10 STRANGEST BANKING PHRASES
Every industry has its own unique language that the use in communicating with their fellows. Same thing with banking and finance, which comes up with funny and weird phrases to describe dry subjects in the industry. This article explains 10 of the strangest banking terms we encounter to better understand your financial advisor or stockbroker.
Affluenza. It is a condition in which individuals struggle to become wealthier, more successful, or to "keep up with the Joneses". In essence, having this disease leads to unending need to amass more stuff than most people by trailing ends, leaving them unsatisfied. People with affluenza believe the only measure of success is determined by the money and prestige an individual has.
Below the Bar. An investment company or money management firm usually imposes a minimum amount for overseeing their clients’ assets. If that client’s asset is below the minimum requirement, he is considered below the bar. Freelancers also set their minimum rate for the services they render. If a certain client offers them with a rate below their bar, chances are they won’t take it.
Bull Market. We are not talking about matadors chasing a bull in an arena. In financial market, it is a period in which prices escalate or are expected to climb. This is often applicable to stock market, but it can also refer to any instrument being traded including bonds, currencies, commodities, and options.
Catch a Falling Knife. When you drop a knife, you know it is not safe until it reaches the floor. Relating it to finance, a company’s stock price declines slightly on a day-to-day basis, which is not safe for an investor to buy these shares until it hits the bottom.
Cockroach Theory. Non-scientific market theory stipulating the occurrences of subsequent negative events after revealing the bad news. In essence, when a firm inside an industry exposes its problems, there is a likelihood companies within that industry will endure those problems, too. The theory stems from the belief that when one cockroach is discovered, more cockroaches are still hiding nearby.
Dead Cat Bounce. Slang term for a temporary recuperation from a substantial drop in the security’s price or bear market. It is a small, brief recovery in the security’s price that will continue and be sustained. Oftentimes, downtrends are interrupted by short surges because investors or traders presume the security has hit the bottom, then they close out short positions or purchase shares.
Deadbeat. A individual or company who does not intentionally and repeatedly pay their debt obligations. For example, a lessee decides not to pay his rental fee regularly. It also refers to entity who always pay their obligations on time and in full, depriving the firm of interest income.
Poor Man’s Trust. Slang phrase for a payable on Death (POD) account that is automatically transferred to heirs. The arrangement passes probate similar to a trust put up by a lawyer but it is for free.
Underwater Mortgage. It does not pertain to a loan obtained under the table or simply an illegal loan. It actually pertains to a home purchase loan with a higher balance the face value of the house. The loan prevents the homeowner from selling the property and turning refinancing in most instances should he run out of money.
Wantrapreneur. It is a slang term for an individual who wants to become an entrepreneur but has no solid business and full commitment to continue his endeavor. In simplest term, these are wannabe entrepreneurs.
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