Do you really think that Billy and Davey were the stupid ones? They are getting all of their losses covered and creamed off plenty of profits, bonuses, and perks before the party stopped. The only stupid ones are the ones who get to buy all of this worthless paper twice: first as investors and now again as taxpayers. The only ones who should be laughing are Billy and Davey, because they won going in and out. And you can't really believe that they didn't know what the end result was going to be!? The financial industry has been running scams like this one for decades. The only difference is the scams just get bigger and bigger, because they keep getting away with them. The next one will be even more massive than this one, because they have learned that all they have to do to own the treasuries of countries is to threaten to crash the global economy. Why do you think the scumbags have pushed Globalization so heavily?

Wow! The financial meltdown explained in one and a half minutes. Thanks Mark. Great one.

it's funny cos it's true.

Mark love this cartoon. But lets face it its going to get worse than better. With more and more compaines wanting more taxpayer bailout money some of these compaines should go under and start up again with someone other running them.

Mark this one is great. When this business got many more billions I ask myself how long is this going to go on. Why bailout these greed bums when others really need this bailout money. The bailout money should have gone to people who have lost everything. The govenment should have help the needed period.

You are on a roll, Mr. Fiore.

Great, Mark. two of the best ever. And that 'frog' story is what really happened... I think (??

Good Job... but you forgot one last part... the AIG guy saying.."If you pull my finger I will make noise and get the gov to pay for it."

SPT

Nice job Mark. Complicated transactions that gamed an unregulated market. The wrong folks are getting punished, but you just said that.

Yes, yes, and you.

A touch of classic. ;)

You didn't quite express the stupidity of the situation accurately.

You see, in real life, Davey wouldn't have been content hocking his rabbit's foot. He'd claim "there's a risk that the rabbit's foot magic might not work". If the magic runs out--no more frogs. He'd go to Angie: "Hey angie, you make frog soup. If Billy runs out of tasty frogs, you're screwed. But, buy my rabbit's foot default swap for a nominal fee. If the rabbit's foot runs out, I'll give you 90 dollars."

Angie likes this idea. She buys the RFDS. Davey smiles. He goes to all the kids in school that make frog soup and does the same thing. He's now making nice monthly premiums on his RFDS portfolio. But wait! He thinks.

He goes to Billy again: "Wouldn't you like to extend your business?"
"Sure!" Cries Billy, "But I need a loan."
"No sweat." Says Davey. Davey goes to Lucy and sells her the RFDS portfolio, then loans the money to Billy. Lucy is rich since she's collecting the interest from all the kids in school making frog soup that she's given start-up loans to.

Then, disaster! The great frogpox scare of '09! Nobody wants to eat anything except the tastiest frogs.

The schoolkids go to Tommy: Use your rabbit's foot magic to make our frogs tasty!

Tommy says: Ask Davey.

Davey says: Don't look at me. It's just a dead rabbit's foot.

The schoolkids say: Pay up on the rabbit's foot default swaps.

Davey says: I don't own them anymore. Lucy does.

Lucy says: I can't make good on the policies. My main depositors are you guys and I loaned all my excess capital to Billy. I'll call in the loan.

Billy says: I can't pay back the loan, nobody is buying my frogs and the darn rabbit's foot doesn't work. Where's Davey?

Davey, meanwhile, is trying to explain to an angry mob why the default on a rabbit's foot default swap he sold to Mikey backed by the interest payments he thought he would be getting from Davey is now worthless.

...

The scenario I just described is a leverage factor of two. AIG, Bear Stearns, and Merrill Lynch were in this up to leveraging factors of 30. They'd issue derivatives on the frogs, and on frog soup, then on the possibility of frog soup shortages, and on the insurance for the possibility of frog soup shortages. They started issuing derivatives based on the premiums of derivatives based on the premiums of derivatives based on the weather.

I suppose no 2 minute cartoon can do justice to how utterly twisted the nest ultimately became.

Thanks all the same for the toon. ;)

This is ridicolous, I don't understand what happened, but one thing I do know, is that if you analyze how the financial services system works, you'll find that it isn't just driven by greed, but greed that goes beyond all reason and judgement.

I think everyone wishes it wasn't so accurate at this point......

why won't they just let AIG go bust already it's not like the markets haven't assumed it is yet...

Hopping Mad, the newest animation, is up and running! I wish this cartoon wasn't so accurate.

-Mark