Smells bad or unpleasant; also used informally to mean 'is bad' or 'is unfair' (like 'this situation stinks').
From Old English 'stincan,' related to Old German 'stinken,' likely imitative in origin. The word originally described actual foul smells, then evolved to describe morally bad situations.
The word 'stinks' is a perfect example of how negative physical experiences become metaphors for moral or emotional ones—we say an unfair situation 'stinks' the same way we'd say garbage 'stinks,' mixing sensory disgust with social disapproval in one word.
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