Clearly About Crisis

Mary is the owner of the bar. One day she realizes that all of her customes are unemployed alcoholics, drinking on credit, so she can not longer have this bar, becose it is not profitable.
   To solve this problem, she comes up with a new marketing plan according to which her customers can drink now, but pay later. She writes the amount of consumed alcohol in a special book (providing customers with credit).
   Everybody receives information about Mary*s strategy "drink now, pay later". As a result, the stream of  customers  in the bar increases. Soon her bar shows the largest volume of sales in her city.
    The young president of the local bank recognizes that these customer debts constitute valuable future assets. He increases lending for Mary*s bar. He doesn*t have any reasons to worry becouse he has debts of alcoholics as a pledge.
    At the headquarters of the bank, traders and experts come up with a way to make huge commissions and transform these debts into Alco-bonds. Then these assets begin to be traded on the international securities markets. New investors do not fully understand that these securities, that were sold for them as securities with the highest rating, in reality are the debts of unemployed alcoholics. Paper prices continue to rise, and the assets will soon become the most quickly bought positions i n the country*s brokerage houses.
    One day, even though the bond prices continue to rise, the risk manager decides that the time to demand payment on the debts of alcoholics has come. Mary starts to demand money from her alcoholics, but, being unemployed alcoholics, they can not return their loans. Mary can not fulfill her loan obligations and she is forced to default. Now she is broke. The bar closes and the eleven employes lose their jobs.
    In one night, Alco - bonds lose 90 percent of their value. The volume of such bonds  eliminates bank liquidity and prevents production of new loans, thus freezing credit and all economic activity.
    Suppliers of Mary*s bar find that they have to write off bad debts. They have lost more than 90 percent of the estimated value of the bonds. Her wine suppliers also declares bankruptcy, closing the family business, which fed three family generations.
    A competitor buys her beer suppliers and immediately closes the local plant and lays off 150 workers. Fortunately, the bank, brokerage firm, and their leadership were saved with a multibillion dollar package from their friends in the goverment.
    The money for this rescue package was found by taxing the working middle class who have never looked into Mary*s bar.

                (Translated from Russian).