Three buddies die in a car crash, and they find themselves at the pearly gates.
They are all asked, “When you are in your casket and friends and family are mourning upon you, what would you like to hear them say about you?”
The first guy says, “I would like to hear them say that I was a great doctor and a great family man.”
The second guy says, “I would like to hear that I was a wonderful husband and school teacher who made a huge difference in our children of tomorrow.”
The last guy replies, “I would like to hear them say… LOOK!!! HE’S MOVING!!!!!”
How Banks Work
This was first published in April 1957, but it’s still strangely pertinent to banking practices today…
Q: What are banks for?
A: To make money.
Q: For the customers?
A: No, for the banks.
Q: Why doesn’t bank advertising mention this?
A: It would not be in good taste. But it is mentioned by implication in references to reserves of $249,000,000,000 or thereabouts. That is the money they have made.
Q: Out of the customers?
A: I suppose so.
Q: They also mention Assets of $500,000,000,000 or thereabouts. Have they made that too?
A: Not exactly. That is the money they use to make money.
Q: I see. And they keep it in a safe somewhere?
A: Not at all. They lend it to customers.
Q: Then they haven’t got it?
Q: Then how is it Assets?
A: They maintain that it would be if they got it back.
Q: But they must have some money in a safe somewhere?
A: Yes, usually $500,000,000,000 or thereabouts. This is called Liabilities.
Q: But if they’ve got it, how can they be liable for it?
A: Because it isn’t theirs.
Q: Then why do they have it?
A: It has been lent to them by customers.
Q: You mean customers lend banks money?
A: In effect. They put money into their accounts, so it is really lent to the banks.
Q: And what do the banks do with it?
A: Lend it to other customers.
Q: But you said that money they lent to other people was Assets?
Q: Then Assets and Liabilities must be the same thing?
A: You can’t really say that.
Q: But you’ve just said it! If I put $100 into my account the bank is liable to have to pay it back, so it’s Liabilities. But they go and lend it to someone else and he is liable to have to pay it back, so it’s Assets. It’s the same $100 isn’t it?
A: Yes, but….
Q: Then it cancels out. It means, doesn’t it, that banks haven’t really any money at all?
Q: Never mind theoretically! And if they haven’t any money, where do they get their Reserves of $249,000,000,000 or thereabouts??
A: I told you. That is the money they have made.
A: Well, when they lend your $100 to someone they charge him interest.
Q: How much?
A: It depends on the Bank Rate. Say five-and-a-half percent. That’s their profit.
Q: Why isn’t it my profit? Isn’t it my money?
A: It’s the theory of banking practice that…
Q: When I lend them my $100 why don’t I charge them interest?
A: You do.
Q: You don’t say. How much?
A: It depends on the Bank Rate. Say a half percent.
Q: Grasping of me, rather?
A: But that’s only if you’re not going to draw the money out again.
Q: But of course I’m going to draw the money out again! If I hadn’t wanted to draw it out again I could have buried it in the garden!
A: They wouldn’t like you to draw it out again.
Q: Why not? If I keep it there you say it’s a Liability. Wouldn’t they be glad if I reduced their Liabilities by removing it?
A: No. Because if you remove it they can’t lend it to anyone else.
Q: But if I wanted to remove it they’d have to let me?
Q: But suppose they’ve already lent it to another customer?
A: Then they’ll let you have some other customer’s money.
Q: But suppose he wants his too… and they’ve already let me have it?
A: You’re being purposely obtuse.
Q: I think I’m being acute. What if everyone wanted their money all at once?
A: It’s the theory of banking practice that they never would.
Q: So what banks bank on, is not having to meet their commitments?
A. YOU GOT IT
Four best friends met at the hospital as their wives were giving births to their babies. The nurse comes up to the first man and says, “Congratulations, you have a lovely set of twins.”
The man said “That’s fantastic and somewhat ironic – I’m the manager of Minnesota Twins.”
After awhile the nurse comes up to the second man and says, “Congratulations, you have a beautiful set of triplets.”
“That’s great,” said the second man, “but equally ironic – I am the director for the Broadway production of the Three Musketeers.”
After a short time, the nurse came up to the third man. “Congratulations,” she said, “you have four new babies – two sets of twins!”
The third man says, “Wow! That is fantastic but talk about irony – I work for the Four Seasons Hotel!”
So, all three men are delighted until they glance across the waiting room and see their last friend jumping all over the place, cursing God and banging his head against the wall. The three friends ask him what’s wrong.
“What’s wrong? What’s wrong?!!?!! Don’t you know – I work for Heinz 57!”