How I love the smell of subprime satire in the morning. Thanks to Naked Capitalism's Yves Smith, who passes on a link from Dave Iverson at Economic Dreams -- Economic Nightmares, How the World Works has been introduced to the comedy stylings of the British duo Bird & Fortune. (Note: Contrary to some reports, John Fortune is not John Cleese, although the two men look and sound remarkably similar, and, if you like Cleese, you'll love Fortune.)
Think of an older, more erudite version of Jon Stewart sitting down with Steven Colbert, only with British accents.
First, a backgrounder on the whole subprime mess:
Second, a follow-up that more specifically references the British economy:
An excerpt, minus John Fortune's extraordinary deadpans and hilarious eyebrows:
BIRD: Ah yes, the so-called subprime situation.
FORTUNE: How does that work exactly?
BIRD: Well, imagine if you can, an unemployed black man sitting on a crumbling porch somewhere in Alabama, and a chap comes along and says would you like to buy this house before it falls down, and why don't you let me lend you the money?
FORTUNE: And is this chap who says this a banker?
BIRD: Oh no no, he's a mortgage salesman. His income depends entirely on the number of mortgages he can arrange.
FORTUNE: So his judgement to arrange mortgages is completely objective.
BIRD: Completely objective, yes.
FORTUNE: And what happens next?
BIRD: Well this debt, these mortgages, are taken by a bank and packaged together with a lot of other similar debts --
FORTUNE: Without going into much detail about what actually --
BIRD: Without going into any detail at all. It's far too boring. And so this debt moves onto Wall Street, and it's absolutely extraordinary what happens there: somehow this package of dodgy debts stops being a package of dodgy debts and starts being what we call a structured investment vehicle.
FORTUNE: And then someone like you comes along and buys it.
BIRD: I buy it, yes. And then I ring up someone in Tokyo and say I've got this package, do you want to buy it? And they say what's in it? And I say I haven't got the faintest idea and they say how much do you want for it and I say a hundred million dollars and they say fine, that's it. And that's the market
FORTUNE: And presumably, that kind of thing can happen several times to the same package. And every time it does, of course, then you and someone like you will get a fee and a markup and so on.
BIRD: A profit. Yes. Well you can't expect us to do it for nothing. It's hard work.