Trump May Be Done For

The end may finally be near

I’ve been wrong about this several times, but I think the end is coming for Donald. The Great & Good are mobilizing to get him.

I met Donald in the 80s, just as Trump Tower was coming on line. I had looked at his first two deals (The Grand Hyatt on 42nd the the Tower) and decided that he was good at navigating NYC’s complex and corrupt permit process. Turns out his father did the navigating. I thought Don was the biggest horse’s ass I’d ever met. The meeting motivated me to follow his business career to see when the reckoning would come.

I thought he was done in the early 90s, when the ’86 tax act basically killed every commercial real estate developer in America. Don had signed almost $1 billion in personal guarantees that he couldn’t hope to honor. I thought the bankers would force him into Chapter 11. They didn’t.

I thought the foray into Atlantic City was a fiasco. Any real estate pro should have instantly realized that the blight was too great for any individual operator to turn around. Trump had neither the vision, nor the horsepower, nor the attention span to do that job. Vegas was going to end up as the only destination able to withstand competition from Indian and riverboat casinos. Only Vegas has the plethora of attractions and the massive convention business. Atlantic City has a rotting boardwalk. I thought the creditors in the bankruptcy of the casinos would seize assets because Don diverted proceeds from bond offerings secured by the casinos into other deals and bragged about it. He was let off the hook.

I thought he was finished politically when he badmouthed John McCain. The notion that Republicans, of all people, would tolerate the denigration of John’s heroism totally surprised me.

For a change, I think a number of forces are building that he will not be able to get past. Too many things are going wrong at once.

He was never as rich as he maintained and has little staying power. He really did go broke in the 90s, even though he wasn’t pushed into court. Most of his deals have money provided by others. He has only a profits interest (if there is a profit). Almost all of his deals (both owned and earn-out) are in property types heavily impacted by COVID and they are heavily levered. It will take a long time for the office, hotel and resort markets to recover. I don’t think Don has the staying power to hold out long enough.

Cyrus Vance is searching everywhere for a charge he can bring. Right now, he is going to allege that Don inflated the value of his assets on loan applications. That is against the law, but a common practice that is almost never prosecuted. Developers pump the numbers to impress lenders and (in some cases) because they actually believe their own bullshit. Lenders are not virgins. If they were, they’d soon be broke. They assess the liquidation value of the assets on the prospective borrower’s balance sheet and decide whether to accept the risk of making a loan. They put zero stock in a developer’s view of the value of his/her assets. However, it is against the law to inflate values on a loan application and I actually know one fool who went to jail for doing that (because the prosecutors couldn’t get him on the other charges they brought). Cyrus is on the warpath and he’s hired a hotshot prosecutor to run the case.

Prosecutors in Georgia are going after Don for election fraud. The recorded call asking that 11,000+ votes be “found” will not play well before an Atlanta jury.

He has upwards of $500 million in debt that needs to be rolled over in the short term. A lot of it is with Deutsche Bank. He had to go to a German bank because he had stiffed most of the money center banks in NYC. Deutsche has already notified the world that it is distancing itself from Don. All major banks will fear the wrath of regulators (who run the banking business) if they lend to him. Either he will default or end up with tertiary lenders . . . who will have exceedingly harsh terms. If he defaults, Deutsche will be under intense pressure to bankrupt him.

This drumbeat of trouble will be ongoing. Don has stiffed a lot of folks who are laying in wait to get even. He has always underestimated the power of vengeance. He may very well take the Republican party down with him, but I think he is going down this time.