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Thirteenth law of worker entropy: Difference between revisions
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Thus, a [[Medium term note|secured medium term note]] — typically in the tens of hundreds of millions of dollars — has high intrinsic value even though the basic premise of a transaction — “I lend you money, you give me a note, I can sell it, you repay whoever holds it at maturity, with interest, depending on certain externalities” — is pretty simple. | Thus, a [[Medium term note|secured medium term note]] — typically in the tens of hundreds of millions of dollars — has high intrinsic value even though the basic premise of a transaction — “I lend you money, you give me a note, I can sell it, you repay whoever holds it at maturity, with interest, depending on certain externalities” — is pretty simple. | ||
Thus, you can expect the documentation for a syndicated loan to span several hundred pages of wretched text, and so it does, notwithstanding that one can, and parties typically do, trade on a one-page [[Cocktail napkin|term-sheet]]. [[Netting opinion|Netting opinions]] are the same: there has not been an insolvency practitioner on the planet in the last forty years who has for an instant considered challenging the “[[Single Agreement - ISDA Provision|single agreement]]” concept, which is not difficult to articulate — all our swaps net down to a single exposure, right? — but so ghastly are the dread phantoms that might alight should such a person do so — and so comfortable are the incomes of those brave thousands engaged in the annual harvest of prophylactic opinions — that the industry tolerates a multi-million dollar annual expenditure without a reflective thought. | Thus, you can expect the documentation for a syndicated loan to span several hundred pages of wretched text, and so it does, notwithstanding that one can, and parties typically do, trade on a one-page [[Cocktail napkin|term-sheet]]. | ||
[[Netting opinion|Netting opinions]] are the same: there has not been an insolvency practitioner on the planet in the last forty years who has for an instant considered challenging the “[[Single Agreement - ISDA Provision|single agreement]]” concept, which is not difficult to articulate — all our swaps net down to a single exposure, right? — but so ghastly are the dread phantoms that might alight should such a person do so — and so comfortable are the incomes of those brave thousands engaged in the annual harvest of prophylactic opinions — that the industry tolerates a multi-million dollar annual expenditure without a reflective thought. | |||
By contrast, a [[confidentiality agreement]] is part of the traditional pre-trade appendage-measuring ritual of the pea-cocks and pea-hens of finance. You ''have'' to do it, it is meant to ''look'' spectacular, but no-one is ever seriously ''hurt'' by the experience, and nor does anyone achieve anything of lasting value out of it. Even so, the abstract ''legal'' points of an NDA can be quite intricate — for that reason, the world is awash with NDA templates riddled with schoolboy errors — even though nothing of any commercial moment has ever depended on them. It’s just a [[Commitment|commitment signal]], after all. | By contrast, a [[confidentiality agreement]] is part of the traditional pre-trade appendage-measuring ritual of the pea-cocks and pea-hens of finance. You ''have'' to do it, it is meant to ''look'' spectacular, but no-one is ever seriously ''hurt'' by the experience, and nor does anyone achieve anything of lasting value out of it. Even so, the abstract ''legal'' points of an NDA can be quite intricate — for that reason, the world is awash with NDA templates riddled with schoolboy errors — even though nothing of any commercial moment has ever depended on them. It’s just a [[Commitment|commitment signal]], after all. | ||