February 6, 2009

John Carney describes what got us into this mess:

You have two cows.

John Paulson borrows one cow so he can sell it for $100. He gives you $10 as collateral.

You buy your neighbors cow for $100, which you finance by taking out a $90 loan from the bank and use John's $10 to make up the rest.

You brag to everyone about your financial health. You have assets--two cows you own, plus one Paulson owes you--worth $300, and liabilities of just $100.

A third of the country goes vegetarian.

You really should read it all.

2 comments:

Rogue Medic said...

You had to go and put in your 0.0002 cents. :-)

This is one of the reasons economic projections are so silly.

They are just another form of Witchcraft. The smoke, mirrors, and willful self deception - on the part of the believers - lead to just more of what caused the problem. And it isn't genius, competence, or foresight.

Rogue Medic said...

Here is some more humor along the same lines.

Oh No, Timmy !