Saturday, November 28, 2009

.The Devil's Dictionary -- Financial Edition by MATTHEW ROSE - Suhas Katti

Hi Guys ,
Came acros a funny dictionary by MATTHEW ROSE while surfing Wall Street Journal..
Hopefully, the Financial Crisis is behind us - Dubai debacle notwithstanding.. & i thought to share this funny article with you all..

Enjoy reading !!! :)

Just as the financial crisis has morphed into a daily grind instead of a daily fire drill, its peculiar argot has found its way into everyday conversations. This is probably an unwelcome surprise to those not conversant with the narrow byways of Wall Street. So, in the spirit of Ambrose Bierce -- whose "Devil's Dictionary," originally published in 1906 as "The Cynic's Word Book," provided a guide to the political and cultural language of the day -- here is a Wall Street Journal Baedeker to acronyms, neologisms and bastardizations that shape the popular understanding of the pickle in which we remain one full year after the collapse of Lehman Brothers.

Journal Community
Discuss: What's on your financial crisis word list?
.AAA, n., obsolete. A rhetorical device used to dupe buyers into purchasing securities backed by shacks dressed as houses, and to secure the highest possible spot in telephone directories. Common usage: AAA Septic Drainage and Mortgage Backed Security Services.


BAILOUT, n. First known use: Noah. Novel regressive taxation scheme whereby vast sums of capital are transferred from those citizens who didn't participate in the illusory Bacchanalia of the housing bubble to those who did and weren't clever enough to get out in time.

BANK, GOOD, n., archaic. Sober, conservative, risk-averse institutions designed to midwife customers' capital and enable prudent lending to deserving businesses and consumers. See Capra, F., the Bailey Building & Loan Association.

BANK, BAD, n. 1. Everyone else. 2. Especially Goldman Sachs.

BANK FAILURE, n. 1. A process by which towns across America are denuded of their feckless local bankers, paving a way into the market for feckless private-equity investors. 2. An increasingly common Twitter tag that spikes on Friday afternoons. See #bankfail, #wheresmymoney, #runitsthefdic.

BORROWERS, n. For liberals, the unwitting dupes of unscrupulous bankers and lenders whom one shouldn't blame for the crisis. For conservatives, irresponsible graspers with a credit-busting taste for cathedral-ceilinged entryways and 70-inch flat-screen televisions whom one should absolutely blame for the crisis.

CHRYSLER, v.t. To torch all pre-existing contractual obligations. Entered dialect after Truman's seizure of U.S. steel mills. Reference spotted in 1952 editions of obsolete periodical "Steel and Steelmen," under the "News You Can Smelt" section: "We just got Chryslered!"

CREDIT-DEFAULT SWAP, n. loose translation from the original Latin "ubi mel ibi apes," or "where there's honey there are bees." 1. A complex financial instrument vital to the functioning of a modern economy in the way it spreads risk among consenting parties. (Greenspan, A., pre-Sept. 2008.) 2. A complex financial instrument that nearly destroyed modern capitalism (Greenspan, A., post-Sept. 2008).

CREDIT LINE, n. A set amount of borrowed money available only to those who don't need it.

CREDIT-RATING FIRMS, n. Firms that do scant rating of people with scant credit.

DEFICIT, n. For the party in power, at worst a minor irritant and at best a precondition for economic growth. For the minority, the gravest threat to the stability of the Republic.

DEFLATION, n. The state of being when confronting unified theories of the financial crisis with grand names -- The Great Contraction, The End to Moderation, The Bubble Era -- that don't, in fact, explain much more than our continuing inability to agree why we are in such a deep hole.

FEEDBACK LOOP, n. Process by which the significance of an event is amplified by constant repetition. Orig: CNBC. See ADVERSE FEEDBACK LOOP.

GREEN SHOOTS, n. 1. The first signs of spring, often clobbered by summer's heat and autumn's rain. 2. A sign the economy is falling apart more slowly than previously thought. Related: DAISIES, PUSHING UP. See also THINKING, WISHFUL.

LIGHT TOUCH, n., obsolete. Theory of regulation in which financial companies recycle profits to lawmakers as campaign contributions, prompting them to relax the rules until the banks inevitably mess it up, at which point the dominant theory switches to "heavy hand," prompting years of economic contraction and the cycle to repeat.

PPIP, or PUBLIC-PRIVATE INVESTMENT PARTNERSHIP, v.t. Orig: Gladys Knight. To use a form of hypnotism in which merely saying you intend to fix a problem has the effect of making everyone forget about the problem. Usage: "We really peepipped Congress on those AIG bonuses." See ASSETS, TOXIC.

QUANTITATIVE EASING, n. A regulatory approach based on the point in Western movies when the sheriff, having fired all available bullets, in an act of final desperation throws his gun at the bad guys. See also INFLATION, HYPER.

RESET, v.t. A process by which an initial expectation is altered to another expectation, as in mortgage payments, or deficits or personal fulfillment. As in, "I have reset my views of financial regulation."

RISK MANAGEMENT, n. Until recently, the process by which banks make giant bets with other people's money before persuading someone else to take the fall. Currently known as "federal supervision."

SECURED CREDITORS, n. In modern American capitalism, the parties last in line for repayment after a company's failure. The others in line include the government, unions, sundry suppliers, friends of the union, friends of the government, unsecured creditors and people vaguely familiar with the matter.

STIMULUS, n. An indeterminate sum of taxpayer money used to generate violent debate. Previously known as "government spending."

STRESS TEST, n. 1. A measure of arterial blood flow to the head. 2. Alchemic process by which struggling, undercapitalized banks are transformed into paragons of modern finance. (See BANKS, GOOD.) Also known as the "Timothy F. Geithner Seal of Approval," which some bankers insist is good until it isn't anymore. (See BANKS, BAD.)

SUBPRIME, adj. A measure of diminished intellectual capacity and increased financial mendacity.

TANGIBLE COMMON EQUITY, n. unknown origin. Definition unknown; purpose unknown; how it's calculated, unknown; what federal regulators think it means, unknown. Usages: "Macbeth," Shakespeare, W., Act II, Scene (i): "Is this TCE which I see before me...I have thee not, and yet I see thee still."

TARP, n. acronym. 1. A synthetic device designed to cover up an unsightly mess, or to protect perishable goods (firewood, banks) from the ravages of the elements, typically costing somewhere between $12.99 and $700 billion. 2. Prime example of how governments use otherwise anodyne acronyms, abbreviations and sports metaphors to disguise matters of controversy. See also TALF, TLGP, TURF, FHFA, BACKSTOP, WRAP, OFHEO and SPECTRE.

TOO BIG TO FAIL, idiom. Banks, insurance companies, car companies, presidential approval ratings, Fed chairmen seeking second terms, other people who think they should be Fed chairman, the reputations of people who'd be responsible for letting things fail. Antonym: TOO BORING TO SAVE.

TOXIC ASSETS, n. 1. A collection of bad loans and other botched financial bets that caused big losses for banks, prompted a credit crunch and sank the economy (Sept. 2008 to May 2009). 2. Long-term investments that will pay handsomely when the housing market recovers (June 2009 onward).

U-SHAPED RECOVERY, n . An opportunity for economists to incorrectly predict the timing and nature of the recession's end just as successfully as they incorrectly predicted its inception, depth and duration. Variants include V-shaped recovery, L-shaped recovery and :-( shaped recovery.

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