Seven pernicious euphemisms of the current financial crisis
Shares – down. House prices – down.
Commodities – down.
But there’s one market that’s booming: the market for disingenuous financial euphemisms.
Frequently oxymoronic, they usually go something like this: take a positive-sounding word and simply precede it with a suffix such as “down”, “negative”, “sub” or “under”.
Et voilà! You have a word that describes something nasty but really sounds rather upbeat.
But like most euphemisms in corporate and political life, they have the distinct whiff of corruption about them – which is why I urge you to use the plain English terms I suggest instead.
Or at least check your wallet’s still there next time a smiling banker or estate agent tries one of these babies out on you.
Can you add to the list?
Official definition: In biology, the term “downgrowth” refers to a bodily structure that grows downwards. But this literally used word has been cynically appropriated by economists and politicians as a less squeamish way of describing falling house prices, contracting GDP, mass unemployment etc etc.
What it really means: Yeah, we know we’re about to enter a period of hardship not seen since the Great Depression. But please don’t let on - just blame all those nasty journalists for talking things down.
If we keep telling ourselves that the economy’s still growing, even if it is in a downward direction, we’ll be OK.
What to use instead: “Recession” or, if you’re more pessimistic, “depression”.
2. Negative profit
Official definition: Er, a loss.
What it really means: You know that smart woman analyst, Meredith something? The one that nearly brought down Citigroup with her predictions? And officially kickstarted this bear market with her doom and gloom? Well, do you think she’ll notice that we’re haemorrhaging cash at a terrifying rate?
What to use instead: Er, “loss”.
3. Negative equity
Official definition:: Your home is worth less than your mortgage.
What it really means: You overpaid at the top of the market because you believed all Kirsty and Phil’s hype about house prices only ever going up – and you had intended to flip the place for a tidy sum six months after “buying”.
Now you’re stuck in a damp, cockroach-infested bedsit on an estate crawling with drug dealers. What’s more, you’ve gone and made the situation worse by using the place as a cashpoint ever since.
But you’ve still got equity in this unsellable dump, proving that property’s always a good investment.
Even if it is negative.
What to use instead: How about “debtlock”. As in, “He can’t move because he’s debtlocked to the place”.
Official definition:: A discrepancy between the agreed sale price of a house and the valuation given by the mortgage lender's surveyor.
What it really means: The mortgage company is trying to quash the deal because they don’t want your business. Anyone insane enough to pay those kind of prices, they reckon, is a clearly a delusional, credit-challenged dimwit who can’t be trusted with their money.
What to use instead: “Price cut”. Or “lucky escape”.
5. Write downs
Official definition: Reducing the book value of an asset if it’s overstated compared with current market values.
What it really means: Hey, write-offs just sound so final. Let’s just pretend we’re going to write it down for a while, shall we? Then maybe everyone will forget it’s there – at least until we can create an Enronesque “subsidiary vehicle” to hide this almighty screw up.
Ooh, I feel better now those billion dollar losses are just a number in a ledger, not an actual loss.
What to use instead: “Losses”.
Official definition: Mortgages with an increased risk of default and thus incurring a greater rate of interest.
What it really means: A mortgage offered in the full knowledge that the lucky recipient of the funds has no hope of ever paying it back.
But that doesn’t matter because the bank can sell this almost prime debt on to investors, pocketing a nice sum and divesting themselves of all risk (and responsibility for the feckless client, of course).
Unfortunately, that investment is so toxic that a bunch of bankers were recently overheard in my local pub using the term “subprime” to describe their particularly noxious farts. (Yes, such is the cream of the cream of the banking world . . .)
If your butcher offered you something labelled “subprime” beef would you buy it? Well, guess what, your pension fund just bought a load of subprime loans off those bankers in my local pub.
Hope you’re looking forward to your retirement – after all, everyone deserves to enjoy the subprime of their life.
Scared? Angry? Perhaps you should write to your subprime minister?
What to use instead: “Liar loan” is the pithy phrase I’ve seen doing the rounds.
Official definition: Consumers who don’t rely on banks satisfy their financial services needs.
What it really means: This guy doesn’t have a bank account because – doh! – he doesn’t have any money.
Hey, what he needs is a subprime mortgage!
Predatory lending, you say? Not at all, the underbanked are an opportunity. An unmonetised client segment in a saturated market. We owe it to our shareholders to get him drunk on free cash we know he’ll never be able to pay back.
What to use instead: “Poor”.
Enjoyed this post? Then see also my post on the FT’s use of the term “negative increases” to describe the terrifying prospect of deflation.