Deutsche Bank – one of Donald Trump’s lenders – applied adjustments to whatever the former president claimed to be worth when applying for loans. This became known as the “Trump haircut.”
The New York Civil Fraud Trial
“First of all, what is a haircut?” Kevin Wallace, in the New York civil fraud trial, asked while examining Nicholas Haigh – one of Trump’s financial associates. Haigh reportedly played a big part in getting more than $400 million in loans to Trump, from Deutsche Bank, approved.
The Meaning of “Haircut”
“A haircut is a way by which the bank reduces the stated value of the asset in order to form some kind of assessment of what it might be worth,” Haigh explained. Twelve years ago, Trump told the bank that his net worth was $4.26 billion. Following its haircut, however, it was concluded that he could be worth as little as $2.365 billion.
A Worst-Case Scenario
In other words, Deutsche Bank was seemingly aware that the former president might have been a little optimistic in his assessments of his own worth. As such, they looked into what the number might have been in a worst-case scenario.
The Internal Paperwork
In the bank’s internal paperwork, Trump’s optimistic net worth claim could be seen. To the right of that and in its own separate column, an “adjusted” figure was added. This was Deutsche Bank’s worst-case scenario figure calculated with the “haircut.”
A Crucial Element
The Attorney General’s filing said that the haircut figure was crucial in assessing “whether to extend or maintain credit.” The loans, naturally, assisted Trump in the creation of his empire. They also helped build his reputation, something which eventually led to his White House bid.
Examples of Trump’s Loans
As an example of how the loans assisted Trump, he borrowed $125 million for the Trump National Doral Miami golf resort, $107 million for the Trump International Hotel and Tower in Chicago, and $170 million for the renovation of the Old Post Office in Washington, D.C.
The Internet’s Response
News of the “Trump haircut” was shared across the internet and people flocked to comment sections to give their views on the matter. “The lender admits to doing their own due diligence before loaning Trump any money. Case closed,” one commenter wrote.
A Bad Credit Risk
Another person said: “Not one penny should be loaned to Trump. His bankruptcies, his lack of honesty and integrity, and his complete disregard for paying the cities that he holds the stupid rallies in should be proof enough that he is a bad credit risk.”
Trump Knowingly Lied
Others said that the internal paperwork proved Trump had lied: “Which also proves the state’s case that Trump lied on the application forms. The bank just happened to know he was lying and took it into account!”
Trump and Bankruptcy
For the most part, people were highly critical of the former president. “Trump’s self-reported net worth has always been lied about. How many times did he claim bankruptcy while destroying the lives of those he owed money to?” one person said.
A Life of Lies
The commenter continued: “Now, he begs for money from his followers to pay for fees. In his mind, they should do that as a duty… and they fall for it. His whole life is a lie and his finances are based on paper, not reality, which fits right in with the way he thinks.”
The True Picture
Others implied that the former president lies about absolutely everything he speaks about. One individual wrote: “Basically apply it to all his endeavors and then the true picture starts to come into light.”
Committing Persistent Fraud
One person imagined what it would be like if ordinary people could get away with the things Trump did. They said: “He committed persistent fraud. Imagine if you could go to the bank and tell them your $100k home is worth $10 million. How successful you would be.”
Trump Lost Money
Another commenter wrote: “Dumpy inherited maybe $400 million from his father. Adjusted for inflation, that would be over $4 billion now – even if he never earned a dime on it. If passively invested in an index fund, he would have a net worth to rival the richest of Americans. Instead, he exemplifies the old joke about the best way to make a small fortune… start with a big one.”
A Known Serial Liar
Another individual said: “So what I’m hearing is that they trusted Trump so little that they literally just assumed he was worth a lot less than he claimed. This is hilarious. He is a known serial liar.”
Trump Still Lied
Others pointed out that, regardless of the haircut, Trump still knowingly lied about his wealth: “Haircut or no haircut, he still lied. He knew he was lying too. It’s not like it was an honest mistake. He’s already been found liable anyway.”
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