The financial crisis explained in simple terms.....


Heidi is the proprietor of a bar in Berlin. 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 of the
bank, (subsequently, of course, fired due his negativity), decides that
surely 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. And, for the icing on the
cake - the funds required for this purpose are obtained by a tax levied on
non-drinkers.

Dimitri