by Cuicui » 17/10/08, 09:58
Nice text found in an email. I don't know who wrote it. I invite him to report ...
Subprime crisis: a very simple explanation for those who are still trying to understand
If you do not know the mysteries of international finance and you do not understand anything that is happening at the moment, here is the story of Ginette, friendly bistro owner from whom ... among other things ... start!
So here it is, Mrs. Ginette has a refreshment bar in Bertincourt, in Pas de Calais. To increase her sales, she decides to give credit to her loyal customers, all alcoholics, almost all of whom are long-term unemployed.
Since she sells on credit, Ms. Ginette sees an increase in her attendance and, in addition, can slightly increase the basic prices of "calva" and the red ball.
The young and dynamic manager of the local bank branch, meanwhile, believes that the "slates" of the bar are, after all, recoverable assets, and begins to lend credit to Mrs. Ginette, having the debts of the drunks as collateral.
At the bank's headquarters, experienced traders transform these recoverable assets into CDOs, CMOs, SICAVs, SAMUs, UFOs, SOSs and other financial symbols that no one can understand.
These financial instruments then serve as leverage for the shareholder market and lead, to the NYSE, the City of London, the Frankfurt and Paris stock exchanges, etc., to derivative transactions whose guarantees are completely unknown to all (i.e. .d., slates of the drunks of Mrs. Ginette).
These "derivatives" are then traded for years as if they were very solid and serious securities on the financial markets of 80 countries.
Until the day when someone realizes that the alcoholics of the Bertincourt troquet do not have a round to pay their debts.
Ms. Ginette's refreshment bar goes bankrupt.
And the whole world has it in ....
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