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Mysterious And Toxic Terminology

[ Posted Monday, March 23rd, 2009 – 17:20 UTC ]

It may already be too late to even suggest this, but I think we need a better term than "toxic assets" (or "toxic mortgages" or "toxic" anything else) if we're trying to convince people to buy them. I mean, has any marketing campaign in the history of advertising been successful using the word "toxic"? Even actual poison (bug spray, for instance) largely avoids this word, unless in some reassurance that the product is "non-toxic to pets."

To be fair, this term has largely come from the media. Which means it already may be too late to re-frame the issue. Because, like a pit bull on a juicy bone, the media gets attached to some terms and refuses to ever give them up. But for anyone trying to sell the Obama/Geithner plan to clean up our financial system, it really would be a good idea to come up with another snappy term to replace "toxic" with.

Because the Obama administration is in the midst of a sales job on their bank plan. Without getting in to the relative advantages and disadvantages of this plan (as I often state, I am not an economist and therefore really unqualified to have an opinion), I would like to instead focus on the sales job itself. Because Obama's financial team is going to have to sell this to the American people, Congress, and Wall Street. Mostly Wall Street, since they're the ones who can either make the plan work or make it fall flat on its face. And from a marketing perspective, "toxic" is... well... toxic.

It's like naming your new product "Radioactive Cornflakes." Or maybe "New -- Industrial Waste Flavor!" Or perhaps "Now With More Poison!" Any consumer faced with such a product would, quite rightly, refuse to buy it. And the heart of Obama's plan is for Wall Street traders to buy these things. If they refuse to buy them, the whole plan will collapse.

So Tim Geithner, and Larry Summers, and Barack Obama himself need to come up with a better term. I don't know if it will help, or if the plan will be a success, or even if people join in whether it can be a success. But a little marketing wizardry certainly couldn't hurt.

Washington politicians do this all the time. They prefer the more staid "framing" than the more honest "marketing" (or perhaps "hucksterism"), but it all boils down to the same thing: talking up your product. And since the product at the core of the financial meltdown (this phase of it, at least) is currently known as "toxic assets," it's pretty easy to come up with better branding. Even this re-branding may not help, but like I said, it couldn't hurt at this point.

The new term needs to be short and snappy. If it's not, then the media will ignore it, or (worse) ridicule it. It can't be some insider-speak jargon either. Calling them "underperforming moot-value assets" (or whatever) isn't going to help, because nobody will pick up on the term.

So what to call them? We could go traditional marketing, and use a term invented by the used-car industry: "pre-owned assets," but that has some negative connotations (used car salesmen aren't exactly the image you want associated with them). Or how about "piñata assets," because they're already pretty beaten up, and who knows if taking a whack at them will reward you with a shower of candy? Hmm, that one's not too bad, actually.

You could get arcane and call them "caveat emptor assets," but then someone would eventually look the term up ("Let the buyer beware!"), and complain that it doesn't exactly fit, since the government is going to assume something like 94 percent of the risk. You could take this negative and market it as a positive: "94 percent risk-free assets!" That wouldn't go over real well with the public or Congress, but it might be just the thing to convince the buyers that it's a good investment.

Or how about "submarine assets" -- they're all below water right now, and everybody loves submarines, right?

Or, as made famous by National Lampoon magazine, you could go for the hard sell: "We''ll kill this dog if you don't buy these assets!" Nah, probably not a good idea (this magazine cover caused an outrage when it first appeared back in the 1970s, and we've already got enough outrage out there already). Or you could go the other way and get saccharine about the whole thing: "Kittens and bunny rabbits assets." OK, now I'm just being silly, I fully admit.

While I must admit I did have fun coming up with some of those, I did manage to come up with one fairly good idea, too. A term that I could see politicians actually using, one that is defensible by its definition, and one that isn't overly-positive or overly-negative -- "mystery assets."

The problem with these assets is that nobody knows what they're worth. Obama didn't want to get into the position of having the government be the one to slap a price tag on these assets, which would force the banks to take a loss. Because that way, the banks could (and would) argue that they're really worth more than the government is paying, and therefore the banks are being forced to take too big a loss by the government forcing fire-sale prices on them. Instead, Obama is forcing the marketplace to put prices on the assets. Meaning that what they are worth is a mystery, until they are put up for sale in this marketplace (and a buyer is matched to a seller at some price or another).

The word "mystery" is, as I said, not exactly rosy-glasses positive in tone, but then neither is it doom-and-gloom negative. "Mystery" is rather... well... mysterious. Most everyone loves a good mystery, right? And mystery stories usually get solved in the end.

You can argue that "mystery assets" isn't the best choice. I'm sure there are better ones (feel free to post your own suggestions, as always). But anything -- anything -- would be better than the "toxic assets" term being used now. Because "toxic" has absolutely zero positive connotations to it. So the Obama financial whiz-kid team should start using a better term, while out there selling their idea.

To my way of thinking, this can be summed up in two sentences: Why anyone would buy "toxic assets" is a mystery. But maybe "mystery assets" wouldn't be so toxic.


Cross-posted at The Huffington Post


-- Chris Weigant


2 Comments on “Mysterious And Toxic Terminology”

  1. [1] 
    LewDan wrote:

    Funny -- and kind of true -- but largely missing the point.

    No one will buy "toxic assets" no matter what they're called. The plan is to "detox" them, then sell them.

  2. [2] 
    fstanley wrote:

    I do think that some people will buy these "Legacy" assists because they think they will be able to make a killing later on down the road. I also think that the very people who caused this mess will be the ones doing the buying because they are the only ones who have any cash.

    Changing the name will help a little but won't do anything about the bigger issue - the financial system/industry needs oversight and regulation.


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