Fish or cut bait: Difference between revisions

Fish or cut bait (view source)

Revision as of 20:33, 30 November 2020

65 bytes removed , 30 November 2020

no edit summary

Amwelladmin

Bureaucrats, Interface administrators, Administrators

83,035

edits

@@ Line 6: / Line 6: @@
 To carry on the rugby {{t|metaphor}}, when you have a good maul going forward, but momentum stalls and it looks like someone might have their hands on your ball, you might call “[[fish or cut bait]]!!” to stop an untriggered [[termination event]] hovering indefinitely over you and freaking your out your investors.
-Let’s say you’ve had a wonky month  — Coronavirus, right? —and there’s been a market drawdown on your [[assets under management|AUM]] — so much so that you have blown through [[NAV trigger]] you were forced into when you were a two-person start-up above a shoe-shop in Camden. (I know, right?) Suddenly, out of nowhere, your broker seems to have a gun to your head, but she doesn’t seem to have much better an idea than you do what to do about it. {{sex|She}} keeps muttering nervously and changing the subject whenever you mention it.
+Let’s say you’ve had a wonky month  — Coronavirus, right? —and there’s been a market drawdown on your [[assets under management|AUM]] — so much so that you have blown through [[NAV trigger]] you were forced into when you were a two-person start-up above a shoe-shop in Camden.
+Suddenly, out of nowhere, your [[broker]] seems to have a gun to your head, but not much better an idea than you do what to ''do'' about it. {{sex|She}} keeps muttering nervously and changing the subject whenever you mention it.
 Now you ''could'' ask for a [[NAV trigger]] ''waiver'',<ref>And you should: this will start a petulant war between the broker’s legal and credit teams about whose job it is to prepare and send it.</ref> but the moment you blow through an [[ATE]] never feels like the ''best'' time to crave your broker’s indulgence. It would be much better to sort this out upfront, from a position of (relative) strength when you are negotiating docs: the weather’s fair, the wind is filling your sail, and all is well in the world.
-In these favourable conditions you might ask for a “[[fish or cut bait]]” provision: this is to say, “all right, have your stupid [[NAV trigger]] but, when it happens, be prepared to put your money where your mouth is. You have a month: shoot, or put your gun away.”
+So was born the “[[fish or cut bait]]” negotiation gambit. This is to say, “all right, have your stupid [[NAV trigger]] but, when it happens, ''be prepared to put your money where your mouth is''. You have a month: shoot, or put your gun away. For ''good''.”
-Presented with this suggestion, your broker will say, “um —”. For, quietly, risk officers quite ''like'' the idea of a silent, festering, trigger they can pull at any later stage should something unmentionable happen and there isn’t a better alternative.
-But carry on. Say, “look, I don’t want a Sword of Damocles hanging indefinitely over my head. If I am in the shtook, at least be prompt about putting me out of my misery. And look — if I have made it this far without blowing up, can’t we assume I out of the woods?”
+Quietly, risk officers quite ''like'' the idea of a silent, festering, trigger they can pull at any later stage should something unmentionable happen and there isn’t a better alternative. But carry on. Say, “look, I don’t want a Sword of Damocles hanging indefinitely over my head. If I am in the shtook, fair enough, put me out of my misery, but at least be prompt about it. And look — if I do make it to the end of the period without blowing up, can’t we assume I will be out of the woods?”
-But a [[credit officer]]’s lot is not a happy one: she has wound up working in credit, for one thing. That can hardly have been the plan. Plus, she is generally overworked, under-appreciated, under-resourced and, by natural disposition, beset by existential doubts — that is in large part why she became a credit officer in the first place. She will say a [[fish or cut bait]] clause makes her life ''harder'': the cut-off time is inevitably arbitrary (true — but isn’t ''life'' arbitrary?); what counts as an {{isdaprov|ATE}} is often ambiguous (''was'' it an [[ATE]]? ''Did'' they exceed the {{isdaprov|Threshold Amount}}?) and in any weather, it is hard to calculate (is it 30 days from the actual event, or when you ''knew'' of the event, or when you ''ought reasonably to have known'' about it, and so on).
+Now we know a [[credit officer]]’s lot is not a happy one. She has wound up working in credit, for one thing: that can hardly have been the plan. Plus, she is generally overworked, under-appreciated, under-resourced and, by natural disposition, beset by existential doubts — that is in large part why she became a credit officer in the first place. She will say a [[fish or cut bait]] clause makes her life ''harder'': the cut-off time is inevitably arbitrary (true — but isn’t ''life'' arbitrary?); what counts as an {{isdaprov|ATE}} is often ambiguous (''was'' it an [[ATE]]? ''Did'' they exceed the {{isdaprov|Threshold Amount}}?) and in any weather, it is hard to calculate (is it 30 days from the actual event, or when you ''knew'' of the event, or when you ''ought reasonably to have known'' about it, and so on).
 Undoubtedly some bright spark will want a [[grace period]], or to carve out [[securities financing]] settlements — an infinitude of pedantries one can strew in a credit officer’s path — and, even if your ATEs are not beset with deplorable contortions, at the time when one comes about, the world tends to be off its axis, the head of risk will have his hair on fire and the acrid fog of war will be filled with enough choking confusion, angst and resentment to delay your close-out decision long enough to run down a [[fish or cut bait]] period. ''No-one will be quite sure whether it is an ATE or not, and no one will want to be the one to pull the trigger.''