The current economic crisis explained in lahori style

musalman

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THE CURRENT ECONOMIC CRISIS EXPLAINED

Pajja is the proprietor of a Siri-Paya and Nehari Shop in Lahore.
Sales are low and, in order to increase them, he comes up with a plan
to allow his customers to eat now and pay later. He keeps track of the
meals consumed on a ledger.

Word gets around and as a result increasing numbers of customers flock
to Pajja’s shop. Pajja’s suppliers are delighted and are very willing
to sell more and more raw materials for the meals he prepares. Pajja
shows them his ledger of receivables and they extend him credit.

A young and dynamic customer service consultant at the local bank
recognizes these customer debts as valuable future assets and gives
Pajja a credit line and then increases Pajja’s borrowing limit.

Taking advantage of his customers' freedom from immediate payment
constraints, Pajja jacks up the prices of his Nehari and Siri-Paye.
Customers dont mind as they are not required to pay on the spot. Sales
volume increases massively; Banks and suppliers lend more; Pajja opens
more outlets. He sees no reason for undue concern since he has the
debts of the customers as collateral.

At the bank's corporate headquarters, expert bankers recognize Pajja's
customer loans as assets and transform these customer assets into
BONDS. These negotiable instruments are given exotic names such as
SIRIBOND, PAYABOND, MAGHAZBOND AND BONGBOND. These securities are then
listed on the Stock Exchange and traded on markets worldwide. No one
really understands what the names mean and how the securities are
guaranteed but, nevertheless, as their prices continuously climb, the
securities become top-selling items.

One day, although the prices are still climbing, a credit risk manager
of the bank decides that the time has come to demand payment of one of
the debts incurred by Pajja. Pajja in turn asks his clients to pay up.
One by one they refuse; the clients cannot pay back the debts. Pajja
refuses to serve them any more. The clients stop coming.

Pajja is really screwed now. He cannot fulfill his loan obligations
and therefore claims bankruptcy. All Bonds drop in price by between 80
to 95%.

The suppliers of Pajja, having granted generous payment due dates and
having invested in the securities are faced with similar problems. The
meat supplier defaults on payment to the sheep and cattle supplier and
claims bankruptcy. The atta supplier is taken over by a competitor;
Pajja lays off the cook and staff. Bankruptcies soar, unemployment
mushrooms.

The bank that lent the money in the first place is set to collapse. It
is saved by the Government following dramatic round-the-clock
consultations by leaders from the governing political parties with
Pajja commuting back and forth in his Executive jet and Mercedes
500SEL, brokering the deal.

The funds required to save the economic collapse are obtained by a tax
levied on the citizens, most of whom do not eat Nehari or Siri-paye.

UNDERSTOOD?
 

shiv

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now i get to know how the world got where it is now....thanks to this man
 

EnlightenedMonk

Member of The Month JULY 2009
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Waah Waah.... Kya explanation hai Musalman !!! hehehehehe...
 

Rage

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Mashallah! Zeba nahi kertahe :D
 

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