Livemint- Roughly a century ago, the American writer Ambrose Beirce compiled The Devil’s Dictionary. In his celebrated lexicon, Bierce displayed a profound understanding of finance, which he defined as “the art or science of managing revenues and resources for the best advantage of the managerâ€Â. Below are several other of his definitions touching on the subject of money:
Debt: An ingenious substitute for the chain and whip of the slave-driver.
Mammon: The god of the world’s leading religion. His chief temple is in the holy city of New York.
Riches: The savings of many in the hands of one.
Wall Street: A symbol of sin for every devil to rebuke. That Wall Street is a den of thieves is a belief that serves every unsuccessful thief in place of a hope in Heaven.
While Wall Street’s ethos has not changed since Bierce’s time, it is time to update and enlarge The Devil’s Dictionary of Finance for the world of hedge funds, private equity, structured finance, subprime equity, etc.
AAA: A credit rating which indicates a company has very little likelihood of default and therefore carries too little debt. By a process of financial alchemy, this rating now covers most of the riskiest corporate and consumer borrowers, which have too much debt. See rating agencies and CDO.
Alternative investment: The lucrative process of repackaging traditional equity investments. An ingenious marketing technique of the investment industry devised to boost earnings after the stock market collapse at the turn of the century. See Hedge Funds and Private Equity, also Illiquidity.
