Matrix is the blending of economics, real estate and of course, farm animals. Here’s the latest low-brow explanation of how the bailout works, as passed around that series of tubes (Hat tip to Marty).

So here goes:

Young Chuck moved to Texas and bought a donkey from a farmer for $100.
The farmer agreed to deliver the donkey the next day.

The next day he drove up and said, ‘Sorry son, but I have some bad news, the donkey died.’

Chuck replied, ‘Well, then just give me my money back.’ The farmer said, ‘Can’t do that. I went and spent it already.’

Chuck said, ‘Ok, then, just bring me the dead donkey.’ The farmer asked, ‘What ya gonna do with him? Chuck said, ‘I’m going to raffle him off.’ The farmer said You can’t raffle off a dead donkey!’ Chuck said, ‘Sure I can – watch me. I just won’t tell anybody he’s dead.’

A month later, the farmer met up with Chuck and asked, ‘What happened with that dead donkey?’ Chuck said, ‘I raffled him off. I sold 500 tickets at two dollars a piece and made a profit of $998.’ The farmer said, ‘Didn’t anyone complain?’ Chuck said, ‘Just the guy who won. So I gave him his two dollars back.’

Chuck now works for Goldman Sachs.

Tags: ,

One Response to “[Jackass Analogy] Securitization Explained”

  1. Edd Gillespie says:

    Thanks for that. Let’s endeavor to keep the responsibility for this mess exactly where it belongs. I do think our representaives are trying to provide a soft landing for the MSB, CDO, Defalut bet investment types by convincing us we are in it too. I am hearing that this went beyond ommitting the fact the donkey was dead it was indeed represented that he was alive and kicking. Does anybody know where we get enough money to get the mortgage machine going again unless we go to the liars?