Apr 28, 2009

Wall Street Explained

This is the simple version.........

If you have difficulty understanding the current world financial
situation, the following should help...

Once upon a time in a village somewhere, a man announced to the
villagers that he would buy monkeys for $10.

The villagers seeing there were many monkeys around, went out to the
forest and started catching them.
The man bought thousands at $10, but, as the supply started to diminish,
the villagers stopped their efforts.

The man further announced that he would now buy at $20. This renewed the
efforts of the villagers and they started catching monkeys again.

Soon the supply diminished even further and people started going back to
their farms. The offer rate increased to $25 and the supply of monkeys
became so little that it was an effort to even see a monkey, let alone
catch it!

The man now announced that he would buy monkeys at $50! However, since
he had to go to the city on some business, his assistant would now act
as buyer, on his behalf.

In the absence of the man, the assistant told the villagers: 'Look at
all these monkeys in the big cage that the man has collected. I will
sell them to you at $35 and when he returns from the city, you can sell
them back to him for $50.'

The villagers squeezed together their savings and bought all the

Then they never saw the man or his assistant again, only monkeys
everywhere! Welcome to WALL STREET!

1 comment:

  1. Anonymous10 May, 2009

    That is a nice explaination!