In a marvelous job of explaining obscure ways of making money, David Enrich details how Deutsche Bank grew from a sleepy, domestic, German lender into the largest bank of the world. The secret mix was greed, testosterone, and a willingness to ignore irrational risks. Banks make money in one of two basic ways. They either lend you money and ask you to pay it back with interest. Or they sell you a financial product – say, a collection of mortgages or loans they’ve made to other people, asking you to share in their profits when their lend-ees repay their debts. The back and forth between customers and vendors is no different then avocados hawked in a Honduran farmer’s market or cars on a lot. The difference comes in the magnitude of the transactions. Hundreds of millions of dollars can move on each interaction (hence, the thrill enjoyed by caffeinated, macho young men) and therein lies the fundamental conundrum of loans.
If you owe the bank $1000 that you don’t really have, the bank owns you (or at least all of your salable possessions.) But if you owe the bank $100 million that you don’t really have, and the bank in its haste to score your business (and finance your new hotel) wasn’t wise enough to tabulate whether your possessions are worth that much, in essence, you own the bank. No one played that system of promoting a deal better than Donald Trump. He borrowed, and defaulted, on hundreds of millions of dollars, going bankrupt numerous times. Nevertheless, Deutsche Bank in its headlong rush to make money grew so quickly and adored profit to such a sickening degree that it had branches of its bank overlook issues of collateral or the law.
There is no finer example of the problem of profit over people than the saga of Deutsche Bank. No one played the game of profit over people more effectively than Donal Trump who used Deutsche Bank as a hapless piggy bank on his way to securing the highest CEO job in the world.