were paying more attention to the smells drifting through from the kitchen.
Removal of the delicate vanilla soufflé from the oven occurred precisely as planned . Denise adhered to the principles of the Madame Saint-Ange that a soufflé can be waited for but it can never wait; with all guests conforming to it, showing neither impatience nor surprise.
Sitting around the square kitchen table that doubled as a desk, they had just begun to focus on the official purpose for their meeting when the buzzer sounded and talking ceased.
“Denise, if you are even one-tenth as good at addressing our current dilemma as you are at creating a masterpiece of gastronomy, my worries are over,” Steve managed to utter when his mouth was not behaving as though it were a steam shovel, programmed to clear a debris-strewn lot at speed.
“I’m sorry to inform you that your deliverance won’t come from me. The difference is in the ingredients; my soufflé is made with the best ingredients I can buy but our situation is produced by the worst human traits I can detect.
“ I can separate the yolk of an egg from its whites but I am no good at separating greed from the human character. What Jim is asking of us is merciless.
“ Making more money, even a lot more , is not worth the personal pressure or the potential cost to the bank and its customers.
“ About 3 a.m. I decided not to support more than a twenty-four percent increase in our commercial portfolio.”
Both men stopped chewing simultaneously. Mark was the first to respond.
“Please, don’t commit employment suicide. You represent the best and rarest of this institution : a professional who’s ethical and smart.”
“And beautiful.” Steve added
“You’re both dears. But flattery won’t help with this one, gentlemen.”
“I know it won’t help to preach to you,” Mark conceded. “I agree with you in principle , but I found something last night; something that may change your mind.”
Mark grabbed his notes from the previous night’s exploration. One word leaped off the page: DERIVATIVES.
“What the hell is that?” This time Steve was the first to respond. “Have you lost it before the fun has even begun?”
“It’s not gibberish or voodoo. It’s a way to manage risk that goes way back. Listen to Aristotle’s description as recorded in Politics:
‘There was a poor philosopher, Thales, who used his forecasting skill to predict an exceptionally good olive harvest during the coming season.
Because his belief was strong, he gave the little money he had to the olive-press owners as payment for guaranteeing him exclusive rights to use their presses at harvest time; this was possibly the first options contract.
His contract cost relatively little because the owners could never be certain of a good yield and this gave them assurance of some income.
If Thales had been wrong in his prediction, he lost what he paid for the contract but no more. Since he was correct, he made a lot of money by selling his rights to use the olive-presses to growers who had no choice but to pay his high price because Thales had been granted exclusive rights and they were desperate for access to the presses.’
“From what I’ve read, derivatives were created to manage risk by reducing future uncertainties.
“ According to an essay by a senior economist at the Federal Reserve of Dallas, derivatives can help banks contend with the volatility of financial markets; especially interest rate fluctuations.
“This seems to be exactly what we need. If Aristotle advocated options contracts, shouldn’t we? I vote to recommend that our New Products department develops a derivative instrument; probably interest rate swap contracts.
“ If they agree, then I vote we support our boss’s outrageous demand…oops, his apt request.”
Even as Mark was addressing his friends so convincingly, he was struggling with doubts. Could it
Removal of the delicate vanilla soufflé from the oven occurred precisely as planned . Denise adhered to the principles of the Madame Saint-Ange that a soufflé can be waited for but it can never wait; with all guests conforming to it, showing neither impatience nor surprise.
Sitting around the square kitchen table that doubled as a desk, they had just begun to focus on the official purpose for their meeting when the buzzer sounded and talking ceased.
“Denise, if you are even one-tenth as good at addressing our current dilemma as you are at creating a masterpiece of gastronomy, my worries are over,” Steve managed to utter when his mouth was not behaving as though it were a steam shovel, programmed to clear a debris-strewn lot at speed.
“I’m sorry to inform you that your deliverance won’t come from me. The difference is in the ingredients; my soufflé is made with the best ingredients I can buy but our situation is produced by the worst human traits I can detect.
“ I can separate the yolk of an egg from its whites but I am no good at separating greed from the human character. What Jim is asking of us is merciless.
“ Making more money, even a lot more , is not worth the personal pressure or the potential cost to the bank and its customers.
“ About 3 a.m. I decided not to support more than a twenty-four percent increase in our commercial portfolio.”
Both men stopped chewing simultaneously. Mark was the first to respond.
“Please, don’t commit employment suicide. You represent the best and rarest of this institution : a professional who’s ethical and smart.”
“And beautiful.” Steve added
“You’re both dears. But flattery won’t help with this one, gentlemen.”
“I know it won’t help to preach to you,” Mark conceded. “I agree with you in principle , but I found something last night; something that may change your mind.”
Mark grabbed his notes from the previous night’s exploration. One word leaped off the page: DERIVATIVES.
“What the hell is that?” This time Steve was the first to respond. “Have you lost it before the fun has even begun?”
“It’s not gibberish or voodoo. It’s a way to manage risk that goes way back. Listen to Aristotle’s description as recorded in Politics:
‘There was a poor philosopher, Thales, who used his forecasting skill to predict an exceptionally good olive harvest during the coming season.
Because his belief was strong, he gave the little money he had to the olive-press owners as payment for guaranteeing him exclusive rights to use their presses at harvest time; this was possibly the first options contract.
His contract cost relatively little because the owners could never be certain of a good yield and this gave them assurance of some income.
If Thales had been wrong in his prediction, he lost what he paid for the contract but no more. Since he was correct, he made a lot of money by selling his rights to use the olive-presses to growers who had no choice but to pay his high price because Thales had been granted exclusive rights and they were desperate for access to the presses.’
“From what I’ve read, derivatives were created to manage risk by reducing future uncertainties.
“ According to an essay by a senior economist at the Federal Reserve of Dallas, derivatives can help banks contend with the volatility of financial markets; especially interest rate fluctuations.
“This seems to be exactly what we need. If Aristotle advocated options contracts, shouldn’t we? I vote to recommend that our New Products department develops a derivative instrument; probably interest rate swap contracts.
“ If they agree, then I vote we support our boss’s outrageous demand…oops, his apt request.”
Even as Mark was addressing his friends so convincingly, he was struggling with doubts. Could it
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