I work in an investment bank. I also specialise in derivatives. In addition, I am a lawyer.
Put that all together, throw in the financial crisis, and what it really means is that life at work has been hectic for me, for many months. The crazy market conditions have thrown up all sorts of unprecedented fires that need to be put out.
That includes, among other things, legal disputes with defaulting clients who will do anything they can to extricate themselves from a deal gone bad.
I can't give details here, of course. Confidentiality, and all that. But if you read the financial news from around the world, you'll get a sense of what I'm talking about. It's a global phenomenon.
Here's one example that I can discuss, since it's from the other side of the world, and very public, and has nothing to do with me:
President says Ecuador will default on debtWhat does this mean? Well, in a nutshell, Ecuador doesn't have much money. We know why. Ecuador sells oil, and oil prices have collapsed, so Ecuador is broke. So Ecuador decided not to pay its creditors.
By GONZALO SOLANO – Dec 12, 2008
QUITO, Ecuador (AP) — President Rafael Correa announced Ecuador will not meet a debt payment next week, making good on threats to default on debts his government considers illegitimate.
Correa told a news conference Friday in the city of Guayaquil that Ecuador will not make a $30.6 million interest payment due Monday on $510 million in bonds due in 2012.
"This foreign debt will not continue to be paid," Correa said. Ecuador will offer a restructuring plan to creditors in hopes of avoiding a drawn-out legal battle, he said.
Correa threatened to default on Ecuador's foreign debt before his landslide victory in 2006, and his government has spent heavily on social programs like monthly payments for single mothers, seeds for farmers and building materials for new homeowners.
The still-popular president recently warned that falling oil prices may force his hand on a default. Oil is Ecuador's top source of foreign income, accounting for 40 percent of the national budget.
.... A presidential commission last month recommended that Ecuador default on almost 40 percent of its $10 billion foreign debt, accusing former officials and bankers of profiting irresponsibly from bond deals.
Correa, a leftist U.S.-trained economist, said then that he would seek to halt payment on the loans and hold foreign investment banks and ex-government officials responsible.
Next, you need to find a reason not to pay. So you set up an official presidential commission and have it recommend that Ecuador should refuse to pay interest on USD $4 billion of its debt. Need some moral justification? Well, just accuse the banks of making irresponsible profits out of these deals. But didn't Ecuador's own government approve of these deals in the first place? Oh. Well then, let's just choose a few government officials and make accusations against them too. Simple as that.
So in the past few months, this is the repeating story of my working life. As mentioned earlier, I'm not involved in the Ecuador matter at all, but I am looking at many cases where the client is broadly just doing the same thing - in other words, anything and everything it can to try to wriggle out of a deal gone bad. That includes employing tactics which are dishonest and unethical, and sometimes frivolous to the point of being baffling.
I spend hours on conference calls and meetings just unravelling and deciphering all this nonsense. Well, on the positive side, I guess this means I still have a job. I think. Haha.
Lots of people must be worried about their jobs right now. Tan Kin Lian had a suggestion on how to save jobs. The suggestion is so simple that I suspected that there must be something wrong with it. This is the problem when I do too much work of the kind of work I do - my mind grows too complicated for its own good.
Okay, let me put it simply. Tan Kin Lian's suggestion is simple. And good. Read it here.