By James Clarke, The **Star Newspaper Johannesburg.** {Stoep Talk -
ALWAYS worth reading}
Thank goodness somebody has explained to me what is going on regarding
banks, and why they've run out of money.
BBC News has broadcast the following conversation from a banker:
"So, you want to withdraw the money you deposited with us? Yes, well,
I'm afraid we can't give you back your money because we don't have it.
"You see, what happened is that we lent the money you gave us to
(people) to buy houses, and then we lent them some more money to buy a
second property on a buy-to-let basis, and a third rental property too,
and then we lent them some more money against the value of all the
various properties that we'd lent them the money to buy, so they could
go on a nice holiday.
"In fact, the money you'd deposited with us wasn't enough for all the
money we'd encouraged them to borrow, so we packaged up their mortgages
and sold them on to some other people, so that we'd have more money to
lend more people to buy more houses.
"Are you with me?
"The problem is that the property market has crashed so that (the
people) can't repay the mortgages on their houses, which means that
everyone who bought those bonds is stuffed.
"Which unfortunately includes us, as we also bought mortgage-backed
bonds off other banks, thinking we could sell them on to someone else
for more money.
"So we no longer have any money, and we're now perceived as a bad risk
in the wholesale money markets, so none of the other banks will lend us
any money, which they haven't got in any case, because no one will lend
them any money, because everyone's too paranoid about everyone else
being a bad risk.
"So I'm afraid we're going into liquidation, but that nice Mr Potter in
town will give you 12 pence in the pound for your money, which I think
you'll agree is a pretty good return on a triple-A-rated bond these days.
"But there is some good news.
"We won't be cluttering up your mail box with all that junk mail
offering cheap mortgages and low-interest credit cards like we used to,
so at least we'll be doing our bit for the environment, which I'm sure
you'll agree is the most important thing."
Regarding the American meltdown, Dr Marc Faber, the Swiss-born,
Thai-domiciled, cynically disposed investment adviser wrote:
"The federal government is sending each of us a $600 rebate. If we spend
that money at Wal-Mart, the money goes to China. If we spend it on
gasoline it goes to the Arabs. If we buy a computer it will go to India.
"If we purchase fruit and vegetables it will go to Mexico, Honduras and
Guatemala.
"If we purchase a good car it will go to Germany. If we purchase useless
crap it will go to Taiwan, and none of it will help the American economy.
"The only way to keep that money here at home is to spend it on
prostitutes and beer, since these are the only products still produced
in US."
A reader, Hugh Lazarus, says "Now for Japan.
"Already, the Origami Bank had folded; the Sumo Bank has gone belly-up;
Bonsai Bank is cutting back branches;
Karaoke Bank is up for sale and going for a song; shares in Kamikaze
Bank have nose-dived, and 500 jobs at Karate Bank will be chopped.
"And there's something fishy going on at Sushi Bank."
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