PHAJJAY KE PAYE & NIHARI

**Phajja is the proprietor of a Siri-Paya and Nehari Shop in Lahore. 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 Phajja’s shop. Phajja’s suppliers are delighted and are very willing to sell more and more raw materials for the meals he prepares. Phajja shows them his ledger of receivables and they extend him credit. **


A young and dynamic customer service consultant at the local bank recognizes these customer debts as valuable future assets and gives Phajja a credit line and then increases Phajja’s borrowing limit.


Taking advantage of his customers’ freedom from immediate payment constraints, Phajja jacks up the prices of his Nehari and Siri-Paye. Customers dont mind as they are not required to pay on the spot. Sales volume increases massively; Banks and suppliers lend more; Phajja opens more outlets. 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 Phajja’s customer loans as assets and transform these customer assets into BONDS. These negotiable instruments are given exotic names such as SIRIBOND, PAYABOND, MAGHAZBOND AND BONGBOND. 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 bank decides that the time has come to demand payment of one of the debts incurred by Phajja. Phajja in turn asks his clients to pay up. One by one they refuse; the clients cannot pay back the debts. Phajja refuses to serve them any more. The clients stop coming.


Phajja is really messed up now. He cannot fulfill his loan obligations and therefore claims bankruptcy. All Bonds drop in price by between 80 to 95%.


The suppliers of Phajja, having granted generous payment due dates and having invested in the securities are faced with similar problems. The meat supplier defaults on payment to the sheep and cattle supplier and claims bankruptcy. The aatta supplier is taken over by a competitor; Pajja lays off the cook and staff. Bankruptcies soar, unemployment mushrooms.


The 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 governing political parties with Phajja 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 Nehari or Siri-paye.

UNDERSTOOD?

Re: PHAJJAY KE PAYE & NIHARI

^ This is the explaination of economic downturn in US and many other countries.

I know why i don’t like Siri Paye :hehe:

A very Nice and wonderful explanation of the whole mess

Re: PHAJJAY KE PAYE & NIHARI

^^ Nice!

Only that the lucrative compensation packages to the bankers for selling those Payabonds is left out of equation. This is what motivated them to blindly sell all the junk that comes their way. The huge compensation packages at AIG, Citibank, etc are still a mess and Obama has to step in.

socialism for the rich... capitalism for the poor...

btw - Great thread arjay!

THE CURRENT ECONOMIC CRISIS EXPLAINED, PAKISTANI STYLE!

Fajja is the proprietor of a Siri-Paya and Nehari Shop in Lahore . 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 Fajja's shop. Fajja's suppliers are delighted and are very willing to sell more and more raw materials for the meals he prepares. Fajja shows them his ledger of receivables and they extend him credit.

A young and dynamic customer service consultant at the local bank recognizes these customer debts as valuable future assets and gives Fajja a credit line and then increases Fajja's borrowing limit.

Taking advantage of his customers' freedom from immediate payment constraints, Fajja jacks up the prices of his Nehari and Siri-Paye. Customers don’t mind as they are not required to pay on the spot. Sales volume increases massively; Banks and suppliers lend more; Fajja opens more outlets. He sees no reason for undue concern since he has the debts of the customers=2 0as collateral.

At the bank's corporate headquarters, expert bankers recognize Fajja's customer loans as assets and transform these customer assets into BONDS. These negotiable instruments are given exotic names such as SIRIBOND, PAYABOND, MAGHAZBOND AND BONGBOND. 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 bank decides that the time has come to demand payment of one of the debts incurred by Fajja. Fajja in turn asks his clients to pay up. One by one they refuse; the clients cannot pay back the debts. Fajja refuses to serve them any more. The clients stop coming.

Fajja 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 Fajja, having granted generous payment due dates and having invested in the securities are faced with similar problems. The meat supplier defaults on payment to the sheep and cattle supplier and claims bankruptcy. The atta supplier is taken over by a competitor; Fajja lays off the cook and staff. Bankruptcies soar, unemployment mushrooms.

The 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 governing political parties with Fajja 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 Nehari or Siri-paye.

Re: THE CURRENT ECONOMIC CRISIS EXPLAINED, PAKISTANI STYLE!

Really simple ! ~~

Re: THE CURRENT ECONOMIC CRISIS EXPLAINED, PAKISTANI STYLE!

already posted here:
http://www.paklinks.com/gs/business-economics-personal-finance-equity-markets/314863-phajjay-ke-paye-nihari.html

Re: THE CURRENT ECONOMIC CRISIS EXPLAINED, PAKISTANI STYLE!

Oye you guys making fun of my nihari store?

NO COMMENTS !
(And this is actually happening!)

From the Toronto Star of April 05, 2009
TheStar.com | Insight | Dubai: How not to build a city
Dubai: How not to build a city

Heavy fog rolls by highrise construction sites near the Dubai Marina.

A cross between Vegas and Mississauga, Dubai is in danger of becoming a ruin-in-waiting
Apr 05, 2009 04:30 AM

Christopher Hume
Urban affairs columnist

DUBAI – If this really is a city and not some sheikh’s mad idea of what a metropolis should be, it’s a city despite itself.
Its vast wealth notwithstanding, the things that make Dubai liveable are those that happened when the planners weren’t looking. But life will out, even in a city built by oil-fuelled hubris.


To most, the image conjured up by Dubai is one of superlatives: This is the location of the world’s tallest tower (the Burj Dubai), the world’s most expensive hotel (the Burj Al Arab), the world’s richest horse race (the Dubai World Cup), the world’s … Well, you get the idea.


And not to be outdone, there’s the brand new The Tiger Woods Dubai, a golf course in the desert that requires four million gallons of water a day to stay green. This in a country built on sand.
It’s also the site of some of the planet’s worst congestion. It’s not just that everyone here drives; everyone drives badly. In March 8 of last year, for example, three people were killed and 277 injured in a highway pile-up that involved more than 200 vehicles.


**Still, it’s hard not to be impressed by what has been accomplished here. The extent of this ruin-in-waiting is truly mind-boggling. **


The question is where to start. The main street, Sheikh Zayed Road, may be as good a place as any. It runs through the city and continues on to Abu Dhabi, Dubai’s quieter, richer cousin, and capital of the United Arab Emirates. This, the road where the accident occurred, reaches 14 lanes in places – and that’s in the heart of the city. Speed limits exist, but only to be ignored.


In neither city are pedestrians welcome anywhere near the street. But in Dubai, the visitor realizes in nanoseconds that this is a city dedicated, enthusiastically, if not slavishly, to the car, the bigger the better. People just aren’t meant to be pedestrians here, but drivers.


According to a recent story in Abu Dhabi’s new English-language newspaper, The National, locals overwhelmingly view traffic accidents as the major cause of death and injury among children. No kidding. Anyone crossing a road in these parts is fair game. To step out means taking your life into your hands.


And if SUV sales have collapsed in North America, Emirates remain as committed as ever to driving the biggest set of wheels they can find. Hummers, Escalades and Cayennes abound. Dubai’s traffic, like its wealth, depends on oil, a commodity that’s already running out. It’s Abu Dhabi, back down the road, that has the vast bulk of the U.A.E.'s oil reserves – 95 per cent. Dubai has less than five per cent, and it is not expected to last more than a decade. The economy relies on real estate, tourism and Abu Dhabi, the emirate that is reported to have invested upwards of $10 billion (U.S.) in Dubai’s economy. The truth may be that this city will be obsolete in less time than it takes most communities to figure out who and what they are.


**But at the moment Dubai is famous for its architecture. Landmarks such as the Burj Al Arab hotel, which sits in the water off the city’s waterfront, have become designated icons, reproduced endlessly in kitsch souvenirs sold everywhere. In another context, such a building, despite its glorious bad taste, would still be a monument. Here it’s just another symbol of built excess, one of hundreds, if not thousands. **


**The most interesting aspect of the hotel is the helipad that extends conspicuously from the top of the sail-like structure. Though obviously intended to convey a sense of riches, it actually addresses the underlying frustration of trying to get around by car. **


To be fair, Dubai is now constructing a new above-ground metro. It will be the region’s first serious attempt at public transit, not including bus lines that serve the huge immigrant underclass brought here to do the dirty work. Keep in mind that fully 90 per cent of Dubai’s population comes from somewhere else, typically Pakistan, Bangladesh and the Philippines.


As for those skyscrapers that crowd Sheikh Zayed Rd., each more outrageous than the next, they have the strange effect of cancelling each other out. Each becomes unexpectedly meaningless, rendering any discussion of architecture irrelevant.


One is reminded that as much as anything architecture derives much of its significance from its context. There’s no better example than the Burj Dubai, which, but for the fact it’s the tallest building in the world, couldn’t be less interesting. What’s so curious is that it’s enough simply to be the tallest; there’s no pressure to aspire for excellence. For all the difference it would have made, it could have been designed by engineers.


As a result of this frantic race to outdo the guy next door, architecture has been turned into a sideshow attraction. Starchitecture is the least of this city’s problems. Dubai resembles nothing so much as a cross between Mississauga and Las Vegas, but on a massive scale; it’s not that there’s no there there, but that there are so many.


Despite everything, Dubai is a thriving city of 1.4 million, the overwhelming majority being expatriates. To wander the streets of the quarters where these guest workers live and work – Bastakiya for example – is to encounter something that approximates what urban Canadians would recognize as neighbourhoods. They don’t resemble anything North American, but there’s life at street level in shops, restaurants and so on. Walking may not be any easier in these parts, but an urban sensibility prevails. It couldn’t be further from the malls, freeways and sprawl of suburbia as we know it, or from “downtown” Dubai for that matter.


Where traditional cities have evolved over centuries, sometimes millennia, Dubai was built in decades. Not much was happening here before the 1960s, a mere blink ago in the life of a Paris, London or Rome. By U.A.E. standards, even Toronto seems positively ancient.


Though there’s something undeniably exciting, even exhilarating, about the idea of Instant City, a place unencumbered by the past and free to embrace the future, the reality says otherwise. Indeed, this isn’t so much a city of the future as a city in denial of the future.


**The old Jane Jacobs’ notion of the city as organized complexity – the sense that order can be found underneath the apparent chaos – becomes almost precious in this context. On the other hand, informal networks of various sorts have been created, self-organized, mostly by foreigners. A small but vivid example is a grassy verge that visiting workers have adopted as an informal meeting place. The expatriates can be seen sitting in groups, large and small, once the heat of the day has subsided. **


Mostly, however, tradition seems more an intrusion. The most obvious instance, perhaps, is the Muslim call to prayers, which cuts through the din five times daily, literally a voice from the past.


Perhaps even that will fall silent once this city has become the “colossal wreck” of which Percy Bysshe Shelley spoke in his famous sonnet Ozymandias. Only the desert will remain, and the sand that covers every surface.