Monday, November 24, 2008

Something interesting on how wall street works =)

Got this from an email sent by a friend =)



Subject: Wall Street

If you have difficulty understanding the current world financial situation,
the following should help...

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 andstarted catching them.

The man bought thousands at $10, but, asthe 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 thevillagers 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 WALL STREET.

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