The Current Economic Climate – Unstable

If you don’t understand why the stock markets are plunging and everything is so screwed up, let me explain.

Once upon a time in a village in India, a man announced to the villagers that he would buy monkeys for $10.

The villagers seeing there were many monkeys around, went out to the forest and started catching them. The man bought thousands at $10, but, as the supply started to diminish, the villagers stopped their efforts. The man further announced that he would now buy at $20. This renewed the efforts of the villagers and they started catching monkeys again.

Soon the supply diminished even further and people started going back to their farms. The offer rate increased to $25 and the supply of monkeys became so little that it was an effort to even see a monkey, let alone catch it!

The man now announced that he would buy monkeys at $50! However, since he had to go to the city on some business, his assistant would now act as buyer, on his behalf.

In the absence of the man, the assistant told the villagers: ‘Look at all these monkeys in the big cage that the man has collected. I will sell them to you at $35 and when he returns from the city, you can sell them back to him for $50.’

The villagers squeezed together their savings and bought all the monkeys.

Then they never saw the man or his assistant again, only monkeys everywhere!

Welcome to the stock market!

Seriously speaking…read these:

Subprime Lending
Negative Equity
Pump and Dump
Microcap Stock Fraud
Securities Fraud




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18 Responses to The Current Economic Climate – Unstable

  1. Dabido October 10, 2008 at 11:02 am #

    My monkey comes with bucket seats! 🙂
    I want an iMonkey though. 🙂

  2. KY October 10, 2008 at 11:54 am #

    Plus, for every RM 1 we deposit, local banks lend out about RM 0.70. However, in US, for every $1 deposited, they can lend out $4-5.

  3. davidlian October 10, 2008 at 12:02 pm #

    That’s why I never invest in the stock market. Too many monkeys around already.

  4. sim October 10, 2008 at 1:03 pm #

    Now i understand the situation very very well.. Thankssss

  5. GraZie October 10, 2008 at 2:58 pm #

    Hahaha…I like your analogy. It’s totally hilarious and very ingenious!

  6. EVo October 10, 2008 at 3:31 pm #

    LOL! i suppose asking you to put them in laymen’s terms would be too much? hahaha. So who’s the man and who’s the assistant’s role? And why in India?

  7. ShaolinTiger October 10, 2008 at 6:56 pm #

    KY: Yah US is spiralling out of control man.

    davidlian: Too many monkeys and too many monkey sellers.

    sim: My pleasure!

    GraZie: Heh thanks, I didn’t come up with it though so I can’t take credit for that.

    EVo: Yah make of it what you will, it just goes to show people are gullible and there are many ways to manipulate the market (check out oil and rice stockpiling).

  8. Dabido October 10, 2008 at 7:22 pm #

    Hmmm, time to get into the banana selling business! 🙂

  9. steph October 11, 2008 at 12:18 pm #

    hmm…what does he need the monkeys for?

  10. Juanito October 11, 2008 at 9:17 pm #

    SG govt announced that every savings of 21k will be left with 20k. That is what I have been told by my SG counterparts… Also latest news is Citigrp shutting down its banking line in US…

  11. joshuaongys October 12, 2008 at 12:38 am #

    ahhh what an explanation dat is easy to understand =D i love the monkey theory, just like the monkey see monkey do one =D

  12. s2k_247 October 12, 2008 at 12:55 am #

    If you guys get a chance, read October 11th’s The Star… They have this amazing write up on the whole crisis and how the contagion effect of the crisis can affect Malaysia.

    After reading the articles, and giving it some thought, you cant help but start rethinking the whole “free market, free economy, no government intervention” thing. The lack of monitoring and intervention (*necessary and timely one*) was what caused this problem, and now we are looking at what seems to be a never ending bottoming out of economies around the world.

    But then again, this is my own two cents…

  13. ShaolinTiger October 13, 2008 at 12:58 pm #

    Dabido: Haha yah.

    steph: Did he keep the monkeys? No right..the monkeys aren’t relevant.

    Juanito: Woah that’s scary.

    joshuaongys: Yah monkey see, monkey do…sheep follow.

    s2k_247: Will check that out.

  14. RealGunners October 13, 2008 at 7:58 pm #

    hahahaha how come all the complicated and not-so-good things are associated with monkeys? seems like world economy has some similarity with the parliament after all..

  15. terry October 14, 2008 at 8:19 pm #

    never buy share

  16. ShaolinTiger October 23, 2008 at 5:20 pm #

    RealGunners: Hahaha good one.

    terry: Well if you can find some stuff at rock bottom price now and you can afford to wait it out, it might be a good time.

  17. alan October 23, 2008 at 6:42 pm #

    I’ve read this anology on another website. The website regards to about finance stuff. I read at your ‘about me’ section that you take your copyright issues seriously. If this is indeed your own ‘workings’ then I sincerely apologise, but if it isn’t, give credit where it’s due. Thanks

  18. ShaolinTiger October 23, 2008 at 6:50 pm #

    alan: I’ve seen it on many sites and received it via e-mail, if you can reliably source the original author I will credit it – no problems.

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