Trump’s Financial Background:
Donald Trump has had a long and complex relationship with debt. Throughout his career as a businessman and real estate mogul, he has utilized significant amounts of leverage to finance various projects. This strategy can be risky; however, it also allows for substantial growth if managed correctly. Trump’s ventures have included high-profile developments like Trump Tower in New York City and various casinos.
In the 1990s, Trump faced severe financial difficulties that led to multiple bankruptcies. Despite these setbacks, he managed to maintain relationships with several banks. His ability to negotiate new loans after declaring bankruptcy was partly due to his brand’s strength and public persona. Banks often viewed him as a valuable client because of his celebrity status and potential for future profitability.
How Did Trump Help the Banks?
Trump’s unique position as a high-profile businessman allowed him to serve as an asset for banks in several ways:
Brand Value: The Trump name carries significant weight in real estate and branding. Banks recognized that lending to Trump could lead to lucrative returns if projects succeeded.
Market Influence: Trump’s developments often attracted media attention and public interest, which could drive up property values not only for his projects but also for surrounding areas—benefiting local economies and bank investments.
Risk Mitigation: By continuing to lend to Trump despite past bankruptcies, banks could diversify their portfolios with high-risk/high-reward investments. They believed that even if some projects failed, others would succeed enough to offset losses.
What Did Trump Sell for Them?
When we refer to what “Trump sold” for the banks as a salesman, it encompasses several aspects:
Confidence: Trump projected confidence in his ventures which reassured lenders about their investments.
Future Potential: He marketed not just current projects but also future opportunities that could arise from ongoing partnerships with him.
Publicity: His celebrity status served as free advertising for bank products associated with his ventures—essentially selling the idea that investing alongside him was prestigious.
Networking Opportunities: By associating with Trump, banks gained access to other influential figures within business circles who were interested in similar investments or partnerships.
So the trump failure and banks failure was actually turned into success for bankers and for trump.
It's a lot to learn from this story for all of us
