It’s the stupid economy.
Posted in Corporate Angst, Subversive Musings on January 18th, 2009A couple of funny things came up regarding the economy today that I thought I’d share.
First off, I got an idea that would probably make a ridiculously complicated game, but maybe a funny skit: Monopoly: 2008 Economics Edition! It would go something like this:
I own the Electric Company, and you own the B&O Railroad. You need some extra cash, so I’ll buy the rail lines from you and lease them back to you for for 50 years. I can now add that projected long-term income to my balance sheet and use that to float a loan to buy the Water Works, issue more shares, and then borrow from the bank to buy back the shares I just issued. The bank then converts that loan into an equity investment which allows me to issue even more shares which I use as leverage to buy hotels on the Boardwalk. These hotels are committed to purchasing water and power from my own utilities, therefore I can again add some projected long-term income to my balance sheet, get another loan from the bank, buy the Free Parking Lot and convert it to a condominium development and shopping complex. The bank doesn’t have any money to loan for this project, so it creates an investment vehicle that it can sell to its retirement-plan clients. Everything works swimmingly until the next person passes “Go,” discovers the bank doesn’t have $200, and nobody wants to play anymore.
The other amusing thing that came up today was something a friend sent me via email from the Edmonton Sun:
“If you’d bought $1,000 of Nortel stock a year ago, it’d be worth $49 today. A thousand bucks of CanWest Global 12 months ago would fetch $80 today. WorldCom stock? Now worth $5. But had you purchased $1,000 of cheap wine a year ago and drank it all, the bottle depot would give you $100 for the empties. Based on the above, the best current investment advice is to drink heavily and recycle.”
