“Hair Cut”: Financial Expression of the Day


In Finance land, there's no such thing as a good haircut unless you're doing it to someone else

In Finance land, there’s no such thing as a good haircut unless you’re the barber (Photo: galleryhip.com)

“Hair Cut”: verb phrase, in business and finance, to receive less than the amount due or expected on a financial obligation or investment (i.e. application of a discount to an amount owed or return anticipated).

Usage Note: Sharing some similarities with the gem of a phrase “Take a Hit”, this well-worn financial idiom is more versatile, and more widely used.  When you think about it, the haircut is a strange behavior unique to the human animal. Humans share 97% (or whatever) of our DNA with chimpanzees and although you’ll see a lot of people acting like monkeys, particularly in finance, you’ll never see monkeys getting a haircut.  But we humans just love getting our haircut. Something very relaxing and rejuvenating about someone tugging on your mane and snipping at it in tiny increments with a sharp pair of scissors.

Unfortunately, as is often the case with financial lingo, “haircut” has become an overused substitute for “discount” and as such has made its way into all forms of conversation where it really has no business being.  Finance geeks throw the term around for anything from a sale at Barney’s to short-changing a friend when repaying for last weekend’s bender. Continue reading

“Project Falcon”: Financial Expression of the Day

Like Maxwell Smart's concealed phone, a shrewd deal-man will conceal his "project"

Like Maxwell Smart’s concealed phone, the spying deal-man will conceal his “project”

“Project Falcon”, noun phrase, a characteristic code name for any confidential proceeding, such as a potential merger, take-over, leveraged buy-out, or other financial transaction. Usage Note: When bankers are working on their latest deal, rather than talk about the companies involved directly, they like to make up a code name to use in lieu of the actual situation. So on their computer hard drive when they’re working on a deal for say,  Sears acquiring Target, they’ll name that engagement and file, for example, “Project Falcon”. In the rarefied world of private equity, investment banking and even asset management, the protagonists like to think of themselves as tough, street smart, military-like combatants.  They fancy themselves generals on a field of battle with troops arrayed and lives at stake. One manifestation of this pathology comes in the form of project code names.  Not unlike Military Operation code names, project code names have a sophisticated, covert ring to them.  The primary difference is, there’s nothing so serious at stake as the financiers would like to believe.  Continue reading

“Ask”: Financial Expression of the Day


When a banker says, “That’s a big ask,” don’t be confused. (Photo: popopics.com)

Ask,” noun, a request.  Usage note:  Upon being asked by an unreasonable client, at say 5 p.m., for 23 hours worth of work to be delivered at 9 a.m. the next morning, an investment banker might say to the “deal team,” “Wow, that’s a really big ask.”  This simple example, that is, the use of the verb “ask” as a noun, beautifully exposes the pathology and just plain weirdness of finance lingo and the workaholics who embrace it.

According to Constant Agony, the Jesse Jackson Professor of Linguistics at State Normal School for Women at Harrisonburg, who has served as a a translator in countless insider trading cases: Continue reading

“Delta”: Financial Expression of the Day

John Belushi In 'Animal House'

Leave “delta” alone unless you’re discussing Greek like, referring to alluvial deposits, or sitting in math class or on the derivatives desk.    (Photo: John Belushi in movie “Animal House”)

Delta, noun, a change in a variable.  Usage note:  Once you’re out of math class or off the derivatives desk, don’t use this word unless you’re either talking about Greek life, eg, “I heard the pledges were forced to drink cow urine at Delta Tau Delta” or alluvial deposits at the mouth of a river, eg, “It was the number of Sazeracs I drank at the Carousel Bar not New Orleans’ location in the cloven-footed Mississippi Delta that caused my blackout and delirium tremens.”  Unfortunately, pompous financial types often use this one when discussing a difference of almost any sort.  Examples range from the sordid, “The massage parlor charged me ten dollars more this go-round.  I can’t account for the delta,” to the mundane, “Gross margin dropped dramatically because of mark-downs.  It was a delta of more than 200 basis points year-over-year.”  

According to Iva Cocke, Professor of Rhetoric & Communications at Northern Southwestern Indiana Normal School and Business Institute, who has written extensively on Wall Street patois, the reason why financiers have adopted an abhorrent term like “delta” is somewhat complicated.  Says Professor Cocke: Continue reading

“Nit”: Financial Expression of the Day

mountain-or-molehill-1024x765 (1)

When your boss says, “I’ve just got a few nits,” get ready for an all-nighter.

Nit, noun, a supposedly small mistake that is highlighted for correction.  Usage note: Merriam-Webster kindly points out that Brits use this word as an abbreviated form of “nitwit,” which, in turn, is a good name for anyone who’d use today’s FEotD with a straight face.  There are a couple of ways that a more senior banker can alert his financial serf that he has editorial changes to a deck (the boring banker will choose “deck” instead of “presentation” because the former provides a thrill up his leg, à la Chris Matthews, as he imagines himself possibly cutting the deck while fitting right in at a celebrity poker tournament with Ben Affleck, Tobey Maguire, and Shannon Elizabeth, instead of proofreading a deck that no one will ever read).  With a breezy inflection in his voice that belies the nature of the soul-sapping work he’s about to assign, he might phone his lackey and say, “Could you swing by my office?  I’ve got a couple of nits.”  The summons to his office is the banker’s preferred course of action because having usually worked his way up from the associate level cube-farm, he views his office as his hard earned sanctuary (complete with Lucite deal toys adorning the window sill), so he spends a strange amount of his time devising creative ways to make people come to him.

Continue reading

“Base Case”: Financial Expression of the Day


Beware the Financial Soothsayer...

Beware the Financial Soothsayer…

...they can't even match P. Phil

…he can’t even match P. Phil’s record


Base Casenoun phrase, the most likely or expected scenario when forecasting corporate financial performance.

Usage Note: Financial desk jockeys from buy-siders to investment bankers to corporate CFO’s use this term as part of their regular business of prognostication.  It’s especially relevant during the grind show where the bankers and companies shamelessly stump for money to run their business (or rather, to waste on pet projects, diversifying acquisitions with “synergies”, or to pay a dividend to their Private Equity owners).

In the realms of High Finance, the business of forecasting is part and parcel of the job.  Either you’re a CEO trying to convince investors your company will never see a downturn and can only grow year after year; or a banker trying to bamboozle the syndicate of “accounts” into thinking it’s normal that the company you’re hawking has an EBITDA forecast that looks like a “Hockey Stick”; or you’re a money manager trying to convince clients you can read the tea leaves and spot the canaries dying in the coal mine to ensure you make the best picks at the best times. Continue reading

“Agnostic”: Financial Expression of the Day


Agnostic? Who knows? Hedge fund pros don’t waste time on matters theological…

Boiler room

…they’re too busy worshiping the (god) almighty dollar.

Agnostic, adjective, having no bias with respect to position in the capital structure.  Usage note:  Merriam-Webster defines an agnostic (noun) as “a person who holds the view that any ultimate reality (as God) is unknown and probably unknowable; broadly : one who is not committed to believing in either the existence or the nonexistence of God or a god.”  However, when a hedgie (an execrable moniker for “hedge fund professional”) uses the term, there’s scant chance that he’s discussing matters theological because he typically worships one thing …the almightly dollar.  Moreover, despite how glamorous he allows his friends to think hedge fund life is (all the while keeping silent on the due diligence trips to places like Detroit to “kick the tires” on the sexiest of distressed auto parts suppliers), our hedge fund man simply doesn’t have time to finalize his thinking on the existence of God (or a god).  When he’s not updating one of his many 20-tab Excel financial models, he’s making frantic calls to headhunters while his portfolio manager boss, a graduate of the “what have you done for me lately” school of management, continues to humiliate him in front of the entire firm over his last two consecutive dogshit stock recommendations. Continue reading