Genesis Of The Financial Crisis > Tamedu is the proprietor of a> Foo-Foo and Isi-Ewu Shop (Exotic Nigerian food) in Lagos,> Nigeria.>> Sales are low and, in order to increase them, he comes up> with a plan to allow his customers to eat now and pay later.> He keeps track of the meals consumed on a ledger.>> Word gets around and as a result increasing numbers of> customers flock to Tamedu?s shop. His suppliers are> delighted and are very willing to sell more and more raw> materials for the meals he prepares. Tamedu shows them his> ledger of receivables and they extend him credit.>> A young and dynamic customer service consultant at the> local Nairaland bank recognizes these customer debts as> valuable future assets and gives Tamedu a credit line and> then increases Tamedu?s borrowing limit.>> Taking advantage of his customers'> freedom from immediate payment constraints, Tamedu jacks> up the prices of his Foo-Foo and Isi-Ewu.> Customers don?t mind as they are not required to pay on the> spot. Sales volume increases massively; Banks and> suppliers lend more; Tamedu opens more outlets in Abuja,> Kaduna, Port Harcourt and Ibadan. He sees no reason for> undue concern since he has the debts of the customers as> collateral.>> At the bank's corporate headquarters, expert bankers> recognize Tamedu's customer loans as assets and> transform these customer assets into Bonds. These negotiable> instruments are given exotic names such as FoofooBond,> IsiBond, EwuBond AND EgusiBond.>> These securities are then listed on the Stock Exchange and> traded on markets worldwide. No one really understands what> the names mean and how the securities are guaranteed but,> nevertheless, as their prices continuously climb, the> securities become top-selling items.>> One day, although the prices> are still climbing, a credit risk manager of the Nairaland> bank decides that the time has come to demand payment of one> of the debts incurred by Tamedu. Tamedu in turn asks his> clients to pay up. One by one they refuse; the clients> cannot pay back the debts. Tamedu refuses to serve them> anymore. The clients stop coming.>> Tamedu is really screwed now. He cannot fulfill his loan> obligations and therefore claims bankruptcy. All bonds drop> in price by between 80 to 95%.>> The suppliers of Tamedu, having granted generous payment> due dates and having invested in the securities are faced> with similar problems. The goat-meat supplier defaults on> payment to the Mallam who sells goats to him and to the> cattle supplier and claims bankruptcy. The yam supplier is> taken over by a competitor; Tamedu lays off the cook and> staff. Bankruptcies soar, unemployment mushrooms.>> The Nairaland bank that lent the money in the first place> is set to collapse. It> is saved by the Government following dramatic> round-the-clock consultations by leaders from the Peoples> Undemocratic Party with Tamedu commuting back and forth in> his Executive jet and Mercedes 500SEL, brokering the deal.>> The funds required to save the economic collapse are> obtained by a tax levied on the citizens, most of whom do> not eat Foo-Foo or Isi-Ewu.>> "THIS IS HOW THE GLOBAL FINANCIAL CRISIS STARTED"