The Mafia would be proud

A man that owns a brewery also likes to bet on the horses. He likes to pick his horses but will listen to his bookie once in awhile. His bookie pressured him to bet some on long shots or he wouldn’t take any more of his bets. Sometimes he does ok but other times he loses big time. During one such period of loss, his bookie came to him offering to loan him some money to over his bad bets.

The brew master knew that it wasn’t wide to take loans from bookies. If you failed to pay off on time, they broke your legs. When he informed his bookie that he would borrow the money from his uncle to pay off the bets, the bookie said that he better borrow enough to pay for any damages that might occur at the brewery. The bookie then broke the windows out of the front of the building.

Realizing that the bookie had him by the short hairs, the brew master borrowed the money from the bookie. He stopped betting the horses and soon his cash flow turned around. He thought to himself, now I can pay the bookie off and get him out of my hair. The bookie had other ideas. He told the brew master he had better keep the money, as you never know when you might need it for unexpected damages. Remember the broken windows?

The bookie said that the loan made him a partner in the brewery. Much to the brew master’s dismay there wasn’t anything that he could do. A few weeks later, the bookie returned to say that with the interest now due, he was majority shareholder of the brewery. Don’t worry, the brew master was told, he still had a job, for now anyway.

What the brew master didn’t know was that the bookie had cut the same arrangement with all of the other large breweries. Now the bookie controlled of how much beer was brewed, what style of beer was going to be brewed and who was going to be able to buy it and at what inflated price. Any tavern that didn’t go along with the bookie’s game plan would soon find himself high and dry.

This may be a fairy tale but it sounds an awful lot like what is happening with the national banks. First it was a bail out loan with little or no strings attached. When banks said that they didn’t need the money they were forced to take it. When they tried to pay it back they were discouraged. Little to on strings went to owning stock with no voting rights to becoming heavy hitters in the corporation with voting rights.

Now banks that were previously OK are in trouble because they have been given a "stress test". The test requires them to add billions dollars to their assets. They were given thirty days. Where do you think that they are going to be getting those billion of dollars in thirty days? That’s right, from the bookie, I mean the government. Once they take the money the stock grab will start again and the power to make loans will be in the hands of Washington bureaucrats.