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11-12-2015, 08:00 AM
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#1
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Thinks s/he gets paid by the post
Join Date: Jul 2013
Location: Texas
Posts: 1,065
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The economy explained..
Worth the read...
This Woman Just Explained Economics In A Nutshell. And It's So True It Hurts.
...here are the opening paragraphs...
Mary is the proprietor of a bar in Dublin. 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 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).
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11-12-2015, 11:29 AM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2013
Posts: 9,358
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Quote:
Originally Posted by Tailgate
Worth the read...
This Woman Just Explained Economics In A Nutshell. And It's So True It Hurts.
...here are the opening paragraphs...
Mary is the proprietor of a bar in Dublin. 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 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).
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That article should be in every high school economics class textbook.
__________________
Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
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11-12-2015, 05:51 PM
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#3
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Thinks s/he gets paid by the post
Join Date: Nov 2013
Location: Bay Area
Posts: 2,745
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+1. Now, I understand the 2008 recession clearly. I understand the Greek issue, too.
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11-12-2015, 07:50 PM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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The above is not too far from the real crisis in 2008.
People should read Michael Lewis's The Big Short: Inside the Doomsday Machine (2010), where he described how in California mortgage lenders loaned out money to even illegal aliens to buy homes with liar loans.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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11-12-2015, 09:14 PM
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#5
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Thinks s/he gets paid by the post
Join Date: Nov 2009
Location: SF East Bay
Posts: 4,342
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I haven't yet read it properly, but was very distracted by the grammatical error in the 4th paragraph. The possessive apostrophe in the word " customers' " is unnecessary.
Believe me, this affliction I have of noticing small details is a right royal PITA sometimes
__________________
Contentedly ER, with 3 furry friends (now, sadly, 1).
Planning my escape to the wide open spaces in my campervan (with my remaining kitty, of course!)
On a mission to become the world's second most boring man.
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11-12-2015, 09:35 PM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2004
Location: the City of Subdued Excitement
Posts: 5,588
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Eats Shoots and Leaves, eh, Major Tom?
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I have outlived most of the people I don't like and I am working on the rest.
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11-12-2015, 09:50 PM
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#7
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Thinks s/he gets paid by the post
Join Date: Nov 2009
Location: SF East Bay
Posts: 4,342
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Precisely. This stuff is important!
__________________
Contentedly ER, with 3 furry friends (now, sadly, 1).
Planning my escape to the wide open spaces in my campervan (with my remaining kitty, of course!)
On a mission to become the world's second most boring man.
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11-13-2015, 04:00 AM
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#8
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2013
Location: Limerick
Posts: 5,655
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And the upcoming $1.3 trillion student loan crisis...and the $63 trillion unfunded debt crisis...
Sent from my iPad using Early Retirement Forum
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11-13-2015, 06:08 AM
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#9
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Full time employment: Posting here.
Join Date: Apr 2013
Posts: 834
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Loved that article.
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The Constitution. It's not just a good idea...it's the law.
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11-13-2015, 08:07 AM
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#10
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Full time employment: Posting here.
Join Date: Jan 2008
Posts: 759
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free guinness at a dublin pub. Sounds like heaven on earth. I'm there!
__________________
Retired July 2013 at age 49.
Lazy Portfolio Investor:
AA: 55% Stocks
35% Bonds
10% Cash
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11-13-2015, 01:43 PM
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#11
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Moderator
Join Date: Dec 2007
Location: Eastern WV Panhandle
Posts: 25,340
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Quote:
Originally Posted by NW-Bound
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I read that book and it is astonishing what they did. In one instance the bank loaned a lettuce picker making $7/hour enough money to buy a $700k house! (I think those were the numbers but it was similarly outrageous.) Clearly there's no way that loan is going to be repaid.
But then they could bundle up the loans and sell them, truthfully saying they were mortgage backed securities.
And no one went to jail for it.
__________________
When I was a kid I wanted to be older. This is not what I expected.
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11-13-2015, 02:42 PM
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#12
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Thinks s/he gets paid by the post
Join Date: Nov 2013
Location: Bay Area
Posts: 2,745
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Quote:
Originally Posted by Walt34
I read that book and it is astonishing what they did. In one instance the bank loaned a lettuce picker making $7/hour enough money to buy a $700k house! (I think those were the numbers but it was similarly outrageous.) Clearly there's no way that loan is going to be repaid.
But then they could bundle up the loans and sell them, truthfully saying they were mortgage backed securities.
And no one went to jail for it.
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I felt like I went to jail for it when everything came crashing down. I've heard stories of people buying multiple houses, and declare bankruptcy even if they have money to pay back. The rest of us paid for their greed, misjudgment, ...
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11-13-2015, 03:39 PM
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#13
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 14,183
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There was plenty of guilt to go around...
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Have Funds, Will Retire
...not doing anything of true substance...
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11-13-2015, 03:45 PM
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#14
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Thinks s/he gets paid by the post
Join Date: May 2014
Location: Utrecht
Posts: 2,650
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Fond of this cartoon for a simple explanation of everything financial:
8373.jpg Photo by sw_coder | Photobucket
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11-13-2015, 04:50 PM
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#15
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2007
Posts: 14,328
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Quote:
Originally Posted by HFWR
There was plenty of guilt to go around...
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Right. Let's start with that lettuce picker.
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11-14-2015, 09:44 PM
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#16
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 14,183
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Quote:
Originally Posted by travelover
Right. Let's start with that lettuce picker.
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I wasn't necessarily picking on the lettuce picker.
I realize that some aren't sophisticated about things financial, and thus might not have understood exactly what they were getting into. And, well some just got caught up in the tulip, er, uh, housing craze, because, you know, housing never goes down. But the bankers coulda/shoulda been the adults in the room. Except, of course, OPM. No risk management, nod-and-wink credit ratings, lax or non-existent regulation, excessive leverage; so, yeah, lots of blame to go around, but not many perp walks...
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Have Funds, Will Retire
...not doing anything of true substance...
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11-15-2015, 03:52 AM
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#17
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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In a recent interview, Bernanke is quoted as saying somebody should have gone to jail over the mortgage fiasco in 2008-2009. Of course nobody did.
The problem was so pervasive that if we tracked down to the brokers who helped ineligible borrowers obtain the liar loans, it would take a lot of money and manpower. And we might even have to build more jails. So, they walked free, and the taxpayers picked up the tab.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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11-15-2015, 08:11 AM
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#18
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2007
Posts: 14,328
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Quote:
Originally Posted by HFWR
I wasn't necessarily picking on the lettuce picker. ......
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Sorry, forgot to turn on the sarcasm font.
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11-15-2015, 08:23 AM
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#19
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,145
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Quote:
Originally Posted by travelover
Right. Let's start with that lettuce picker.
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Quote:
Originally Posted by travelover
Sorry, forgot to turn on the sarcasm font.
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I'm glad you said that because I was thinking - really?!?
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Retired since summer 1999.
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11-15-2015, 10:48 AM
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#20
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2007
Posts: 14,328
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Quote:
Originally Posted by audreyh1
I'm glad you said that because I was thinking - really?!?
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Well, some people are too big to jail, so ya gotta prosecute somebody.
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