a cash binge by the "King of Debt"

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WaPo's look into Trump's sudden shift from debt to cash purchases (by Jonathan O'Connell, David A. Fahrenthold and Jack Gillum) is quite revealing:

In the nine years before he ran for president, Donald Trump's company spent more than $400 million in cash on new properties -- including 14 transactions paid for in full, without borrowing from banks -- during a buying binge that defied real estate industry practices and Trump's own history as the self-described "King of Debt."

Trump's vast outlay of cash, tracked through public records and totaled publicly here for the first time, provides a new window into the president's private company, which discloses few details about its finances.

The piece asks a few questions:

Why did the "King of Debt," as he has called himself in interviews, turn away from that strategy, defying the real estate wisdom that it's unwise to risk so much of one's own money in a few projects?

And how did Trump -- who had money tied up in golf courses and buildings -- raise enough liquid assets to go on this cash buying spree?

"The cash purchases began," it continues, "with a $12.6 million estate in Scotland in 2006:"

In the next two years, he snapped up two homes in Beverly Hills. Then five golf clubs along the East Coast. And a winery in Virginia.

The biggest cash binge came last, in the year before Trump announced his run for president. In 2014, he paid a combined $79.7 million for large golf courses in Scotland and Ireland. Since then, those clubs have lost money while Trump renovated them, requiring him to pump in $164 million in cash to keep them running.

Trump's lavish spending came at a time when his business was leaning largely on one major financial institution for its new loans -- Deutsche Bank, which provided $295 million in financing for big projects in Miami and Washington.

"By 2011, Trump had spent at least $46 million on all-cash purchases"--although "During the 2016 campaign, Trump continued to brag about how he'd mastered the art of spending other people's cash:"

"I do that all the time in business: It's called other people's money. There's nothing like doing things with other people's money because it takes the risk," Trump told a campaign-trail audience in North Carolina in September 2016. "You get a good chunk of it, and it takes the risk."

My way of adding some context, David Boddiger notes the following at Splinter News:

The report doesn't get to the bottom of where all this cash came from, but it does bring past comments by the Trump children back into focus, at least speculatively. In 2008, Donald Trump Jr. stated that, "Russians make up a pretty disproportionate cross section of a lot of our assets."

In 2014, golf writer James Dodson was hanging out on the golf course with Eric Trump. Dodson asked him where the Trumps got all their money, as banks weren't loaning at the time. According to Dodson, Eric said, "Well, we don't rely on American banks. We have all the funding we need out of Russia." He added: "Oh, yeah. We've got some guys that really, really love golf, and they're really invested in our programs."

Eric's comments came at about the same time the Trump Organization embarked on its "biggest cash binge," as described by the Post.

I would say that this merits an investigation; wouldn't you?

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This page contains a single entry by cognitivedissident published on May 5, 2018 7:54 PM.

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