Employment derivatives: Difference between revisions

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 ==== The first [[employment rate swap]] ====
-{{Drop|B|arkley’s fortunes would}} change following a chance encounter in an upscale cocktail bar in West London. As she neared her [[Schwarzschild radius of alcohol consumption|gin horizon]], [[Wickliffe Hampton Asset Management|Wickliffe Hampton]]’s Chief Operating Officer Anita Dochter bellyached to her former trainee, now [[lexrifyly]]’s CEO, [[Cass Mälstrom]].
+{{Drop|B|arkley’s fortunes would}} change following a chance encounter in an upscale cocktail bar in West London. As she neared her [[Schwarzschild radius of alcohol consumption|gin horizon]], [[Wickliffe Hampton Asset Management|Wickliffe Hampton]]’s Chief Operating Officer Anita Dochter bellyached to her old pal and erstwhile trainee [[Cass Mälstrom]], now CIO of legaltech darling [[lexrifyly]].
-At the time, [[Wickliffe Hampton]] — a sleepy mid-market broker — was losing hundreds of compliance and onboarding staff each month to venture capital funded tech firms, while [[lexrifyly]], was just the sort of [[legaltech]] startup darling that was poaching them: it had no product to speak of, no business model, customers or plan but was flush with stupid amounts of cash, a great [[Microsoft PowerPoint|deck]] and an unshakable conviction in the wisdom of goosing its burn-rate by hiring lots of staff.
+At the time, [[Wickliffe Hampton]] — a sleepy mid-market broker — was losing hundreds of compliance and onboarding staff each month to venture capital funded tech firms. [[Mälstrom]] was just one.
-“But,” complained Dochter, “we actually ''need'' our staff. They actually do productive things for us. But unless we pay ''your'' stupid rates, which we cannot afford to do —” at this point she fell off her stool briefly — “and give them free fruit, unlimited working from home and a soft play area — they won’t stay with us. But, ''you'',” she continued, clambering back on and jabbing [[Cass Mälstrom|Mälstrom]] in the chest, “right now, ''you'' don’t need ''any goddamn'' staff: you just need to show your investors you are clever, imaginative and on point doing fashionably insane things. This does not require actual staff. So stop taking mine.”
+Her new shop, [[lexrifyly]], was exactly the sort of [[legaltech]] startup darling that was poaching them: it had no product to speak of, no business model, customers or plan but was flush with stupid amounts of cash, a great [[Microsoft PowerPoint|deck]] and an unshakable conviction in the wisdom of goosing its burn-rate by overpaying for bums it didn’t need on seats it didn’t have.
-As luck would have it, Hunter Barkley was waiting tables that evening and overhead the conversation. He presented them with a pitch book with the check: If you are not actually hiring anyone, why not hedge your employment rate risk of not doing so?
+“But,” complained Dochter, “we actually ''need'' our people. They actually do productive things for us. You know: [[MIS]] reports. Operational [[deep dive]]s. [[Netting]] audits .But unless we pay ''your'' stupid rates for them, which we cannot afford to do —” at this point she fell off her stool briefly — “and give them free fruit, unlimited working from home and a soft play area — they won’t stay with us. But, ''you'',” she hissed, clambering back up and jabbing [[Cass Mälstrom|Mälstrom]] on the lapel, “right now, ''you'' don’t need ''any goddamn'' staff: you just need to show your investors you are clever, imaginative and on point doing fashionably insane things. That does not take actual staff. So stop taking mine.”
-So was the first “[[employment rate swap]]” conceived.
+As luck would have it, Barkley was attending their table that evening. He presented them with the check and some after dinner mints. Barkley cleared his throat. And dropped a document on the table.@
+“Forgive me for imposing, but I could not help overhearing. If you are not actually hiring anyone, why not hedge your employment rate risk to someone who is?”
+Dochter fell off her stool again. So was the first “[[employment rate swap]]” conceived.
 For an initial period of three years, Wickliffe would pay its entire operations wage bill, controlled for performance, to lexrifyly. In return, lexrifyly would pay its absurd, grossly inflated but actually unallocated wage budget for an equivalent sized-team — there was no such team; this was exactly the point — to Wickliffe Hampton.<ref>This was slightly complicated as it was denominated in [[crypto]] and needed to be converted back to Sterling.  </ref>