To the Editor:
There was a new bar in Pinardville that had been doing a tremendous business. The new bar owner realized that most of their customers were unemployed and unable to go to the new bar. To solve this problem, the bar owner came up with an idea that allowed unemployed customers to drink whenever they wanted, but pay later. The bar owner kept track of the drinks consumed in a ledger (thereby granting the customers loans.)
Word got around Goffstown about the new bars “drink now, pay later” policy and, as a result, increased the number of new customers that flooded into the bar.
By providing customers freedom from immediate payment demands, the new bar was able to substantially increase prices for drinks and massively increase total sales volume and profit.
A VP at a Goffstown branch office of a large national bank recognized that these customer debts constituted valuable future assets and increased the new bars borrowing limits. The bank saw no reason for any undue concern, since the bank had the debts of the unemployed drinkers as collateral.
At the bank’s corporate headquarters, expert traders transformed these customer loans into Pukebonds (PUs), Drinkbonds (DBs) and Alkibonds (ABs). These Securities were then bundled with other kinds of bonds and traded on national and international security markets.
Investors were fooled by the phony AAA bond ratings on the bonds and the fact that they were really the debts of unemployed drinkers. The US regulatory agencies turned a “blind eye” on the trades.
Nevertheless, the bond prices continued to climb, and the securities became the hottest-selling item for the bank and for some of the nation’s leading brokerage houses…to the tune of $billions.
Profits and bonuses went through the roof for everyone at the bank and brokerage houses.
Insurance on the bonds was acquired that made the bonds a foolproof investment for the banks.
One day, a risk manager at the local Goffstown bank asked the bar to make payments on the loan.
The bar owner then asked the patrons to pay on their loans, but being unemployed they couldn’t.
The bar was then forced to close and eleven Goffstown employees were terminated.
Overnight the bonds dropped 90% in price causing the bank to cease loaning money in Goffstown.
The bar’s suppliers were also forced into bankruptcy because of the bars inability to pay their bills.
Fortunately though, the bank and brokerage houses and their respective executives were saved and bailed out by multi-billion dollar, “no-strings attached” cash infusions from the US government.
The funds for these bailouts were obtained from new stealth taxes levied on employed, middle-class, non-drinkers who didn’t even know of the new bar’s existence in Pinardville.
The bank and brokerage houses have since moved on to other businesses and countries that have been intentionally granted loans that they could never hope to repay because that is still the profit game!
Luckily for Goffstown, a good beverage, food and a game of darts is still available at Steve’s place.
I just thought that you had a “Right to Know (R2K.)”