Donald Trump’s comments resonate with: the false optimism of a Bernie Madoff sales pitch; the economic confusion of a housewife who thinks she saved money by buying something she doesn’t need at 30% off; the precarious financial strategy of the derivatives market; the false belief that America’s corporate socialist culture is actually capitalism. I think this article is worth the read. Excerpts below, full article: here.
Yahoo Finances. Originally from Wall Street Journal on line
Trump on Trump: Testimony Offers Glimpse of How He Values His Empire
by Alex Frangos/ Monday, May 18, 2009provided byWSJ
Worth Rises, Falls ‘With Markets and Attitudes And With Feelings, Even My Own Feeling’
It’s one of the great mysteries of the business world: How much is Donald Trump really worth?
The world famous real-estate developer and television personality has consistently said it’s in the billions. A 2005 book citing anonymous sources said it was between $150 million and $250 million. Mr. Trump sued the writer for defamation. He alleged damage to his reputation that caused him to lose out on future deals in locales from Philadelphia to Kiev.
A hearing in that case will take place Monday in a state court in Camden, N.J. As part of the proceedings, the Donald, as he’s known to fans and detractors alike, has provided under oath the secrets to how he values his wealth and treasure. In one case, he says, he does “mental projections.”
“My net worth fluctuates, and it goes up and down with markets and with attitudes and with feelings, even my own feeling,” he told lawyers in the December 2007 deposition…
Mr. Trump was asked whether he has ever exaggerated in statements about his properties. “I think everybody does,” he said in the deposition. “Who wouldn’t?”…
Mr. Trump said Sunday that Mr. O’Brien, author of “TrumpNation: The Art of Being the Donald,” will “wish he never heard of that God damn book” and predicted that “the publishing company will pay me hundreds of millions of dollars” as a result of the suit…
In the deposition, Mr. Trump discussed how he determined the value of a residential development on old rail yards on Manhattan’s west side. According to the deposition, when a newsletter reporter writing about the project’s 2005 sale for $1.8 billion said Mr. Trump had a “small interest,” Mr. Trump wrote him a note. “You’re a real loser. Thanks for the nice story. Is 50% small?”
But Mr. Trump had a 30% limited-partnership interest in the project, according to legal documents. A group of Hong Kong investors were the owners. Asked about this during the deposition, Mr. Trump explained that, in his eyes, he owned half because he gets paid fees for managing the buildings and because he didn’t have to put up cash in the deal. “In my own mind I’ve always felt that,” he said. “That 30% is equated to 50%,” he said. In his interview Sunday, Mr. Trump said he had owned the equivalent of “more than 50%.”
Mr. Trump often licenses his name to other developers in return for a fee or a cut of the sales. During the deposition, Mr. O’Brien’s lawyer, Andrew Ceresney…
In the deposition, Mr. Trump is asked about the Bedminster, N.J. golf course, which financial statements showed had a net loss of $4.6 million in 2005. Has he ever done a financial analysis of his investment there?
“Yes, I’ve done mental projections,” he said, figuring he’d eventually make $120 million. He never put them down on paper. “You don’t really have to,” he said. Mr. Ceresney, asks: “Have you discounted in your mind for the risk that you won’t sell [memberships] at the prices you are anticipating?”
“I think I will, but it’s possible I won’t. But I think I will,” Mr. Trump said.
At one point during the deposition, Mr. Trump explained the importance of putting his projects in the best light possible. “Would you like me to say, oh, gee, the building is not doing well, blah, blah, blah, come by, the building — nobody talks that way. Who would ever talk that way?”