Government

They Never Got All The Rats


About a hundred years ago an investment prospectus invited investors to become a part of a cat-and-rat farm. This same investment concept appeared in Goldfish Bowl (a publication of the National Press Club).  Since that time, the prank took on a life of its own and is worth repeating.  However, if you are a Cat lover, please avert your eyes.As spurious investment offers go, this is probably no more unbelievable than some of the shenanigans that have shaken our confidence in Wall Streets ability to skin us all alive lately.  Anyway, the 100 year old prank continues … I took some liberties with the original story … however, it’s worth a thought and a smile or two.  Enjoy.

GLORIOUS OPPORTUNITY TO GET RICH

“We are starting a cat ranch here in Lodi, California with 10,000 cats.  Each cat will average 12 kittens a year.  The cat skins will sell for three dollars each.  One hundred workers can skin 150 cats a day.  We figure daily net profits of over $10,000.  The question is, what will we feed the cats?  We will [at the same time] start a rat farm next door with 100,000 rats.  The rats breed 12 times faster than the cats.  So we will have plenty of rats to feed our cats.  Now the question is, what will we feed our rats?  Our prospectus calls for feeding our rats the carcasses of the cats after they have been skinned.  As you can see, this is a no lose proposition as we will feed the rats to the cats and the cats to the rats and get the cat skins for nothing.”

Or, as has been recommended to me, we could substitute the rats for investment bankers and lawyers … make a lot of money and save the Country another financial calamity.  What’s the real difference between cats eating rats and getting the skins for free and packaging the most unsalable tranches of subprime mortgage loans, and credit default swaps.  (Yes, this is plain English to the few that can speak it).

Remember AIG?  The reason AIG was too big to fail was that if AIG stopped buying bonds (or stopped insuring them against default) the entire subprime mortgage bond market might collapse.  So, who got skinned?  That would be us my friends.  So, when someone wants you to invest in a cat-and-rat farm, don’t turn them down until you hear the whole story.

by Parson Boyles

About LODI360 Editor

Keith Colgan is the Editor of LODI360.com and owner of Keith Colgan Photography

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