Mortgage Backed Securities are like boxes of chocolates. Criminals on Wall Street stole a few chocolates from the boxes and replaced them with turds. Their criminal buddies at Standard & Poor rated these boxes AAA Investment Grade chocolates. These boxes were then sold all over the world to investors.
Eventually somebody bites into a turd and discovers the crime. Suddenly nobody trusts American chocolates anymore worldwide.
Hank Paulson now wants the American taxpayers to buy up and hold all these boxes of turd-infested chocolates for $800 billion dollars until the market for turds returns to normal. Meanwhile, Hank's buddies, the Wall Street criminals who stole all the good chocolates are
not being investigated, arrested, or indicted.
Mama always said: "Sniff the chocolates first, Forrest."
Now here's another classic story illustrating the evils of gambling and betting...
An elderly woman walked into the Bank of Canada one morning with a purse full of money. She wanted to open a savings account and insisted on talking to the president of the Bank because, she said, she had a lot of money.
After many lengthy discussions (after all, the client is always right) an employee took the elderly woman to the president's office. The president of the Bank asked her how much she wanted to deposit. She placed her purse on his desk and replied, "$165,000."
The president was curious and asked her how she had been able to save so much money. The elderly woman replied that she made bets.
The president was surprised and asked, "What kind of bets?"
The elderly woman replied, "Well, I bet you $25,000 that your testicles are square.'"
The president started to laugh and told the woman that it was impossible to win a bet like that. The woman never batted an eye. She just looked at the president and said, "Would you like to take my bet?"
"Certainly," replied the president. "I bet you $25,000 that my testicles are NOT square.'"
"Done!" the elderly woman answered. "But given the amount of money involved, if you don't mind, I would like to come back at 10 o' clock tomorrow morning with my lawyer as a witness."
"No problem." said the president of the Bank confidently.
That night, the president became very nervous about the bet and spent a long time in front of the mirror examining his testicles, turning them this way and that, checking them over again and again until he was positive that no one could consider his balls as square and reassuring himself that there was no way he could lose the bet.
The next morning at exactly 10 o' clock the elderly woman arrived at the president's office with her lawyer and acknowledged the $25,000 bet made the day before that the president's testicles were square. The president confirmed that the bet was the same as the one made the day before. Then the elderly woman asked him to drop his pants so that she and her lawyer could inspect his balls.
The president readily obliged, anticipating an unexpected windfall of $25,000.
The elderly woman came closer so she could see better and asked the president if she could touch his balls.
"Of course," said the president. "Given the amount of money involved, you should be 100% sure."
The elderly woman did so with a small smile. Suddenly the president noticed that the lawyer was banging his head against the wall. He asked the elderly woman why he was doing that and she replied, "Oh, it's probably because I bet him $125,000 that around 10 o' clock in the morning I would be fondling the balls of the President of the Bank of Canada."
[First published 27 November 2008]
