drink now, pay
later" marketing strategy and, as a result, increasing numbers of
customers flood into Heidi's bar. Soon she has the largest sales volume for
any bar in Detroit By providing her customer's freedom from immediate
payment demands, Heidi gets no resistance when, at regular intervals, she
substantially increases her prices for wine and beer, the most consumed
beverages. Consequently, Heidi's gross sales volume increases massively.
A young and dynamic vice-president at the local bank
recognizes that these customer debts constitute valuable future assets and
increases Heidi'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 transform these customer loans
into DRINKBONDS, ALKIBONDS and BARFBONDS . 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 Heidi's bar. He so
informs Heidi. Heidi then demands payment from her alcoholic patrons, but
being unemployed alcoholics they cannot pay back their drinking debts . Since,
Heidi cannot fulfill her loan obligations she is forced into bankruptcy. The
bar closes and the eleven employees lose their jobs.
Overnight, DRINKBONDS, ALKIBONDS and BARFBONDS drop in
price 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 Heidi's bar had granted to 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 dollar
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 Heidi's bar.
And there you have it. "*hiccup*"
