Rescuing the Economy, One Monkey at a Time
Got this from cousin Mike…
Once upon a time a man appeared in a village and announced to the villagers that he would buy monkeys for $10 each. The villagers, seeing that there were many monkeys around, went out to the forest and began catching them. The man bought thousands at $10 but, as the supply began to diminish, the villagers stopped their effort.
So the man announced that he would now buy monkeys at $20 each. This renewed the efforts of the villagers and they started catching monkeys again. But again, as the supply diminished even further, the villagers returned to their farms.
When the offer was increased to $25 each, the supply of monkeys became so scarce that it was an effort to even find one, let alone catch it!
So the man announced that he would buy monkeys at $50 each, adding that, since he had to go to the city on business, his assistant would buy on his behalf.
In his absence, the assistant told the villagers, “Look at all these monkeys in the big cage that the man has already collected. I will sell them to you at $35 each and, when the man returns from the city, you can sell them to him for $50 each.” The villagers rounded up all their savings and bought all the monkeys for $700 Billion. They never saw the man or his assistant again, only lots and lots of monkeys!
Now you have a better understanding of the federal Wall Street bailout.
Reader Comments (10)
Very funny but sadly true.
Sad but true :)
Sorry, I don't quite get this. Do you mean we are in for an flood of monkeys?
Figuratively, yes. The value of monkeys plummeted and Wall Street came along with a bailout.
The man and his assistant drove up the price of monkeys to an exaggerated price, then sold them to buyers who hoped to make a windfall profit down the road but were instead left with a bunch of monkeys for which there was no market.
The difference is that, in the real case, the "man and his assistant" received a federal bailout when the people abandoned their monkeys.
OK, I don't feel so bad. The analogy is a little off the mark, it's not me.
It shows how markets can easily be manipulated.
It is a bailout of the people who overpaid for their monkeys in the sense that they were able to walk away like the home owners who abandoned their homes. The difference is that the people didn't owe a mortgage on the monkeys. It is a better example of market manipulation and its effect on economies.
Not the best parallel but a cute story nonetheless.
Good story. We are so screwed.