The Jolly Contrarian

The Jolly Contrarian Substack offers a critical exploration of financial, legal, and technological systems, emphasizing the importance of understanding and managing risks, regulatory complexities, and the interplay between innovation and tradition. It critiques modern governance, highlights systemic issues, and encourages practical, experienced-based decision-making over rigid frameworks.

Financial Systems Legal Analysis Regulatory Oversight Risk Management Innovation and Tradition Governance Technology in Business

The hottest Substack posts of The Jolly Contrarian

And their main takeaways

The LIBOR scandal, part 1: background

79 implied HN points • 08 Apr 24
💰 Finance Interest Rates Derivatives Risk management Banking
  1. Banks have structural interest rate risk, which they manage by borrowing at a low rate and lending at a high one.
  2. The LIBOR rate was created as a benchmark for banks to set their interest rates and trade standardized instruments.
  3. Interest rate swaps changed the game by allowing banks to trade interest rates with counterparties, impacting how they managed their structural interest rate risk.

The Death and Life of Great American Cities

39 implied HN points • 05 Jun 24
🎭️ Culture History Books Social Issues Urban planning Community
  1. Jane Jacobs challenged 1960s urban planning policies that sought to reorganize communities from the top-down, advocating for a bottom-up approach that respects local knowledge and decision-making.
  2. Jacobs' observations highlighted the importance of streets over buildings, the negative impact of planned parks, the value of mixed-use spaces, and the benefits of incorporating diversity in communities to promote vitality.
  3. She emphasized that the richness and adaptability of a community depend on real diversity, which may conflict with the drive for efficiency and homogenization in modern management and city planning.

Vitamins and painkillers — or remedy?

119 implied HN points • 12 Jan 24
💼 Business Management Strategy Consulting Technology Legal
  1. Business offerings can be classified as painkillers (address immediate problems) or vitamins (guard against problems over time).
  2. Painkillers may provide quick revenues, but vitamins are stickier, build better relationships, and offer stable income over the long term.
  3. In the legal operations world, the focus should be on diagnosing and providing practical advice, rather than just masking problems or offering generic solutions.

Happy new year

99 implied HN points • 09 Jan 24
🚌 Education Books Reading Learning
  1. The Jolly Contrarian has been improving the 'user manual' coverage of main agreements on the wikis, especially the ISDA Master Agreement, with more content and multilevel numbering added.
  2. Reading recommendations include 'Bitcoin is Venice' and 'The Master And His Emissary', which provide deep insights into societal issues and the human experience.
  3. An analogy is drawn between skiing off-piste in skiing and exploring unconventional paths in life, work, and business, emphasizing the benefits of stepping away from the well-trodden path.

Watched pots, petards and black ducks

179 implied HN points • 07 Apr 23
💼 Business Risk management Regulation Banking Crisis Management Organizational Structure
  1. Consider supporting independent content creators financially to help sustain quality content production.
  2. Complex regulations like Basel III can be so convoluted that even regulators may not fully understand the consequences, highlighting potential systemic risks.
  3. Banks need to focus on managing both known and unknown risks, including risks that may not be obvious or mentioned in regulations, to prevent potential disasters like financial crises and organizational failures.
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About that ISDA Pt 3: The Preamble

59 implied HN points • 17 Feb 24
💼 Business Legal Contracts Derivatives Market
  1. A preamble in a legal document sets the scene and primes you for the contract, like a story's beginning. It's where important elements are hinted at before they become relevant.
  2. ISDA (International Swaps and Derivatives Association) has evolved from older versions like the 1992 ISDA to the more widely-used 2002 version, highlighting the slow adoption of new agreements in established industries.
  3. The ISDA Master Agreement includes important sections like the Schedule, which fine-tunes termination provisions and tax representations, and Transactions, which vary widely based on the type of swap being made.

But no-one reads this, do they?

39 implied HN points • 20 Mar 24
  1. Legal contracts provide peace of mind, buyers may not need to understand the details, but trust that serious people are handling it for them
  2. Many contracts go unread or untested, relying on good relationships between parties rather than the specifics laid out in the contract
  3. The focus of legal contracts is not just on the words, but on creating an illusion of security and trust that things will generally be okay

Better call ChatGPT

39 implied HN points • 09 Feb 24
💼 Business Artificial Intelligence Legal Contracts Technology Management
  1. The study compared human legal reviewers with large language models, showing that machines performed better overall.
  2. Experienced lawyers had the least agreement on what was important in contracts, showcasing the importance of human judgment in legal analysis.
  3. Utilizing large language models may lead to efficiency gains but also introduces complexities and potential risks in legal processes.

American Bacon drafting

19 implied HN points • 19 Apr 24
📚 Literature American culture
  1. American Bacon drafting refers to legal drafting that looks impressive but lacks substance, similar to disappointing American bacon
  2. The term American Bacon drafting does not refer to actual American bacon, but to legal language that is more for show than for practical use
  3. The comparison of American bacon to legal drafting serves to highlight the disconnect between appearance and reality in some legal documents

The LIBOR scandal, part 2

19 implied HN points • 11 Apr 24
💰 Finance Scandal Banking Legal Ethics Regulation
  1. The concept of interest rates as a tradable financial instrument emerged in the 1980s, thanks to the development of interest rate swaps, marking a significant shift in the financial landscape.
  2. The manipulation of the LIBOR rate involved complex financial processes that led to criminal proceedings against several traders, highlighting ethical and legal dilemmas in the financial industry.
  3. The legal interpretation of the LIBOR Definition in the context of criminal law versus contractual interpretation raised debates around conflicts of interest, contractual obligations, and the application of criminal charges in financial settings.

Little Lamb, who made thee? The Archegos Affair, part 2.

119 implied HN points • 28 Dec 22
💰 Finance Risk management Regulation Compliance
  1. Regulatory margin rules can sometimes worsen financial crises by inadvertently enabling risky behaviors such as concentrated fund positions.
  2. In complex organizations, there is a difference between the appearance of good governance and actual effective risk control. Overemphasis on formal structures may lead to overlooking practical risk management.
  3. Organizations should balance formal risk control infrastructure with experienced, nuanced decision-making, rather than relying solely on rigid systems.

Reliance on legal advice

59 implied HN points • 06 Jul 23
💼 Business
  1. It is important for agents to not disclaim their liability to customers; instead, they should sue their own lawyers if they receive bad advice.
  2. Customers should not be held responsible for the consequences of an agent relying on incorrect legal advice.
  3. Having a clause that dissolves all liability for agents could lead to poor behavior, damages client relationships, and ultimately benefits the lawyers more than anyone else.

About that ISDA Pt 5: Section 1: Interpretation

19 implied HN points • 16 Mar 24
💼 Business Finance Legal History Technology
  1. Section 1 of the ISDA Master Agreement introduces key concepts and rules, important to understand but should not be tampered with.
  2. The hierarchy clause in Section 1(b) establishes a clear order for precedence of documents within the ISDA Master Agreement, preventing inconsistencies.
  3. The 'Single Agreement' concept in Section 1(c) lays the foundation for efficient capital management in master trading agreements, ensuring smooth termination and settlement of transactions.

Fear, loathing, and swap satire

59 implied HN points • 16 Apr 23
🕹 Technology Artificial Intelligence Machine Learning Chatbot Blockchain Internet
  1. Large language models have the potential to offer fresh perspectives and open up new opportunities due to their ability to make errors.
  2. By interacting with a large language model, individuals can generate creative ideas and elaborate storylines that they may not have considered otherwise.
  3. The collaboration between human imagination and large language models can lead to the development of complex and engaging narratives, showcasing the power of technology in enhancing creative processes.

The future of work: Pt 1:

39 implied HN points • 06 Nov 23
💼 Business Future of work Remote work Complex Systems
  1. Lockdown during the pandemic was a chance to test new ways of working and learn important lessons for the future of work.
  2. The discussion around the future of office work is divided between those who believe everything has changed and those who advocate for returning to the traditional office setting.
  3. Human systems and behaviors are complex, and real change in the commercial world takes time to unfold as it depends on deep-seated cultural layers and incentives.

About that ISDA Pt 4(a): The qualities of a good ISDA

19 implied HN points • 24 Feb 24
💼 Business Contracts Negotiation Fairness Confidence Clarity Consistency Simplicity
  1. A good ISDA contract should have qualities like fairness, confidence, clarity, consistency, and simplicity.
  2. Fairness in negotiations is crucial as it fosters trust, strengthens relationships, and aligns interests between parties.
  3. Business relationships often prioritize maintaining trust and goodwill over strict adherence to contract terms, as it is more beneficial in the long run.

JC content update - autumn 2023

39 implied HN points • 24 Sep 23
💼 Business Finance Regulations Change Management
  1. The Jolly Contrarian website operates as a 'pull' resource where users obtain content they want, instead of being bombarded with content they may not need.
  2. Emissions allowance trading is a unique and transgressive product challenging traditional financial boundaries, susceptible to government decrees, and with interesting documentation quirks.
  3. Understanding repackaging and secured MTNs involves complexities like limited recourse and security roles, needing a thorough study of documentation and anatomy.

Discretion and absolution

39 implied HN points • 30 Sep 23
📖 Philosophy Free will Contracts Legal
  1. Discretion is about freedom, choice, individuality, and happiness, but often made to seem complex by lawyers.
  2. Absolute discretion means you either have it or you don't, while reasonable discretion is bound by obligations like acting in good faith.
  3. Having an absolute discretion where a reasonable one would suffice can lead to unnecessary complications and inefficiencies in business relationships.

Drills and holes

39 implied HN points • 06 Jun 23
💼 Business Tech Innovation Market Trends
  1. Customers want outcomes, not the inner workings of legal processes. They care about results, cost-effectiveness, and speed.
  2. Despite predictions of a legal industry revolution, significant changes have been incremental rather than revolutionary.
  3. Various external events have failed to drastically alter the traditional legal industry, leading to the ongoing dominance of established legal practices.

Premium subscribers - hotline

19 implied HN points • 16 Nov 23
🕹 Technology Internet Subscription
  1. Premium subscribers may face issues accessing content due to firewalls and filters from internet service providers.
  2. It's important to communicate with the website if you run into issues accessing premium content.
  3. Subscribers can enjoy a 7-day free trial to explore the full post archives.

Hamlet, legal construction and LLMs

19 implied HN points • 30 Jul 23
📚 Literature Generative AI Literary theory
  1. Writing and reading are powerful human inventions that connect people across time and space.
  2. Large Language Models (LLMs) work by prompting readers to interpret and construct the output, resembling a conjuring trick.
  3. Legal language requires precision and clarity, making LLMs less suitable for legal drafting compared to human writers.

Both a borrower and a lender being?

19 implied HN points • 17 Jun 23
💰 Finance Debt Contracts
  1. Debt securities involve complex processes with multiple bureaucratic steps before they are issued in the market.
  2. If an issuer holds their own promissory note, the debt might be considered non-existent due to the concept of merger.
  3. Bearer instruments lack a history, leading to unique challenges in determining debt continuity and the involvement of clearing systems adds layers of complexity to debt transactions.

Jaws, ChatGPT, and the future of the legal profession

19 implied HN points • 22 Jul 23
🕹 Technology AI Legal Technology impact Language Models
  1. Emerging technologies like ChatGPT may impact the legal profession, but the role of human lawyers is crucial in providing context, understanding, and legal advice.
  2. The motivation for lawyers to maintain complexity and ineffability in legal work stems from the belief that convoluted contracts indicate prudence and value, even with the availability of simplification tools.
  3. Client expectations, fear of change, and adherence to precedent contribute to the resistance towards significant simplification in legal practices despite advancements in technology.

Fire, rebirth, and pace layers

59 implied HN points • 24 Jun 22
🚌 Education Complex Systems
  1. The Great Fire of London in 1666 presented a unique opportunity to reimagine and optimize the city but ultimately, London was rebuilt exactly as it was, showing how persistent and resilient systems can be.
  2. Complex adaptive systems, like cities, operate on different time scales with layers such as nature, culture, governance, infrastructure, commerce, and fashion, each dependent on the layers below.
  3. Lasting change in a complex system requires either a new shock it has not yet experienced or a transformative opportunity that existing layers cannot exploit, showing the need to understand the depth at which change must occur.

On attack, defence and the beautiful game

19 implied HN points • 01 May 23
🎾 Sports Strategy Analysis Risk management Games Complexity
  1. Different values are placed on attack and defence in sports like football based on the asymmetry of payoffs between the two roles.
  2. Defenders focus on conservative, coordinated actions to maintain the status quo, while attackers take big risks to improve the position.
  3. Infinite games, characterized by complex systems and unpredictable outcomes, require the ability to adjust, react, adapt, and capitalize on opportunities in a changing environment.

Worst reasonable efforts

2 HN points • 14 Jun 24
💼 Business Legal Contracts Outsourcing Insurance Customer Service
  1. The concept of 'worst reasonable efforts' is a satirical take on the idea of performing at the minimal acceptable level in contracts and agreements.
  2. Many organizations, such as for-profit insurers, airlines, and rental companies, often operate on the premise of providing 'worst reasonable efforts' to customers.
  3. The prevalence of 'worst reasonable efforts' in modern society highlights the sacrifice of quality for scale and the acceptance of mediocrity in various aspects of life.

What immortal hand or eye: The Archegos affair, Part 1.

39 implied HN points • 23 Jul 22
💰 Finance Investment Risk management Regulation Banking Derivatives
  1. Family offices, even though seemingly benign, can engage in risky behavior that can have significant market impacts.
  2. Securities markets are complex environments where probabilistic risk management tools may fail, especially in extreme scenarios.
  3. Regulations requiring banks to pay out variation margins can inadvertently pour petrol on a fire during market volatility, leading to unintended consequences.

So long, and thanks for all the fish.

19 implied HN points • 06 Feb 23
💼 Business Human Resources Workforce management Employee retention Performance Management
  1. A 'reduction in force' (RIF) and natural attrition are lazy ways of managing staff without true consideration and development.
  2. Lateral quitting should be examined closely, as letting good employees leave unchecked can lead to a decline in workforce quality and a 'drift towards mediocrity'.
  3. Effective people management involves developing and retaining good employees, actively managing underperformers, and avoiding reliance on periodic RIFs or passive attrition.

The history of inhouse legal

59 implied HN points • 23 Oct 21
💼 Business Legal Banking Management Consulting Operations
  1. In-house legal departments in banks have evolved over time from negligible involvement to becoming key players in managing legal relationships and adding value to the organization.
  2. The rise of magic circle law firms marked a period where law firms charged high rates for extensive legal work, benefiting from banks' willingness to pay for legal protection in their big financial deals.
  3. Management consultants stepped in to help banks reduce legal spend, resulting in the development of legal operations teams within organizations to optimize legal processes and costs.

Finite and infinite games

39 implied HN points • 17 Apr 22
📖 Philosophy Ethics Metaphysics Epistemology Existentialism Logic
  1. Carse distinguishes between finite games, which have fixed rules and a clear winner, and infinite games, which have no fixed rules and aim to continue playing without winners or losers.
  2. Infinite games are inclusive and allow for fluid boundaries, while finite games are exclusive and dominate attention while being played.
  3. It's crucial in life to discern when you are involved in finite games aimed at winning, and when you are part of infinite play focused on continuing and evolving.

It’s not about the bike

39 implied HN points • 26 Mar 21
💼 Business Relationships Process Optimization Technology Management
  1. Legal negotiations can serve as a 'significance signifier' of one's commitment in a business relationship.
  2. Before investing in new technologies or innovations, focus on fixing broken processes first to ensure lasting value.
  3. In a crisis, technology should not complicate situations further and should be designed to not interfere with diagnostics and resolution.

The hedge funds strike back

39 implied HN points • 19 Feb 21
💰 Finance Legal Risk management
  1. Hedge funds made a comeback after a ruling in a unique case involving an accidental large payment from Citibank to hedge funds on behalf of Revlon, leading to legal battles and appeals.
  2. The case highlighted issues with operational errors, system design complexity, and the application of legal concepts like restitution in contract disputes.
  3. Exploring books on human error investigations and accidents shed light on organizational risks, system failures, and the human factors behind accidents in various industries.

That was the fourth week.

39 implied HN points • 31 Jan 21
💼 Business Finance Contracts Market Health Technology
  1. Week 04 spans from Monday, January 25, 2021, to Sunday, January 31, 2021.
  2. The internet was abuzz with the market event of January 2021 involving Redditors challenging conventional wisdom on shorting and algorithmic supremacy.
  3. Various recommendations were shared for lockdown survival, including using a rowing machine, a phone game, and listening to feel-good big band jazz.

Dispatches from the Serengeti

19 implied HN points • 20 Aug 21
🎭️ Culture Literature Music Humor History Philosophy
  1. The author discusses a debate over the lyrics of a famous song, questioning the correct word usage and its implications.
  2. The text delves into the complexities of contract law, particularly the issues with governing a contract under one law and interpreting it under another.
  3. The concept of 'culpa in contrahendo' is explored, highlighting the importance of negotiating in good faith and the implications of misrepresentation in contracts.

Robot Nirvana

19 implied HN points • 23 Apr 21
🎶 Music Technology Art Creativity Industry History
  1. Robot Nirvana explores the use of artificial intelligence to recreate music by deceased artists like Kurt Cobain, showcasing the limitations of technology in replicating human creativity.
  2. Music technology has made remarkable advancements, allowing for incredible sound recreation and studio expertise at a fraction of the cost, revolutionizing music production.
  3. Recreating past artistic works using AI raises questions about the redundancy of human creativity and the importance of artists in pushing artistic boundaries forward.

On the last freedom moped out of Ergodi City

19 implied HN points • 09 Apr 21
💰 Finance
  1. Ergodicity is a concept that compares the payoffs of series probabilities with parallel probabilities to see if they are the same.
  2. In scenarios where individuals repeat actions and compound outcomes over time, like in betting games, ergodicity can lead to different results compared to group scenarios.
  3. The concept of time-series probabilities is important in understanding how individual expectations of outcomes over time can be different than group averages, especially in contexts like salaries.

Sense of doubt

19 implied HN points • 19 Mar 21
🎭️ Culture Music Books History Humor Art
  1. Having a sense of doubt is important in various aspects of life, including legal systems and commercial relationships. Doubt can lead to greater depth and strength in relationships.
  2. In the commercial world, trust and credit are crucial, and an excessive desire for certainty can hinder growth and innovation. Fostering relationships and trust can lead to long-term benefits.
  3. Wood has played a significant role in shaping human history, yet its importance is often overlooked in historical narratives that tend to focus on individuals. The narrative we choose shapes how we view history and what questions we ask.

Gizmos, consistency and the meaning of prepositions, and the full-scale map

19 implied HN points • 05 Mar 21
💼 Business Intellectual Property Standardization
  1. Legal practice can be compared to 'gizmo pelmanism', where common standards make life easier for everyone involved
  2. Legal contracts often focus on minute details like specific prepositions, while sometimes overlooking bigger issues
  3. Consistency and clarity are crucial in legal expression, especially when dealing with intersectional contract conflicts