Joe and Al are bungee jumping one day and Al says to Joe, "You know,we could make a lot of money running our own bungee jumping business in Mexico."

Joe thinks it's great idea,so they pool their money and buy everything they need; a tower,an elastic rope,insurance etc. They travel to Mexico and begin construction on the tower. As they are constructing the tower a crowd begins to gather and slowly more and more people stop to watch them work. When they finish, there is such a big crowd,they decide that it would be a good idea to give a demonstration.

So Al jumps. He bounces at the end of the rope,but when he comes back up, Joe notices that he has a few cuts and bruises. Unfortunately, Joe isn't able to catch him and he falls again,bounces,and comes back up. This time he is very bruised and bleeding. Again Joe misses catching him.Al falls again and bounces back up.

This time when he comes back,he's really messed up.he's black and blue,blood is pouring out of him, he has a few broken bones and is nearly unconscious. Luckily, Joe catches him this time and says, "What the fuck happened? Is the rope too long?"
Barely able to speak, Al gasps, "No,the rope was fine, it was the crowd---WHAT THE FUCK IS A PIÑATA??!"

Sorry, this joke is lost on me.  What is a pinata?

It's a large paper decoration (like a large lantern) filled with candy.  It hangs on a rope and kids hit it with sticks until it breaks and the candy comes out.