Andy convinces Billy to buy a can of sardines at a high price by telling him how wonderful they taste. Billy, being greedy, decides to resell them to Charlie for a profit at an even higher price by convincing him, too, about how great these sardines are. The process is repeated several times until the last buyer, let’s call him Zebediah, pays a million bucks to Yorick for a can of the “world’s absolute best sardines – EVER”.
Well, Zebediah decides to open the can and eat the sardines, only to discover they are ordinary, plain sardines. Furious at being swindled, he yells at Yorick: “You crook! You liar! I paid you a million bucks for plain ordinary sardines. They were not the greatest tasting sardines - EVER”, yells Zeb.
Yorick shrugs and replies…
“Hey Zebediah, you are such a schmuck. Those were not eating sardines – them were trading sardines!"
I found The Trading Sardine fable embedded in a post on the Sudden Debt blog. The reason I didn't include the entire post is that it was full of esoteric charts relating to the CIT fiasco, which I thought would bore every one. The Trading Sardine while a simple allegory, illustrates what has happened to housing, commercial real estate, stock market, and commodities.Basically what has transpired right in front of the noses of all of the regulators that are supposed to protect us, is one big Circle Jerk.
We are all Zebediahs now.
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