Financial Buzz Words of the Year - Clawback

Last year, my favorite was tranche.  

The word tranche is French for slice, section, series, or portion. In the financial sense of the word, each bond is a different slice of the deal's risk.

The very notion of taking something that makes (at least a little) sense as a whole -- like a pool of assets, and then slicing them in complex ways that give the slices significantly different characteristics is suggestive of a general approach to life.  Tranches of love?  Very Post Modern.

The New York Times has a number of candidates in their annual article. I like the word malus (opposite of bonus), fail (as a noun, like a bucket of fail), TBTF ( too big to fail), and recessionista (Originally, someone who favored a recession as ultimately good for the economy.).

The fact that they all need explanations does not particularly recommend them. My vote would be for malus. It turns out that malus has been used in experience rating of personal lines insurance, but not primarily in the United States. Here everyone gets a discount or bonus and a malus would just be called a standard rate or price.

I'm going for something more/better then a simple malus. A clawback. Per investopedia, a clawback is an: .

...obligation represents the general partner’s promise that, over the life of the fund, the managers will not receive a greater share of the fund’s distributions than they bargained for. Generally, this means that the general partner may not keep distributions representing more than a specified percentage (e.g., 20%) of the fund’s cumulative profits, if any. When triggered, the clawback will require that the general partner return to the fund’s limited partners an amount equal to what is determined to be "excess" distributions.

The term clawback captures the mood of the public. They want accountability. They not only want to slash bonuses, but also to recapture the excess and unwarranted bonuses of yesteryear. And further, they don't just want them back -- they want them CLAWED back, which in the best case would include actual blood.

Like something from Kafka's Penal Colony.

"In the Penal Colony" is a story about the last use of an elaborate torture and execution device that carves the sentence of the man on his skin in a script before letting him die, all in the course of twelve hours. As the plot unfolds, the reader learns more and more about the machine, including its origin, and original justification.

I think this just about sums up the mood of the country.