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Of bailouts, bears and banksters
– new words and the economic downturn

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New Word of the Month
Of bailouts, bears and banksters
– new words and the economic downturn

bailout noun [C] /beilaut/ 
the act of lending or giving money to a business or organisation which has serious financial problems

‘His comments will raise fears that the UK banking sector and wider economy faces a long and painful road to recovery and that further banking bailouts may be required.’
(The Independent, 27th February 2009)

‘$250 Billion Loss Possible in Banking Bailout
. . . the loss estimate by the Obama administration implies that taxpayers have already lost $126.3 billion on the $379 billion in bailout funds committed under the Bush administration.’
(New York Times, 27th February 2008)

In January 2009, the American Dialect Society, a prestigious group of scholars and linguists, held its 19th annual vote, crowning bailout as its overall ‘Word of the Year’ for 2008. Given the chain of financial crises which unfolded in 2008, and the catastrophic implications for the banking industry, it’s easy to see why they picked this otherwise seemingly unexciting item of vocabulary. In a year which saw the meltdown of the global economy, the financial lexicon went mainstream.

A bailout is simply a financial ‘rescue’, the act of giving or lending money to a person or organisation in an attempt to help them out of their financial difficulties. The related phrasal verb, to bail someone out (to give someone help, especially financial help), is a familiar part of general vocabulary, so we might often see examples such as, I was having problems paying, so my Dad bailed me out. However bailout the noun - until recently mostly confined to domain-specific use in US English - has suddenly leapt into mainstream exposure. In the sense used most widely in 2008, bailout refers to governments stepping in to rescue companies on the brink of failure, in particular large players in the banking industry (as, for instance, in the case of Citigroup, a major financial services company rescued by the US government in November 2008). In 2008, the word bailout’s most frequent modifiers were therefore bank / banking and government / federal, depending on whether reference was being made to the ‘rescued’ (bank bailout) or the ‘rescuer’ (government bailout).

In the United States, it’s not just banks which have been getting bailouts. In early 2009, US citizens could be seen on the streets of major cities queuing up at bailout booths, telling their tales of financial woe and walking away with between $50 and $100. The bailout booth is, in fact, a publicity stunt for a classified advertisement website entitled (the site attempts to persuade users to purchase video advertising space by suggesting that selling stuff is one way to raise much-needed cash). However its very existence has continued to promote mainstream awareness of the expression bailout.


Meltdown lexicon

It began with the credit crunch and culminated in a global financial crisis. 2008 witnessed one of the most significant periods of economic downturn since the Second World War. From a linguistic point of view however, the news was not all bad. This dire economic situation spawned a whole new area of lexical creativity, as well as providing the opportunity to fling relatively obscure financial terms into the limelight, and thereby allow them into the vocabulary of the masses.

affluenza noun [U]
a blend of affluence and influenza, this refers to a condition of being stressed, overworked and up to your eyes in debt. This ‘epidemic’ is thought to be fuelled by 21st century consumerism and a continual desire for material wealth. Though first evidence of affluenza dates right back to the 1970s, the term’s more recent popularity is partly attributable to its use in a bestselling book Affluenza (Vermilion 2007), by British psychologist Oliver James. James’ affluenza theory makes the assertion that today’s is a consumerist society hooked on excessive wealth-seeking, in which people feel unfulfilled and hungry for more.

‘Back when the boom was in full swing it was popular to talk about affluenza and the allegedly soul-deadening dangers of over-consumption. A cure has been discovered whether we like it or not.’
(Courier Mail, Australia, 6th February 2009)

bankster noun [C]
a blend of banker and gangster, a bankster is a high-profile banking professional who operates in a dubious or risky fashion, especially as part of an organized network of like-minded bankers wanting to protect their own interests. The term dates back to the 1930s and was coined in the aftermath of the Wall Street Crash. However bankster has enjoyed a renaissance in the context of the current banking mayhem, with society hungry for a means of describing the individuals they perceive to be the perpetrators. In the UK, the expression has been wielded in describing senior executives at HBOS and the Royal Bank of Scotland.

‘But Biaggio is no old-style mobster – he’s a ‘bankster’, the latest example of the sort of money-market rogue that America is learning to loathe.’ (First Post, USA, 10th February 2009)

bear market noun [C]
in the stock market, a situation in which the value of shares persistently falls over a period of time. A bear market often causes investors to sell in anticipation of further losses. The expression has its own antonym, a bull market, which conversely refers to a market in which share prices are rising, causing investors to buy. Bearish and bullish are related adjectives describing optimistic and pessimistic stock market activity respectively.

The origins of the expression bear market are thought to date back to 17th century bearskin traders, who, in anticipation of falling prices, would sell bearskins before they had even caught the bears!

‘Fending off the bear market
Many will be feeling a little helpless over their superannuation savings. But as our cover story shows, there are strategies you can adopt to at least partly compensate for the effects of the bear market.’
(The Australian, 4th March 2009)


credit crunch noun [U]
a sudden reduction in the availability of loans, or a sudden increase in the cost of borrowing, which causes economic activity to slow down (in layman’s terms, the less we’re able to borrow, the less we spend). The expression was in fact coined more than 40 years ago, when it was used to describe a 1967 crisis on Wall Street. However no phrase captured the zeitgeist of 2008 more effectively, when the expression was catapulted into the public eye and gained currency (how appropriate!) with every passing week of economic misery. Suddenly the credit crunch was headline news, and beating it was a part of every-day life.

‘NHS worker kayaks to work to beat credit crunch
An NHS worker is sailing through the credit crunch - by kayaking to work instead of using his car.’
(The Sunday Mirror, 1st March 2009)

funt also FUNT noun [C]
a contraction of the expression financial untouchable, referring to someone who finds it very difficult to get a loan because they have a poor credit history. Though, on the surface, the word funt seems to describe someone who has been financially irresponsible, there is evidence to suggest that a growing number of people have been saddled with this label when they didn’t entirely deserve it. These include, for example, people who have been oversold credit, or who have fallen victim to some administrative error which then placed them on a credit ‘blacklist’. The word funt was coined in 2008 by Richard Rubin, creator of a website enabling people with debt-related problems to share their concerns ( In June 2008 British MP Stephen Ladyman raised awareness of the plight of funts by initiating a House of Commons debate, in which he pointed out that the consequences of being a funt were often completely out of proportion with the financial mistakes that caused the bad credit record in the first place.

‘In the latest jargon, lenders regard them as funts, as in “financial untouchables”, rather than as human beings who could, given more sympathetic handling, be customers again in future.’
(The Times, 18th June 2008)

ninja loan also NINJA loan noun [C]
NINJA is an acronym of no income, no job, no assets, so ninja loan refers to lending to borrowers who are likely to default on repayments because they have no job, income or other financial security. Coined by Californian loan company HCL Finance Inc., the use of ninja neatly links to the earlier term NINA (No Income, No Assets), which is used in the US mortgage industry.

‘One explanation is that rules in Hong Kong require a 30% deposit on a mortgage, while in America, so-called ninja loans (short for “no income, no job or assets”) came with apparently no rules.’
(Market Watch, 1st March 2009)


quantitative easing noun [U]
when a central bank creates new money from nothing - quite literally out of ‘thin air’ - to inject into an ailing banking system. Quantitative easing is therefore simply a mechanism for boosting the supply of money. In extreme circumstances, governments flood the financial system with extra money (hence quantitative), reducing (easing) pressure on banks by giving them extra capital. The aim is to get money flowing around an economy when the normal process of cutting interest rates isn’t working – usually when interest rates are so low that it’s impossible to cut them any further. The process is sometimes humourously referred to as ‘turning on the printing press’, or ‘printing money’. Ben Bernanke, chairman of the US Federal Reserve, famously likened quantitative easing to dropping large amounts of cash from helicopters in the sky!

‘Bank prepares to embark on quantitative easing
LONDON - Bank of England policymakers could decide as early as this week to boost the money supply to support the economy as conventional monetary policy tools lose their edge.’
(Reuters, 2nd March 2009)

stagflation noun [U]
a blend of stagnant and inflation, referring to an economy suffering from high unemployment and stagnant economic growth, while inflation continues to rise. Stagflation was in fact coined back in 1965 by British politician Iain Macleod, who said in the House of Commons:

‘We now have the worst of both worlds — not just inflation on the one side or stagnation on the other, but both of them together. We have a sort of 'stagflation' situation. And history, in modern terms, is indeed being made.’
(Hansard, 17th November 1965)

Little did he know how history would repeat itself, with the stagflation situation last seen in the 1970s becoming a new reality in 2009 and the word itself coming back out of the woodwork.

‘The economic road President Barack Obama is leading the nation down could wind up at a dead end of stagflation . . . High levels of spending and new taxes in the president's budget and stimulus package could have the unintended effects of keeping economic output low and pushing up inflation . . .’
(Milwaukee Journal Sentinel, 27th February 2009)

subprime also sub-prime adjective
a subprime loan is a loan at a higher rate of interest than usual because it involves borrowers with an increased credit risk. Subprime lending represents a risky enterprise for both borrowers and lenders – borrowers pay more, lenders potentially lose money to clients with dubious financial credentials who can’t always afford the loan in the first place.

In the United States, borrowers are often classified as subprime (i.e. ‘risky’) or prime (‘best, without risk’) based on their respective credit scores. The word subprime first hit the spotlight back in 2007, the predecessor to bailout as the American Dialect Society’s ‘Word of the Year’, and an early linguistic indicator of impending economic disaster.

It seems that a key contributor to the current financial crisis was the US housing market, where a growing number of subprime borrowers were defaulting on payments. The knock-on effect was a significant and unexpected loss of funds across a wide range of major banks and financial institutions, causing problems for key investors and sending shock waves throughout the global stock market.

‘Problems in the subprime mortgage market in the United States, which emerged in 2007, led to a freeze in credit markets, big losses at banks and eventually a recession in top economies, puncturing global stocks.’ (Economic Times, 3rd March 2009)


toxic adjective
now regularly used to describe a loan or other financial agreement which causes serious business problems for a bank or financial organisation. There was a time when, if something was described as toxic, we’d immediately conjure up images of poisonous substances, but in the past year this sense has been eclipsed by an association with financial transactions that have a negative impact (e.g. unpaid loans or assets with a dramatic drop in value). Typical collocates for toxic are therefore words such as debt, loan, mortgage or asset. Mirroring its established sense connected with poison, toxic can be used in both an attributive position (a toxic loan), or a predicative one (these assets may be toxic). There is also some evidence for a related noun toxicity.

The first use of the adjective toxic in financial contexts dates back to 2003 and is thought to be attributable to billionaire Warren Buffett, a US investor and businessman.

Toxic loans an unknown bill to taxpayers
. . . More importantly, the chancellor had agreed to accept more than £325 billion of RBS’s toxic loans into a government-insurance plan. What remains unclear, however, is how much the scheme will eventually cost the taxpayer.’
(Sunday Times, 1st March 2009)

For more information about new and topical words and phrases, read Kerry's Word of the Week and Buzzword articles on the MED Resource Site.

Macmillan English