Locally-Capped Contract

Categories: Company Management

You need to kill the leader of a rival drug cartel. However, he's hiding out in Manitoba, where your hit men can't reach him. So you hire a local to do the job. Locally-capped contract.

Another (far more common) version has to do with investment products.

You buy into a structured financial product. It provides a guaranteed payout, along with a bonus tied to some measure of market performance, like the S&P 500. So, every quarter, you receive $10,000, plus a certain extra, based on how well the stock market did during the previous three months.

However, the bonus is capped. Any move about a 5% gain in the S&P doesn't count. If the stock market goes crazy and rises 15% in a quarter, you don't get a massive bonus. You only get the bonus tied to 5%.

"Locally-capped" means that this cap only applies on a quarter-by-quarter basis (or whatever time period is in focus). It stands in contrast to "globally-capped," which places an all-time cap, but not a cap on any particular time period.

To put it another way, locally-capped investments have a cap that applies to a shorter time period. However, the cap is constantly resetting. Once a quarter (or whatever time period) is over, everything gets a clean slate.

For a globally-capped investment, once it reaches its maximum amount, you only ever receive that amount. It doesn't reset for the next time period.

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Finance: Who benefits from unions?11 Views

00:00

Finance allah shmoop who benefits from unions And while union

00:07

workers duh Maybe a better question is who doesn't benefit

00:11

from unions Well okay okay Union workers exist because workers

00:16

were abused at different points in our country's history Ever

00:20

read the grapes of wrath Yeah Joad family Peach picking

00:23

for like five bucks a day or less And then

00:26

there's norma rae great film should see it won the

00:28

academy award and remember the speech You love me You

00:31

love me That union in a cotton fabric mill lots

00:36

of abuse there So yes unions exist in reaction to

00:39

bad acting on the part of the man and they

00:42

collectively bargain against the man on behalf of the workers

00:47

who belong And they made the country a whole lot

00:50

more fair and square So thankyou unions for that Historically

00:53

well guess what time moved forward and corporations today frequently

00:58

don't want to deal with unions They dictated salaries and

01:01

benefits as they saw fit and well the workers pushed

01:05

back Union's got uppity and then corporations got down ity

01:10

all right And the result was that all whole bunch

01:12

of unionized shops were forced to hire a lot more

01:15

Workers than they really needed That is that the man

01:19

was required to hire thirty seven people instead of the

01:21

twenty three he actually needed And the work rules that

01:24

originally were intended to protect made it hard to train

01:28

and to fire like really talented people did not want

01:31

to be paid like the average joe with the same

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career path But really untalented people loved the fact that

01:37

it was hard to get fired inside of a union

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So you got all kinds conflict inside of the union

01:42

as well Got it And you know the firing thing

01:45

ever been to a d m v car place that

01:47

we get your license Wake up They're still all right

01:50

Well let's Talk to a now bankrupt newspaper company who

01:53

couldn't downsized fast enough to accommodate the assault of the

01:57

lower margin internet delivered competitors Local newspapers were highly unionized

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at the time in the nineties and union rules would

02:04

not let them fire workers fast enough And then the

02:08

industry revenue model changed really fast Newspapers could not absorb

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the cost changes fast enough They couldn't fire people So

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they all went bankrupt And then all the workers were

02:19

out of jobs and everyone ended up being out of

02:21

work Yeah well that was a fail on the unions

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part They didn't move quick enough So who doesn't benefit

02:26

from unions Well the largest union in the country the

02:30

u s government Our own g men have the largest

02:33

set of union workers in the country and they cost

02:36

taxpayers of fortune They can almost never be fired They

02:40

have spectacularly expensive benefits and the real salaries If you

02:44

do fair math are actually very high Taxpayers pay for

02:48

government unions Often the union worker has a way better

02:52

deal than the taxpayer him or herself who supports that

02:55

union worker Yet taxpayers keep voting in raises and benefits

02:59

and all kinds of rules that let the government higher

03:02

Thirty seven people for jobs that really only need fourteen

03:05

We can't figure out the rationale there either maybe the

03:08

taxpayer someday you'll wise up Police officer works thirty years

03:16

on the force from age twenty two Two fifty two

03:19

not darth vader Kind different force She can then retire

03:22

and make eighty five percent of what her average pay

03:25

wass for her last three years And of course in

03:29

those last three years she does massive overtime and extra

03:32

work toe goose up her eventual hundred seventy five grand

03:35

a year Pay Ask your folks how they feel about

03:38

a cop making one hundred seventy five grand in a

03:40

year All right well she then retires but for the

03:43

remaining thirty years that she'll live she'll get one hundred

03:46

seventy five grand a year That's her pension that's what

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cops get in california Welcome to the left state here

03:53

So she might claim that she quote on ly unquote

03:56

made one hundred seventy five grand We think that's a

03:59

lot for cops getting cats out of trees But in

04:01

fact for the thirty years she worked she actually cost

04:04

the taxpayers something like double that amount plus benefits So

04:08

it isn't that joe taxpayer doesn't believe the officer has

04:12

worked really hard The question remains Does that person deserve

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so much better pay And retirement and benefits and all

04:20

the other stuff then joe taxpayer who's funding her well

04:24

Police have a great union and jury's still out on

04:26

a lot of these questions But you know what they

04:28

say It's the government office who writes all the checks

04:31

Unions can't live with them Yeah that's it We're done 00:04:34.238 --> [endTime] that that's where they stopped the conversation

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