View Full Version : The Credit Crunch explained

14th Oct 2008, 14:54
Once upon a time in a village, a man appeared and announced to the villagers that he would buy monkeys for $10 each.

The villagers seeing that there were many monkeys around, went out to the forest, and started catching them.

The man bought thousands at $10 and as supply started to diminish, the villagers stopped their effort. He 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 increased to $25 each 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 buy on behalf of him.

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 the man returns from the city, you can sell them to him for $50 each.'

The villagers hurried round with all their savings and bought all the monkeys.

Then they never saw the man nor his assistant again, only bloody monkeys everywhere!

Now you have a better understanding of how the stock market works.

15th Oct 2008, 19:21
Read this in the Times on Tuesday.

The chief of a Native American tribe was asked in the autumn if the winter was going to be cold or mild. Being a 21st century chief he had no idea but said that it was going to be cold and told the people in his village to collect wood.
A few days later he phoned the National Weather Service. " Yes its going to be cold," they told him so he went back and told his people to collect more wood.
A week later he called again "Is it going to be a cold winter?" he asked.
"Yes, very cold," he was told So he went back again and told his people to collect every bit of wood they could find.
Two weeks later he called again. "Yes," he was told, "it is going to be one of the coldest winters ever."
"How can you be so sure?" the chief asked. The weatherman replied, "The Native Americans are collecting wood like crazy."