May 10 2008
A deal is a deal
A Swede worked for an American bank in London struck a $2.5bn locked-in rate deal with a Chicago hedge fund two years ago was fired last week over the deal that has been losing money since the rate is so low lately. The bank made decent profit on this deal for a while. He was in a position to sign off on this. But unfortunately he wasn’t in a position to see the subprime was coming, nor could he predict (correctly) the rising oil price and food, etc.
It is amusing to see the differences between the East and the West toward contratual obligations - I don’t think Lucy’s exception. Would the bank go to the hedge fund asking them not to borrow any more? Hell no, it would be a ‘face losing’ proposition, looks utterly ridiculous. China hands, pls take a note.
Ages ago when Pokemon was in fashion, King was very young. One night at a dinner, he decided to part half of his cards with an older boy at our table for a single card. They played well together. The receiver scratched his head. His parents looked uncomfortable.
Golfer asked his son, “are you sure …..?”
King replied, “yes, I want him to have those.”
His parents said, “pls just give him one, one is enough ..” trying to return the cards.
I sat there said nothing. Essentially this was his first deal. Those were his, his property/toy, he should be able to do whatever he pleased. If he felt the older boy’s card worth half of his deck, so be it. If upone returning home or few days later, he found the deal wasn’t fair, then it’s a good lesson to be learned - a deal is a deal. Man needs to learn to be a man - male and female. When we went to retrieve our cars out side of the restaurant, the parents still trying to force their son to return the cards. Obviously they thought it wasn’t a fair trade. I told them don’t worry about it, as long as the kids were happy, I’m happy. King never complained about this, either forgot about it or felt it’s a fine exchange.