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May 14th, 2009

May. 14th, 2009

Nicked from daddy_guido and reposted for the delight of my fellow Seattle U students, and anyone else who might enjoy an analogous look at the mortgage loan mess.

Derivative markets .... an understandable explanation: Cut because I careCollapse )
Regarding source - I haven't found it yet. My Google-fu is medium to good, but the earliest post I've found with this is March 21, 2009, and that blog is an accumulation of hilarious but unattributed copy.

Solving the Global financial crisis

Nicked from the same blog as mentioned in the last post, here's a delightful example of where money in the right place at the right time can really help things:

In a small town on the South Coast of France, the holiday season is in full swing, but it is raining so there is not too much business taking place.
Everyone is heavily in debt.

Luckily, a rich Russian tourist arrives in the foyer of the small local hotel. He asks for a room and puts a Euro100 note on the reception counter, takes a key and goes to inspect the room located up the stairs on the third floor.

The hotel owner takes the banknote in a hurry and rushes to his meat supplier to whom he owes E100.
The butcher takes the money and races to his supplier to pay his debt.
The wholesaler rushes to the farmer to pay E100 for pigs he purchased some time ago.
The farmer triumphantly gives the E100 note to a local prostitute who gave him her services on credit.
The prostitute quickly goes to the hotel, as she was owing the hotel for her hourly room used to entertain clients.

At that moment, the rich Russian comes down to reception and informs the hotel owner that the room is unsatisfactory and takes his E100 back and departs.

There was no profit or income. But everyone no longer has any debt and the small town’s people look optimistically towards their future.
Could this be the solution to the global financial crisis?
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Now, back to doing actual MBA stuff....

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alicebentley
Alice Bentley

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