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 to his negativity)

decides that finally 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.

The funds required for this purpose are obtained by a

tax levied on the non-drinkers.