Final Word from Thursday, November 20, 2008
Balzac famously said (in paraphrase) that behind every great fortune is a great crime. That tag line of the 19th century might be updated for the 21st century to read, "And behind every great fortune is also a great big pile of debt." One thing the financial crisis is slowly revealing to us is the extent to which some of the richest people are also the ones most in hock to creditors. What good are lists of the wealthiest people if they only look at the left side of the balance sheet? The power of the margin call is most evident in Russia, where government policy is increasingly being dictated by the desire to bail out this or that oligarch. A few Czech titans have also fallen on hard times, such as real-estate tycoons Jean-Francois Ott of Orco and Milan Janků of ECM. It's basic Darwinism, unless - or until - Czech policy starts being altered to help this or that billionaire climb out from under his collapsing house of cards.[Czech Republic Kremlin property Honoré de]
Glossary of difficult words
margin call - a demand by a broker that an investor deposit further cash or securities to cover possible losses;
tag line - a catchphrase or slogan;
to be in hock - to be in debt;
left side of the balance sheet - the assets (but not the liabilities or net worth);
titan - a person of great strength, intellect or importance;
Darwinism - survival of the fittest;
house of cards - structure built on a shaky foundation (such as a pile of debt).