Sunday Fun: The Bartender

(This was sent in by client, “Dr. M”)

Ruth is the proprietor of a   bar in Chicago. 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 has the good sense to keep   track of the drinks consumed, with the help of an expensive   point-sale-software program paid for by an SBA loan. These are carried   on the books as “customer loans”.

Word gets around, and new customers flood into   Ruth’s bar.<!–more–>

Taking advantage of her customers’ freedom   from immediate payment constraints, Ruth 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 Ruth’s credit limit.He sees no reason for   undue concern since he has taken an assignment of 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 (subsequently fired due to his   negativity) decides that the time has come to   demand payment of the debts owed by the patrons of Ruth’s bar.   However, very few are able to pay   back the debts and Ruth becomes   unable to keep up her loan payments. Within a short time she   files bankruptcy.

DRINKBOND and ALKBOND drop in price by 95   %. PUKEBOND performs better, stabilizing in price after dropping by 80 %.

The   suppliers of Ruth’s bar, having granted her generous payment terms, are   now in trouble. Her wine supplier   claims bankruptcy; her beer supplier is taken over by a competitor.

The bank gets saved by the Government   following dramatic round-the-clock consultations between leaders of the governing   political parties.

The funds required for this purpose are   obtained by taxes levied on the non-drinkers.

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