Template:M summ 2002 ISDA 6(a): Difference between revisions

Template:M summ 2002 ISDA 6(a) (view source)

Revision as of 08:41, 25 December 2023

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→‎Everyone’s hair will be on fire

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-====Everyone’s hair will be on fire====
+======Everyone’s hair will be on fire======
-This is likely to be a time where the market is dislocated, your credit officer is running around with her hair is on fire, your normally affable counterparty is suddenly diffident or evasive, and your online docs database has crashed because everyone in the firm is interrogating it at once.
+This is likely to be a time where the market is dislocated, your [[credit officer]] is running around with her hair on fire, your normally affable counterparty is suddenly diffident, evasive, or strangely just not picking up the phone, and your online master agreement database has crashed because everyone in the firm is interrogating it at once.  The sense of dreary quietude in which your Master Agreement was negotiated will certainly not prevail. Bear this in mind when negotiating. For example, the elaborate steps your counterparty insists on for your sending close-out notices, to fifteen different addresses, in five different formats and with magic words in the heading, will ''really trip your gears'', especially if some of those methods are no longer possible. There is an argument that some buy-side counterparties complicate the formal process of closing out specifically to buy time and deter their dealers from pulling the trigger. It is a pretty neat trick, if so: you can expect the [[dealer]]’s credit department to puke all over a [[Margin lock-up|margin lockup]], but a bit of fiddling around the edges of a {{isdaprov|Notices}} section? Sure, whatever.
-This is also one time the [[commercial imperative]] will count for little, since you are terminating your trading relationship altogether and with extreme prejudice. Your normally ''[[Iterated prisoner’s dilemma|iterated]]'' game of [[prisoner’s dilemma]] has turned into a ''[[Single round prisoner’s dilemma|single round]] game''. Game theorists among you will know immediately that the calculus is therefore very different, and much, much less appealing.
+Bear in mind, too: this is one time the [[commercial imperative]] will count for nothing. This is it: literally, the end game. If you close out there is no business: you are terminating your trading relationship altogether ''with extreme prejudice''. The normal ''[[Iterated prisoner’s dilemma|iterated]]'' game of [[prisoner’s dilemma]] has turned into a ''[[Single round prisoner’s dilemma|single round]] game''. Game theorists will realise at once that the calculus is very different, and much, much less appealing.
 So: good luck keeping your head while all around you are losing theirs.