jrrosskampweb.jpgTechno-geek lingo befuddles us, but we embrace it, bit by bit.

We covet passwords to the future. Less eagerly are we adopting the lexicon of the Great Recession, a body slam of cruel terms: Meltdown, bailout, jobless recovery.                          

Many neologisms (new words) attach to real-estate related pain.   

The term “falling home prices” stumbles across our tongues. The median price for an existing home in the United States has dropped to $164,700.                 

Home equity, which is actual ownership, fell to historic lows last year. Twenty-five percent of U.S. homeowners were upside down, owing more on their mortgages than their houses were worth. 

“Jingle mail” was coined when house keys were returned to lenders, when ARMs (adjustable-rate mortgages) reset and monthly payments soared. Or when NINJA (No Income, No Job? Approved!) loans soured.      

Foreclosure became common argot in 2008-2009, when 800,000 Florida homes were surrendered to lenders. HAMP, the Home Affordable Modification Program, benefited few.                    

The superstar word? Jobs. The Great Recession destroyed 8.4 million of them, one-quarter likely forever. Everyone now sees the U-3 unemployment rate (currently at 9.7 percent) as less accurate than the U-6, which includes reluctant part-timers and the discouraged (the government’s term).  In February 2010, the U-6 was 16.8 percent.     

Economic inequality needs no descriptors. Those with annual incomes of $150,000 or more had 3-percent unemployment in late 2009, versus 31 percent for the bottom ten percent of wage earners.  

Unspoken was Hunger. One in eight, or 37 million Americans, sought help from food pantries or charitable programs in 2009.  

Banks brought us acronyms linked to failed risk models and leverage.  The media tried to explain CMOs (collateralized mortgage obligations), tranches (layers of indebtedness), securitization (the bundling and resale of packages of loans), credit-default swaps (insurance-like contracts), HLTs (highly-leveraged transactions) and material-adverse events (bad bets that went south).  Corporate heads and Congress feigned ignorance of the financial gibberish, too.                 

Did we laugh or cry about “too-big-to-fail” banks and the toxic assets that we taxpayers acquired in TARP (the Troubled Asset Relief Program)? The 20 largest banks still hold 80 percent of all U.S. financial assets.   

We thought a bonus was a deserved reward. But Bank of America awarded $4 billion in bonuses after losing $5.2 billion in one quarter, and gave its departing chief an $83 million retirement package.  Small wonder that 140 banks failed in 2009, and 179 disappeared in mergers/acquisitions.   Let’s propose clawbacks (disgorgements) of  bonuses.   

Amid chaos and the bankruptcy filings of 64,000 U.S. companies in 2008, frauds erupted. Ponzi schemes collapsed, as they always do: 150 in 2009, 40 in 2008. Memorable names:  Bernard Madoff and, locally, Scott Rothstein.   

Terms of hope emerged, too.  Consumer confidence reports gave buyers status, putting recovery in their hands.  BABs (Build America Bonds), convertible debt instruments, were created, as were PPIPs (Public-Private Investment Partnerships).  The CARD (Credit Accountability Responsibility Disclosure Act) of February 2010 protected consumers from surprise interest-rate hikes.   

More often heard were compassion, family support and priorities.  Greed became a nasty word.  

When was the acronym of the California Relief and Abatement Program (CRAP) changed?     

The rich needed a thesaurus, too, when dividend payouts were cut by $58 billion in 2009, and when “safe-as-cash,” auction-rate securities froze their funds (when interest rates reset unfavorably) – and when money-market funds broke the buck by declining below their net asset values (of $1.00). 

Yesterday’s buzzwords are provincial, laughable.  Flipping (as in real estate), luxury and lifestyle.  Wall Street’s derivatives (bets on bets) are tainted, too.  Former Federal Reserve Chairman Paul Volker said, “The only financial innovation useful to the country in the last 20 years is the ATM.”   Automated Teller Machines.  Amen.   

Our current chatter comprises big ideas:  budget deficits, credit creation, sovereign debt (hoping countries won’t default on theirs) and economic expansion.      

Lexicographers know that words shape our thoughts and deeds.  Let us discuss a V-shaped or a U-shaped economic recovery, not one L-shaped and tepid.  And, amid the verbal jousting in Congress about myriad issues, let us hope for a barrage of positive ideas that need no dictionary. 

J.R. Rosskamp, M.B.A., is an investor, entrepreneur and managing director of Veritas Partners, Inc., a business consulting firm.  She can be reached at jrrosskamp@aol.com.