Every financial crisis gets its own lexicon

One for the financial markets geeks. Every time we get a financial crisis, new words spring into our vocabulary. EBITDAC is the latest – earnings before interest, tax, depreciation, amortization and coronavirus.

Leading into the crisis there was TINA (there is no alternative) which meant that every asset was too expensive, just a question of which one was less so.

There was TARP (troubled asset relief program), a fancy word for the bailout of financial sector.

Then there was the PPT (plunge protection team) to prop up the market.

QE (quantitative easing) which means to leave the currency printer on unlimited repeat copy.

NIRP/ZIRP (negative/zero interest rate policy which is a central bank telling people its monetary policy is ineffective.

SIFI (systematically important financial institutions) which is an acronym for an excuse to keep inefficient businesses on life support.

We had PIIGS (Portugal, Italy, Ireland, Greece and Spain) which were all technically insolvent basket cases at the time of GFC.

The list goes on.

Perhaps COVID will stand for corporate operational volatility induced distress?

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