Monkey Business


I would bet everyone reading this blog gets emails that contain jokes, FYI stuff, tear jerking stories, etc. One of my friends seems to keep my box full of emails like the one you are about to read.

It is funny as well as having a point that seems to jump out and scream “gotcha”. You can of course take the opposite side and see absolutely no correlation between the story and what is happening today in the world we used to call finance.

On the other hand if you know the story of the tulips in Holland, you probably will nod your head and say something like, yep, sure sums it up pretty darned good. Oh, before I get into my buddy’s email, you should know it has been altered.

I changed the market from stock to real estate in the last sentence. Even if I hadn’t, you probably would have done so in your mind after you read it.

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

The villagers, seeing that there were many monkeys around, went out to the forest and started catching them.

The man bought thousands at $10 and, as supply started to diminish, the villagers stopped their effort. He next announced that he would now buy monkeys at $20 each. 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 increased to $25 each and the supply of monkeys became so scarce it was an effort to even find a monkey, let alone catch it!

The man now announced that he would buy monkeys at $50 each! However, since he had to go to the city on some business, his assistant would buy 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 already collected. I will sell them to you at $35 and when the man returns from the city, you can sell them to him for $50 each.”

The villagers rounded up all their savings and bought all the monkeys.

They never saw the man or his assistant again, only lots and lots of monkeys!

Now you have a better understanding of how the real estate market works.


If you’ve seen this story before, please accept my mea culpa for the repetition. However, I think, you still enjoyed it and, if nothing else, it reflects the Fouled Up Beyond Any Recognition (FUBAR) scenario we are experiencing.

If a person still needs more proof, all you have to do is look at the so called bail out bill that is being proposed as the anthem to the problems in the markets and read Section 8. Here it is so you don’t have to research it:

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.” – Section 8 of the Paulson Proposal

If this guy isn’t the ultimate monkey buyer then I don’t know who is. I could go on for pages but that would only use up otherwise useful VRE. I think anyone with half a brain can see the monkeys swinging from the trees if this section is allowed to stand as written.

Fortunately, the bill had stalled and was reworked. The above section has been modified last week with the supposed addition of an oversight board and several major protections for taxpayers.

Since the final bill hasn’t passed Congress as of this writing (post was written last week – the bill has since passed), no one knows the exact power that will be given to the Sec of Treas. However, at least according to me, that doesn’t alter my point.

Stay tuned for the rest of the story. I’m sure it’ll be a doozy.

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