October 17, 2020
“Neither a borrower nor a lender be.” This is a famous phrase said by Polonius in Act-I, Scene-III of William Shakespeare’s play, Hamlet. The complete phrase is “Neither a borrower nor a lender be; / For loan oft loses both itself and friend.” This is a quaint phrase we typically take figuratively and not literally. If we took it literally, it would be the end of international finance as we know it. Which gets me to Trump. Trump owes $421,000,000 in personally guaranteed loans, which he calls peanuts and being under leveraged. Maybe not, or maybe so and that is the point. Trump may be what he claims, a multi- billionaire using a judicious amount of debt to finance his projects. If this were so, it would be easy enough to prove. Show us a balance sheet. A billion dollars in assets supported by a billion dollars in debt doesn’t make you a billionaire. It makes you broke.
Successful real estate developers don’t have to personally guarantee loans. Lenders have enough confidence in the projects and their borrowers to make straightforward business loans backed by hard assets and future income. Even Trump’s bank, Deutsche Bank, which has its own dark history of questionable dealings, didn’t trust Trump because of his track record of multiple bankruptcies and stiffing vendors.
If Trump was in great financial shape, he would show us the money. He would be releasing his tax returns. Being rich is essential to his feeling of self esteem. Financial worth equates to self worth. He would have no compunction putting up his net worth against Warren Buffet, Bill Gates, Jeff Bezos and others. He would be bragging to Forbes magazine. The value of his assets are questionable, and the SDNY is looking into it. We may see a fire sale of golf courses, resorts, and hotels. The Russians will have no more use for him, and will cut him loose. His brand will have lost its value. This may be a tragedy of Shakespearean proportions.
The Spin Doctor 