Friday, October 10, 2008

How Randolph and Mortimer Duke ruined the economy

I'll admit it, I know even less about the economy than John McCain, and believe me "my friends," that's saying a mouthful. What little I do know did not come from watching shouty douche-nozzle Jim Cramer, or any other self-anointed experts. No, I learned everything I know about the economy from Trading Places, and what is happening in our economy can be explained by reference to it.

For instance, the reason AIG needed to be bailed out is because they didn't have enough money to cover all of the bad mortgages they insured through CDOs. Consider the following:

[after breaking a vase]
Billy Ray Valentine: Hey, sorry about that.
Randolph Duke: It's perfectly all right William. It was your vase.
Billy Ray Valentine: That was a cheap vase, right? That was a fake? Right?
Randolph Duke: I believe we paid $35,000. But if I remember correctly, we valued it for the insurance company at $50,000. You see, Mortimer? William has already made us $15,000. [Coleman, Mortimer, Randolph, and Billy Ray start laughing]
Billy Ray Valentine: You want me to break something else?
Randolph Duke, Mortimer Duke, Coleman: NO!

The principle is that you can break stuff if you value it more highly than it's worth and you make money doing it. You only have to stop breaking things when the insurance company runs out of cash because everyone is breaking their stuff.

The current crisis on Wall Street similarly can be explained by Trading Places:

Randolph Duke: Exactly why do you think the price of pork bellies is going to keep going down, William?
Billy Ray Valentine: Okay, pork belly* prices have been dropping all morning, which means that everybody is waiting for it to hit rock bottom, so they can buy low. Which means that the people who own the pork belly contracts are saying, "Hey, we're losing all our damn money, and Christmas is around the corner, and I ain't gonna have no money to buy my son the G.I. Joe with the kung-fu grip! And my wife ain't gonna f... my wife ain't gonna make love to me if I got no money!" So they're panicking right now, they're screaming "SELL! SELL!" to get out before the price keeps dropping. They're panicking out there right now, I can feel it. [on the ticker machine, the price keeps dropping]
Randolph Duke: He's right, Mortimer! My God, look at it!

Bottom line: I don't know what the hell I'm talking about, because when I was growing up, if we wanted a jacuzzi we had to fart in the tub, but I sure am good looking.

*Pork bellies, which is used to make bacon, which you might find in a bacon, lettuce and tomato sandwich.

Posted by Jack Knowledge

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