Final Word from Thursday, July 28, 2011



After the collapse of Lehman Bros., many Czechs got scaredand started hoarding cash. Safety-deposit boxes became ascarce commodity, as people scrambled for a place to keeptheir mounds of bills and their shiny new gold coins. InMarch 2009, ČSOB Asset Management said that more thanhalf of the Kč 7bn in net redemptions from Czech mutualfunds so far that year had been kept in physical cash. Andwhere did all this caution get people? No Czech bank failed,and all anyone had to show for such vigilance was lost opportunityand higher transaction costs. So now, as the U.S.edges toward default and Larry Summers warns of a calamitythat makes Lehman Bros. look like a cakewalk, many ofthese same vigilant Czechs are wondering what all the fussis about. Instead of jumping back into cash, they're lookingforward to higher returns on their investments, thanks to thesteady rise in interest rates. And they might do very well forthemselves this time. Or they might lose everything.

Glossary of difficult words

to hoard - to amass (money or valuable objects) and hide or store away;

scarce commodity - a useful or valuable item that is in short supply;

to scramble - to perform an action hurriedly, clumsily or with difficulty;

net redemptions - the difference between the (higher) amount of money flowing out of a mutual fund and the amount flowing in;

vigilance - the action or state of keeping careful watch for possible danger or difficulties;

to have something (or nothing) to show for something - to have (or not have) a visible result;

cakewalk - an absurdly or surprisingly easy task;

fuss - excitement, agitation;

to do well for oneself - to become successful or wealthy.

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