Monday, December 1, 2008

Our Hero

The Donald is at it again. How does a guy so obviously business smart default on his debts - again? Or is he crazy like a fox and using this to his advantage? My guess is the latter.

Let's review current news:
  1. The lead lender on the City's Trump International Hotel & Tower, is suing him, trying to collect a $40-million personal guarantee he made to help get financing for the 92-story high-rise.
  2. Trump Entertainment Resorts will have to skip a $53.1 million interest payment scheduled for Monday on its 8.5% senior secured notes due 2015 in order to maintain sufficient liquidity.
And now let's go back in time:
  1. Trump Hotels and Casinos (former symbol DJT) not to be confused with the current Trump Entertainment (symbol TRMP) goes bust.
  2. Trump Airlines goes bust.
  3. and his well documented ride to the edge of bankruptcy decades ago, spawning his book "the art of the comeback."
"The Apprentice" is gone ( at least from prime time). Whatever happened to the Martha Stewart version of that show?

He started a real estate investor institute last year, if I recall correctly, right at the peak.

It seems the guy is Midas in Reverse (remember that Hollies tune?). Yet he continues to be one of the wealthiest men in the country, lives the high life and has a name to lend to designer clothing and water and is surrounded by beautiful women.

Here is someone who knows how to use the system. Don't bet against him because in the end, even if lenders and shareholders get the short end of the deal, he gets wealthier. But is it yet another sign that capitalism ran amok - like the banks? Do we have to wait for the Donald to de-lever, too?


Paul O'Cuana said...

"crazy like a fox" is right. This won't be the first time The Donald has used the "threat" of default to negotiate better loan terms.
I think his low point was when he bragged about how much money he was saving by divorcing Marla Maples just before her pre-nup vested; or perhaps it was his move to declare bankruptcy just before his divorce from Ivana Trump.

Unknown said...

Trump is like the Clintons, unfortunately the Clintons will be with us at least for 4 years, but I look forward to the day when both parties disappear from public view.

Amalan said...

One of the best indicators of market tops in any sector is the 'course indicator' - this is an observation I have made over the years. I recall that there was a huge number of training institutes popping up all over the place for teaching Oracle RDBMS in late 1999 and the first part of 2000. That was the end of the ride on the Oracle stock. I also recall a huge number of course offerings on how to make money in real estate in 2006 by people who kept telling us that they have done it and have the experience to teach it. The moment one such institute bought time on radio right after the news and just before the next program at its regular timeslot, trying to sequeeze in 15 minutes of informercial, I knew it was over for home prices/sales.

Always watch for course offerings in any sector that is flying high.

Michael Kahn said...

Amen, Amalan.

Day trading courses were the rage in 1999.