[FoRK] Two Cows...
Adam L Beberg
<beberg at mithral.com> on
Sun Aug 12 10:29:24 PDT 2007
A perfect description of the sub-prime housing mess, if you start with
"You short sell two cows, so now ..."
"Capitalism - Enron
... you have two cows. You sell three of them to your publicly
listed company, using letters of credit opened by your brother-in-law at
the bank. He then executes a debt/equity swap with an associated general
offer so that you get all four cows back, with a tax exemption for five
cows. The milk rights of the six cows are transferred via an
intermediary to a Cayman Island company secretly owned by your CFO who
sells the rights to all seven cows back to your listed company. The
annual report says the company owns eight cows, with an option on six
more. The public buys your bull. Now all this makes it look like you
have 17 cows, but you really owe this guy five cows."
Actually that pretty much sums up our entire financial system of fiat
currency, rather well too.
Adam L. Beberg
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