Cut your losses: Why losing money can be such a hairy business – Jug Suraiya

 

A large number of banks who have made bad loans to wilful defaulters are having to resign themselves to a โ€˜haircutโ€™.

When I first heard the word used in this context, I was intrigued. Would those responsible for having sanctioned the bad loan โ€“ the managers of the banks, say โ€” have to have their heads shaved as a mark of penance?ย  Should we expect to see a whole lot of bankers whoโ€™d overnight become bald?

However, I discovered that the haircuts bankers had to have were not literal but metaphorical: a โ€˜haircutโ€™ in commercialese means having to accept a smaller sum when trying to recover a loan.ย  If youโ€™d loaned someone a hundred bucks and you managed to get back only ninety bucks, you would have taken a โ€˜haircutโ€™. So how did โ€˜haircutโ€™ come to mean monetary loss?

Touts who sell blackmarket tickets at inflated prices for movie shows, sports events, and other forms of entertainment are idiomatically referred to as โ€˜scalpersโ€™, a term possibly derived from the old practice of Native American warriors of removing the scalps of their defeated adversaries as a token of victory.

Did the term to take a โ€˜haircutโ€™, denoting financial loss, derive from the sharp practice of modern-day scalpers who metaphorically fleece their customers?

That seemed a possibility. But so did the Indian custom of the mundan ceremony that many male children undergo, which involves having oneโ€™s hair cut off under the auspices of a priest, who then charges the parents of the child a hefty fee for the service rendered.

So when bankers are compelled to take a haircut, does the term trace its etymology to the mundan ritual?

Then the other day I went to a local barbershop to have my hair cut.ย  At the end of the exercise I was presented a bill of Rs 530, plus 10 per cent tip.ย  Almost 600 bucks for a haircut?

Iโ€™d not only had my hair cut, but also my wallet cut.ย  And Iโ€™ve finally understood why a bankerโ€™s โ€˜haircutโ€™ is called a haircut.

(The writer is a former associate editor with the ToI. [Courtesy- ToI])