Asian twist to explainig the financial crisis..

Discussion in 'Financial Cents' started by ghrit, Dec 8, 2010.


  1. ghrit

    ghrit Ambulatory anachronism Administrator Founding Member

    One day, a plain-looking man came with a pretty-looking
    office lady to the LV store in Causeway Bay Hong Kong
    Island.

    He chose an LV bag worth HKD 65,000 for the office lady.
    When it came time to pay, the man took out a cheque
    book and wrote out a cheque.

    The salesperson was hesitant because the couple hadn't
    shopped there before.

    The man discerned what the salesperson was thinking and
    he said calmly: "I sense that you are concerned that this
    cheque may bounce, right? Today is Saturday and the
    banks are closed.

    Let me suggest that I leave the cheque and the handbag
    here. When the cheque clears on Monday, you can deliver
    the handbag to this lady. How about that?


    The salesperson was reassured and gladly accepted the
    suggestion. In addition, he waived the delivery charges. He
    promised that he would personally make sure that this gets
    done.

    On Monday, the salesperson took the cheque to the bank.

    The cheque bounced!


    The irate salesperson called up the client, who told him:
    "What is the big deal? Neither you nor I have suffered any
    loss. Last Saturday night, I went to bed with that girl
    already! Oh, by the way, I thank you for your cooperation
    ."

    This story reveals the nature of the sub-prime mortgage
    crisis. When people have high hopes for huge future returns,
    they lower their guard about the potential risks.

    This pretty girl thought that the HKD 65,000 LV bag was
    going to come home on Monday, and so she lowered her
    guard. Therefore, she believed that her investment in the
    ONE NIGHT STAND was worth it even though it was based
    upon huge and highly uncertain risks.


    Investment companies are great with packaging high return
    (but high risk) deals.

    The Chinese stock speculators are like this pretty woman. They never

    learn. As for the media and the stock analysts, they often play the role of the LV salesperson.
     
  2. alanz

    alanz Monkey+

    Interesting perspective. And just imagine how angry that girl will be when she doesn't get her purse. eek3
     
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