CITY AND SUBURBAN
Foolish virgins get their come-uppance as Trump goes misere
CHRISTOPHER FILDES
It had not until now occurred to me to classify Donald Trump as a foolish virgin. He has run out of oil, though, and wise virgins, as we are taught to expect, will do nothing for him. Too late he has realised that cash is what matters now, that cash and credit are not the same thing, and that in the absence of cash, credit evaporates. The same discovery continues to be made in boardrooms and in bankers' parlours, on both sides of the Atlantic, and highly painful it is proving. Imagine Barclays, having told us four months ago that its ruinous foreign loans were behind it, going down for £100 million on one company at home. The gap between companies with money and those without grows wider and wider, and becomes unbridgable. As Robert Fleming's economist, Peter Warbur- ton, puts it: 'Rarely has there been a time when a single factor — debt — has been so influential in separating the fortunes of the sectors of the London stock market and of the companies within them.' Property com- panies head his list of borrowers, having raised their bank borrowings by 242 per cent in three years, while 'energy, water and agriculture' borrowed only 14 per cent more. Then there are wise and foolish companies, too; see the sage Rank prepar- ing to swoop up the dashing but improvi- dent Mecca. Already we hear of invest- ment managers getting up 'vulture funds', designed to swoop on companies helpless for lack of cash. They will need to watch their timing; Candover, swooping on Col- oroll, backed off on finding that its victim was dead. I should prefer to have a Wise Virgin Fund. It might even buy some first-class property, on yields now at their highest for 13 years. Wisely, though, it will not be impetuous, for one thing is certain, many more pretty but silly girls will come to grief.
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