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February 26, 2018, 05:20:49 AM
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: Nice one on Subprime  ( 4250 )
« : February 10, 2010, 10:04:02 PM From A»

Nice one on Subprime

One day, a plain-looking man came with a pretty-looking OL (Office Lady)
to the LV store in Causeway Bay ( Hong Kong Island ). He chose an LV bag
worth HKD 65,000 for the OL. When it came time to pay, the man took out
a checkbook and wrote out a check. The salesperson was hesitant because
the couple hadn't shopped there before.

The man discerned what the salesperson was thinking and he said calmly:
"I sense that you are concerned that this check may bounce, right? Today
is Saturday and the banks are closed. Let me suggest that I leave the
check and the handbag here. When the check clears on Monday, you can
deliver the handbag to this lady. How about that?"

The salesperson was reassured and gladly accepted the suggestion. In
addition, he waived the delivery charges. He promised that he would
personally make sure that this gets done. On Monday, the salesperson
took the check to the bank. The check bounced...! The irate salesperson
called up the client, who told him: 'What is the big deal? Neither you
nor I have suffered any loss. Last Saturday night, I went to bed with
that girl already! Oh, by the way, I thank you for your cooperation.'

This story reveals the nature of the sub-prime mortgage crisis. When
people have high hopes for huge future returns, they lower their guard
about the potential risks. This pretty girl thought that the HKD 65,000
LV bag was going to come home on Monday, and so she lowered her guard.
Therefore, she believed that her investment in the ONS (one night stand)
was worth it even though it was based

upon huge and highly uncertain risks.

Investment companies are great with packaging high return (but high
risk) deals. The stock speculators are like this pretty woman. As

such, they deserve to lose money. Without people like these, how are
people going to make money from the stock market? As for the media and
the stock analysts, they often play the role of the LV salesperson.

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