sean is the proprietor of a bar in dublin. he realises that nearly all his customers have become unemployed alcoholics and can no longer afford to patronise his bar. to solve this problem, he comes up with a new marketing strategy that allows his customers to drink now and pay later. cleverly, he keeps track of all the drinks consumed by whom on a ledger (obviously on a computer with all the data on the individual drinkers) and thereby granting them loans.
word gets around fast about sean's drink now pay later bar and very quickly, sean has the highest volume of wet sales outside of lansdown road rugby ground. his suppliers grant him longer credit terms and lower prices. by providing his customers freedom from imediate payment, sean gets no resistance when he frequently increases his prices.
sean's gross sales volume increase becomes exponential and hard to finance with sean's limited reserve's, so he goes to his bank to ask for an increase on his overdraft. a young dynamic vice-president at the bank recognises that these customer debt's constitute valuable future assets and increases sean's borrowing limit. the bank see's no problem as the debt is secured by unemployed fixed income alcoholic drinkers.
at the bank's corporate headquarters, expert trader's figure a way to trade the debt on at a profit and make massive commissions and transform these loans into long term, high yeild collaterised debt obligations known as DRINKBONDS, ALKIBONDS and PUKEBONDS. they have their credit rating agency rate these securities as triple A and sell them on in the international securities market to other bank's......
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sean's bar
19th Dec 2010 - 2:30am
flower411 wrote:
The thing is .... the current financial system not being the best is the biggest understatement going !!!
Half the world is starving and/or without reliable clean water ...some of us would argue that this is something that the bankers would like to encourage and would hate to see a system that tried to do anything about the problem ....but that`s another thread !!
There is absolute proof that the current system does not work for the majority of the people but when I propose ideas that are contrary to the current policies involving constant debt creation you start asking me to dot the I`s and cross the T`s ....
I can`t
.....I`m suggesting ideas that might put us in a position where we can feed the world rather than bleed it dry ..... but I can see that having a new car every three years and updating ya Xbox every so often is far more important .
The thing is .... the current financial system not being the best is the biggest understatement going !!!
Half the world is starving and/or without reliable clean water ...some of us would argue that this is something that the bankers would like to encourage and would hate to see a system that tried to do anything about the problem ....but that`s another thread !!
There is absolute proof that the current system does not work for the majority of the people but when I propose ideas that are contrary to the current policies involving constant debt creation you start asking me to dot the I`s and cross the T`s ....
I can`t
.....I`m suggesting ideas that might put us in a position where we can feed the world rather than bleed it dry ..... but I can see that having a new car every three years and updating ya Xbox every so often is far more important .
At least you are suggesting alternatives though, not just spouting big words in capital letters.
flower411 wrote:
The thing is .... the current financial system not being the best is the biggest understatement going !!!
Half the world is starving and/or without reliable clean water ...some of us would argue that this is something that the bankers would like to encourage and would hate to see a system that tried to do anything about the problem ....but that`s another thread !!
There is absolute proof that the current system does not work for the majority of the people but when I propose ideas that are contrary to the current policies involving constant debt creation you start asking me to dot the I`s and cross the T`s ....
I can`t
.....I`m suggesting ideas that might put us in a position where we can feed the world rather than bleed it dry ..... but I can see that having a new car every three years and updating ya Xbox every so often is far more important .
The thing is .... the current financial system not being the best is the biggest understatement going !!!
Half the world is starving and/or without reliable clean water ...some of us would argue that this is something that the bankers would like to encourage and would hate to see a system that tried to do anything about the problem ....but that`s another thread !!
There is absolute proof that the current system does not work for the majority of the people but when I propose ideas that are contrary to the current policies involving constant debt creation you start asking me to dot the I`s and cross the T`s ....
I can`t
.....I`m suggesting ideas that might put us in a position where we can feed the world rather than bleed it dry ..... but I can see that having a new car every three years and updating ya Xbox every so often is far more important .
Ahhhhh now I see what you are saying. You are guilty that people are dying in the world for lack of clean water and enough food and you worry about changing your car and x-box each year.
As it is that time of year, there was a guy who once said that you should give all you have to those that need it. This is one option that all of has to take on their own. It would be very charitable for those to do it. But how many would. This option has been available for 2000 years, but not many has taken up the call. There have been many but not everybody.
Getting back to the banking system, and seeing Guls bit about Seans bar, there seems to be one thing that was different in this financial crisis which has been different in other crisis. This time the governments have bailed out the banks in an attempt to stop the economy crashing.
This seems to be the problem. Should it have been allowed to crash and let all the debt be wrote off? Take all the hardships and start again a few years down the line. Or do what they are doing now.
There will be two takes on this and it will be dependant on whether you have anything to lose in the crisis or not to which way you would prefer it to go.
Dave_Notts
Re: sean's bar
19th Dec 2010 - 11:55pm
gulsonroad30664 wrote:
sean is the proprietor of a bar in dublin. he realises that nearly all his customers have become unemployed alcoholics and can no longer afford to patronise his bar. to solve this problem, he comes up with a new marketing strategy that allows his customers to drink now and pay later. cleverly, he keeps track of all the drinks consumed by whom on a ledger (obviously on a computer with all the data on the individual drinkers) and thereby granting them loans.
word gets around fast about sean's drink now pay later bar and very quickly, sean has the highest volume of wet sales outside of lansdown road rugby ground. his suppliers grant him longer credit terms and lower prices. by providing his customers freedom from imediate payment, sean gets no resistance when he frequently increases his prices.
sean's gross sales volume increase becomes exponential and hard to finance with sean's limited reserve's, so he goes to his bank to ask for an increase on his overdraft. a young dynamic vice-president at the bank recognises that these customer debt's constitute valuable future assets and increases sean's borrowing limit. the bank see's no problem as the debt is secured by unemployed fixed income alcoholic drinkers.
at the bank's corporate headquarters, expert trader's figure a way to trade the debt on at a profit and make massive commissions and transform these loans into long term, high yeild collaterised debt obligations known as DRINKBONDS, ALKIBONDS and PUKEBONDS. they have their credit rating agency rate these securities as triple A and sell them on in the international securities market to other bank's......
sean is the proprietor of a bar in dublin. he realises that nearly all his customers have become unemployed alcoholics and can no longer afford to patronise his bar. to solve this problem, he comes up with a new marketing strategy that allows his customers to drink now and pay later. cleverly, he keeps track of all the drinks consumed by whom on a ledger (obviously on a computer with all the data on the individual drinkers) and thereby granting them loans.
word gets around fast about sean's drink now pay later bar and very quickly, sean has the highest volume of wet sales outside of lansdown road rugby ground. his suppliers grant him longer credit terms and lower prices. by providing his customers freedom from imediate payment, sean gets no resistance when he frequently increases his prices.
sean's gross sales volume increase becomes exponential and hard to finance with sean's limited reserve's, so he goes to his bank to ask for an increase on his overdraft. a young dynamic vice-president at the bank recognises that these customer debt's constitute valuable future assets and increases sean's borrowing limit. the bank see's no problem as the debt is secured by unemployed fixed income alcoholic drinkers.
at the bank's corporate headquarters, expert trader's figure a way to trade the debt on at a profit and make massive commissions and transform these loans into long term, high yeild collaterised debt obligations known as DRINKBONDS, ALKIBONDS and PUKEBONDS. they have their credit rating agency rate these securities as triple A and sell them on in the international securities market to other bank's......
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 Seans bar. He
so informs Sean.
Sean then demands payment from her alcoholic patrons, but being
unemployed alcoholics they cannot pay back their drinking debts.
Since, Sean cannot fulfil her loan obligations he is forced into
bankruptcy. The bar closes and the eleven employees lose their jobs.
Overnight, DRINKBONDS, ALKIBONDS and PUKEBONDS drop in price by 90%.
The collapsed bond asset value destroys the banks liquidity and
prevents it from issuing new loans, thus freezing credit and economic
activity in the community.
The suppliers of Seans bar had granted 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
the bad debt and with losing over 90% of the presumed value of the
bonds. Seans wine supplier also claims bankruptcy, closing the doors on
a family business that had endured for three generations, his 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
euro 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 Sean’s bar.
Now, do you understand economics in 2010?
Re: sean's bar
20th Dec 2010 - 12:08am
Ben_welshminx wrote:
some stuff
gulsonroad30664 wrote:
some stuff
some stuff
some stuff
You have both simply expalined what the problem is and what the solution the government has done to overcome this crisis.
I might be wrong but the whole point of this thread was that some people were going to add some credible alternatives as the one the governments went for was so wrong.
So far I have seen none. Nothing that could be commented on and I would be able to say "Ohhhh thats a good idea. Why don't I lobby my MP to do this instead." All I have seen is woe betide us we all going downhill. I may as well go see the guy in the highstreet with the sandwich boards saying the end of the world is nigh.
Dave_Notts
I simply finished off the earlier post for tidiness.
As I posted earlier --the traditional way out of depressions is war. I am hopeful that cleverer and more influential folk than me will devise an alternative solution this time. Such a solution will require co-operation at international level. Who knows we might even see human beings working together towards common goals internationally. I doubt it simply because like flower said, the fundamental, that we are in deep deep shit, isn't widely understood yet which makes the will to work together weak. War is a simpler and much more widely understood solution.
As I posted earlier --the traditional way out of depressions is war. I am hopeful that cleverer and more influential folk than me will devise an alternative solution this time. Such a solution will require co-operation at international level. Who knows we might even see human beings working together towards common goals internationally. I doubt it simply because like flower said, the fundamental, that we are in deep deep shit, isn't widely understood yet which makes the will to work together weak. War is a simpler and much more widely understood solution.
Ben_welshminx wrote:
I simply finished off the earlier post for tidiness.
As I posted earlier --the traditional way out of depressions is war. I am hopeful that cleverer and more influential folk than me will devise an alternative solution this time. Such a solution will require co-operation at international level. Who knows we might even see human beings working together towards common goals internationally. I doubt it simply because like flower said, the fundamental, that we are in deep deep shit, isn't widely understood yet which makes the will to work together weak. War is a simpler and much more widely understood solution.
I simply finished off the earlier post for tidiness.
As I posted earlier --the traditional way out of depressions is war. I am hopeful that cleverer and more influential folk than me will devise an alternative solution this time. Such a solution will require co-operation at international level. Who knows we might even see human beings working together towards common goals internationally. I doubt it simply because like flower said, the fundamental, that we are in deep deep shit, isn't widely understood yet which makes the will to work together weak. War is a simpler and much more widely understood solution.
It certainly tidied it up and hopefully made it a lot easier to understand, as it did to me.
Is war the way out of depressions Ben, or is it one of the causes of depression? The link you put up with the graph on illustrated times where there were lots of big wars going on, so trade was cut and extra spending had to go on war material than investing in civil projects.
As for working together, until the them and us mentality has been removed then the one world solution will never be an alternative. For this to work we have to get rid of national identity and have one government, one cause, possibly one religion, for everyone to pull together. It simply means to me, that there has to be dominance by one, and this has never worked in history, it eventually falls even though it showed growth and abundance in its early years e.g. Persian, Roman, British empires.
Dave_Notts
Re: sean's bar
20th Dec 2010 - 8:03am
Ben_welshminx wrote:
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 Seans bar. He
so informs Sean.
Sean then demands payment from her alcoholic patrons, but being
unemployed alcoholics they cannot pay back their drinking debts.
Since, Sean cannot fulfil her loan obligations he is forced into
bankruptcy. The bar closes and the eleven employees lose their jobs.
Overnight, DRINKBONDS, ALKIBONDS and PUKEBONDS drop in price by 90%.
The collapsed bond asset value destroys the banks liquidity and
prevents it from issuing new loans, thus freezing credit and economic
activity in the community.
The suppliers of Seans bar had granted 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
the bad debt and with losing over 90% of the presumed value of the
bonds. Seans wine supplier also claims bankruptcy, closing the doors on
a family business that had endured for three generations, his 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
euro 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 Sean’s bar.
Now, do you understand economics in 2010?
gulsonroad30664 wrote:
sean is the proprietor of a bar in dublin. he realises that nearly all his customers have become unemployed alcoholics and can no longer afford to patronise his bar. to solve this problem, he comes up with a new marketing strategy that allows his customers to drink now and pay later. cleverly, he keeps track of all the drinks consumed by whom on a ledger (obviously on a computer with all the data on the individual drinkers) and thereby granting them loans.
word gets around fast about sean's drink now pay later bar and very quickly, sean has the highest volume of wet sales outside of lansdown road rugby ground. his suppliers grant him longer credit terms and lower prices. by providing his customers freedom from imediate payment, sean gets no resistance when he frequently increases his prices.
sean's gross sales volume increase becomes exponential and hard to finance with sean's limited reserve's, so he goes to his bank to ask for an increase on his overdraft. a young dynamic vice-president at the bank recognises that these customer debt's constitute valuable future assets and increases sean's borrowing limit. the bank see's no problem as the debt is secured by unemployed fixed income alcoholic drinkers.
at the bank's corporate headquarters, expert trader's figure a way to trade the debt on at a profit and make massive commissions and transform these loans into long term, high yeild collaterised debt obligations known as DRINKBONDS, ALKIBONDS and PUKEBONDS. they have their credit rating agency rate these securities as triple A and sell them on in the international securities market to other bank's......
sean is the proprietor of a bar in dublin. he realises that nearly all his customers have become unemployed alcoholics and can no longer afford to patronise his bar. to solve this problem, he comes up with a new marketing strategy that allows his customers to drink now and pay later. cleverly, he keeps track of all the drinks consumed by whom on a ledger (obviously on a computer with all the data on the individual drinkers) and thereby granting them loans.
word gets around fast about sean's drink now pay later bar and very quickly, sean has the highest volume of wet sales outside of lansdown road rugby ground. his suppliers grant him longer credit terms and lower prices. by providing his customers freedom from imediate payment, sean gets no resistance when he frequently increases his prices.
sean's gross sales volume increase becomes exponential and hard to finance with sean's limited reserve's, so he goes to his bank to ask for an increase on his overdraft. a young dynamic vice-president at the bank recognises that these customer debt's constitute valuable future assets and increases sean's borrowing limit. the bank see's no problem as the debt is secured by unemployed fixed income alcoholic drinkers.
at the bank's corporate headquarters, expert trader's figure a way to trade the debt on at a profit and make massive commissions and transform these loans into long term, high yeild collaterised debt obligations known as DRINKBONDS, ALKIBONDS and PUKEBONDS. they have their credit rating agency rate these securities as triple A and sell them on in the international securities market to other bank's......
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 Seans bar. He
so informs Sean.
Sean then demands payment from her alcoholic patrons, but being
unemployed alcoholics they cannot pay back their drinking debts.
Since, Sean cannot fulfil her loan obligations he is forced into
bankruptcy. The bar closes and the eleven employees lose their jobs.
Overnight, DRINKBONDS, ALKIBONDS and PUKEBONDS drop in price by 90%.
The collapsed bond asset value destroys the banks liquidity and
prevents it from issuing new loans, thus freezing credit and economic
activity in the community.
The suppliers of Seans bar had granted 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
the bad debt and with losing over 90% of the presumed value of the
bonds. Seans wine supplier also claims bankruptcy, closing the doors on
a family business that had endured for three generations, his 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
euro 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 Sean’s bar.
Now, do you understand economics in 2010?
At least Mary realised the problem and managed to sell her bar to to Sean before the banks pulled the plug!
http://www.iii.co.uk/investment/detail?code=cotn%3ABKIR.L&display=discussion&thread=7469070&action=list
See the first post, timed at Sat 9.22........now, who is who claims never to cut and paste
Re: sean's bar
20th Dec 2010 - 8:56am
Max777 wrote:
At least Mary realised the problem and managed to sell her bar to to Sean before the banks pulled the plug!
http://www.iii.co.uk/investment/detail?code=cotn%3ABKIR.L&display=discussion&thread=7469070&action=list
See the first post, timed at Sat 9.22........now, who is who claims never to cut and paste
At least Mary realised the problem and managed to sell her bar to to Sean before the banks pulled the plug!
http://www.iii.co.uk/investment/detail?code=cotn%3ABKIR.L&display=discussion&thread=7469070&action=list
See the first post, timed at Sat 9.22........now, who is who claims never to cut and paste
Rogue_traderI need to get out more- Joined:
- 10 Jun 2007
- Posts:
- 290
- Location:
- sitting here,
minding my own
business
Fixing the problem was the order of the day and not highlighting what the problem was, as most people were quite aware it was the banks that caused the problem.
1. Money was "loaned" to the banks to make them fluid, do not call it bail out or capital injection call it what it is...a loan.
2. Freeze mortgage and savings interest rates, so banks can not pay the loans through overcharging the working man, who paid for their loans in the first place.
3. The banks have to pay the loans back over a fixed period i.e. 5 years or 10 years
4. Failure to agree to pay causes immediate foreclosure on the bank, all assets become property of HMCG, all accounts are underwirtten by Bank of England therefore no personloses out.
The banks are making profit again, we "own" this profit and the loans should be paid back from it. there is no problem with a business breaking even year after year until its loans are paid off then it can run free again.
1. Money was "loaned" to the banks to make them fluid, do not call it bail out or capital injection call it what it is...a loan.
2. Freeze mortgage and savings interest rates, so banks can not pay the loans through overcharging the working man, who paid for their loans in the first place.
3. The banks have to pay the loans back over a fixed period i.e. 5 years or 10 years
4. Failure to agree to pay causes immediate foreclosure on the bank, all assets become property of HMCG, all accounts are underwirtten by Bank of England therefore no personloses out.
The banks are making profit again, we "own" this profit and the loans should be paid back from it. there is no problem with a business breaking even year after year until its loans are paid off then it can run free again.
flower411 wrote:
At least that explains how Sean became a "she" !!
At least that explains how Sean became a "she" !!
I didn't notice that until I re-read it
Dave_Notts
Yeah I didn't bother to try to find the original author. Mary versions are more frequent than Sean versions.
I'm not an economist even on a barrack room level, it all gets way to clever for me.
I think wars cure depressions by providing high employment and production whilst limiting individual spending. So we do a lot but don't throw it all away on buying over priced houses and goods. In essence I spose it forces individuals to make the sacrifices necessary to rebuild the capitalist economy. Tbh I am not even sure such rebuilding is a good idea but I am not holding my breath waiting for a socialist utopia.
Any alternative will involve austerity and will require global co-operation. I think austerity is unacceptable to most at an individual level and global co-operation is unlikely. That's why I worry so much.
What upsets me about the current strategy is that it will hit the poorest hardest, and as it hits the slightly better off there will be an inevitable backlash by the majority against the minorities. There are extreme examples of that in history too of course.
I'm not an economist even on a barrack room level, it all gets way to clever for me.
I think wars cure depressions by providing high employment and production whilst limiting individual spending. So we do a lot but don't throw it all away on buying over priced houses and goods. In essence I spose it forces individuals to make the sacrifices necessary to rebuild the capitalist economy. Tbh I am not even sure such rebuilding is a good idea but I am not holding my breath waiting for a socialist utopia.
Any alternative will involve austerity and will require global co-operation. I think austerity is unacceptable to most at an individual level and global co-operation is unlikely. That's why I worry so much.
What upsets me about the current strategy is that it will hit the poorest hardest, and as it hits the slightly better off there will be an inevitable backlash by the majority against the minorities. There are extreme examples of that in history too of course.
Irish Problem
3rd Jan 2011 - 7:27pm
I was working in Ireland immediately before the credit crunch and was struck by the obvious signs that the economy was overheating and the brakes needed to be applied.
Over the coming weeks, keep an eye on the price of Spanish gilts. I beleive there to be a very strong chance that the money markets will lose confidence in Spain's economy and the price of government paper will plummet.
Why is this likely, and why is this different to reland and Greece ?
The big difference in a Spanish crisis is the size of the economy. Ireland and Greece are small economies, and are easier to rescue.
The ECB will struggle to bail out a big economy like Spain (the IMF will begin to look more reluctant as well). And the irony is that this is likely to be a self-fulfilling prophecy, ie the money markets know the difficulty to rescue such a big economy and so this in itself adds risk to holding Spanish debt.
The outcome?
The stronger economies of Germany and France are not going to let the Euro die. I foresee the Euro split into A and B, or even Euro A,B,C, for the different economies. Each Euro layer will be able to set interest rates, and so avoid the current problems of the Irish, ie not being able to devalue out of the crisis like we have.
This is going to happen over the coming weeks ... watch this space !
Over the coming weeks, keep an eye on the price of Spanish gilts. I beleive there to be a very strong chance that the money markets will lose confidence in Spain's economy and the price of government paper will plummet.
Why is this likely, and why is this different to reland and Greece ?
The big difference in a Spanish crisis is the size of the economy. Ireland and Greece are small economies, and are easier to rescue.
The ECB will struggle to bail out a big economy like Spain (the IMF will begin to look more reluctant as well). And the irony is that this is likely to be a self-fulfilling prophecy, ie the money markets know the difficulty to rescue such a big economy and so this in itself adds risk to holding Spanish debt.
The outcome?
The stronger economies of Germany and France are not going to let the Euro die. I foresee the Euro split into A and B, or even Euro A,B,C, for the different economies. Each Euro layer will be able to set interest rates, and so avoid the current problems of the Irish, ie not being able to devalue out of the crisis like we have.
This is going to happen over the coming weeks ... watch this space !
