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The economy explained..
Old 11-12-2015, 09:00 AM   #1
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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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Old 11-12-2015, 12:29 PM   #2
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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).
That article should be in every high school economics class textbook.
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Old 11-12-2015, 06:51 PM   #3
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That article should be in every high school economics class textbook.
+1. Now, I understand the 2008 recession clearly. I understand the Greek issue, too.
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Old 11-12-2015, 08:50 PM   #4
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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.
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Old 11-12-2015, 10:14 PM   #5
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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
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Old 11-12-2015, 10:35 PM   #6
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Eats Shoots and Leaves, eh, Major Tom?
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Old 11-12-2015, 10:50 PM   #7
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Eats Shoots and Leaves, eh, Major Tom?
Precisely. This stuff is important!
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Old 11-13-2015, 05:00 AM   #8
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+1. Now, I understand the 2008 recession clearly. I understand the Greek issue, too.

And the upcoming $1.3 trillion student loan crisis...and the $63 trillion unfunded debt crisis...


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Old 11-13-2015, 07:08 AM   #9
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Loved that article.
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Old 11-13-2015, 09:07 AM   #10
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free guinness at a dublin pub. Sounds like heaven on earth. I'm there!
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Old 11-13-2015, 02:43 PM   #11
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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.
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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Old 11-13-2015, 03:42 PM   #12
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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.
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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Old 11-13-2015, 04:39 PM   #13
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There was plenty of guilt to go around...
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Old 11-13-2015, 04:45 PM   #14
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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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Old 11-13-2015, 05:50 PM   #15
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There was plenty of guilt to go around...
Right. Let's start with that lettuce picker.
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Old 11-14-2015, 10:44 PM   #16
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Right. Let's start with that lettuce picker.

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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Old 11-15-2015, 04:52 AM   #17
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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.
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Old 11-15-2015, 09:11 AM   #18
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I wasn't necessarily picking on the lettuce picker. ......
Sorry, forgot to turn on the sarcasm font.
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Old 11-15-2015, 09:23 AM   #19
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Right. Let's start with that lettuce picker.
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Sorry, forgot to turn on the sarcasm font.
I'm glad you said that because I was thinking - really?!?
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Old 11-15-2015, 11:48 AM   #20
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I'm glad you said that because I was thinking - really?!?
Well, some people are too big to jail, so ya gotta prosecute somebody.
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