Let’s take stock at this point of the ongoing meltdown of the world’s economy. Forbes magazine has just announced that Microsoft mogul Bill Gates has 18 billion (not million, billion) dollars of his net worth over the last year. That put Bill Gates back in first place as the richest man in the world, followed by former Mr. World’s Richest Warren Buffett, who saw his net worth drop by $25 billion, or more than the gross domestic product of half the countries of the world. 1 Clearly, 2008 was not a banner year for the über-wealthy.
While everyone in the world has likely heard of Bill Gates, and maybe even of Warren Buffett (but that’s a stretch), there may still be no more famous member of the World Billionaire Club than Mr. Donald Trump. Affectionately known as “The Donald,” the 61 year old star of the TV show “The Apprentice” remains classified as a billionaire by Forbes. He’s ranked #450 of the world’s billionaires this year, with an estimated net worth of 1.6 billion (not million, billion) dollars. Of course, Mr. Trump has often disputed Forbes’ numbers. In 2008, he assessed his own net worth at more than double the 3 billion at which Forbes had him pegged.
But then, if Joe Six-Pack has learned anything these last few months, it’s that bottom lines in the hands of the truly wealthy perform some strange, trans-dimensional, dance. The average American is always sure exactly how much money he or she owes on their mortgage or, at the very least, their mortgage company is very sure. The cell phone bill does not “hover” around a certain figure. We would never think of asking our employer to set aside a few extra tens of thousands for our salary, “just in case.” Yet wealthy individuals, companies, and our own government have started to quote figures rounded to the nearest “billion” and, in some cases, “trillion,” numbers that leave us wondering if we’ve been invaded by aliens who do math with a different numbering system than we do.
Re-enter Mr. Trump. While Forbes rates his current net worth at around 1.8 billion, down from the 3 billion they assessed him at in early 2008, might his actual net worth be closer to, say, zero? In a year where solid, reputable companies like Merrill Lynch and Bear Stearns have disappeared, and well-known banks like Wachovia and Wells-Fargo have had to be dismantled, anything is possible. And the signs of the Donald’s possible illiquidity are startling.
Followers of “The Apprentice” may well remember the two possible “rewards” for the first season winner. One was managing development of a golf course near L.A., the other supervising a new development on the site of the demolished Chicago Sun-Time building. The winner, Bill Rancic, chose the latter, but Mr. Rancic may well wish he could reconsider. The Rancho Palos Verdes Trump National Golf Course is doing quite well. The Trump Chicago Project, not so much. In fact a group of lenders to the project, led by Deutsche Bank, attempted at one point to sue The Donald over his troubled Trump International Hotel and Tower. Now, they’re willing to give Mr. Trump 90 days to start “making payments” on their loans. 2 After all, with the world economy in the state it’s in, better a promise of money than no money at all.
Not to mention the lawsuit over the failed resort-hotel in Baja, Mexico. The argument the investors intend to make in court is that they were not simply investing in any old hotel. They were investing in the Trump brand name. One investor bluntly said, “We went ahead with the project because it was a Trump project.” Or the ultra-luxury Waikiki Trump complex in Las Vegas, which was reportedly sold out in 2006 but now is finding that many buyers are unable to complete their sales, even at the risk of losing their deposits. 3 Or the fact that Trump’s Atlantic City Casinos have filed (again) for Chapter 11 bankruptcy, owing to the lack of interest in gambling right now. Stock market and otherwise.
But does this all mean that The Donald is really “down for the count”? Possibly. But then, many people reported the demise of the Trump empire in the late 1990s as well. Like the Energizer Bunny, Mr. Trump seems to keep on going. Everyone will need to wait and see whether Donald Trump will be hired again – or fired once and for all.
1 http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)
2 http://www.smartbrief.com/news/nareit/storyDetails.jsp?issueid=5B9398F4-781A-4183-90F1-005CA38CC153©id=2267B23B-428E-4D30-B9C1-C58E84D99C1E
3 http://www.honoluluadvertiser.com/article/20090301/NEWS01/903010364/1001