“Mind The Gap!” – The life and times of a man on the move Episode 48
Hippy-ocrisy at Facebook stirred FX leaders, WeChat block was inevitable, Let’s meet the IBs of South Africa, and video interviews are us!
In this weekly series, I look back on what stood out, what was bemusing, amusing and interesting during my weekly travels, interesting findings within the FX industry and interaction with an ever-shrinking big wide world. This is purely observational and for your enjoyment.
Monday: Two faced-book
Following my outing of the polarizing social media platform Facebook as the most hypocritical internet company to have ever played a major part in digital media last week, I have been inundated with sentiments of agreement from technologists and brokerage executives from across our industry.
Facebook, which considers itself a major internet service provider in the same way that Google does, has ideas and aspirations far higher than its station, as really the company is, as it has demonstrated many times, no more than an utterly biased social media dinosaur which has its own completely unmoderated agenda.
What irked my dear colleagues and resulted in a deluge of mail for me to eagerly sift through as this week got underway was the sheer audacity of a non-entity such as Facebook in its attempts to start its own very shady currency, yet ban us all from using it as a customer acquisition platform when our industry is properly regulated and provides the trading of proper centrally-issued sovereign currencies and listed derivatives.
So, in keeping with Facebook’s odious policy toward the public and its own members, it is by proxy creating an environment which it moderates from its hemp-clad, mung-bean chomping, hipster-inhabited trend-center in Silicon Valley, with no fallback for customers who are rash or misinformed enough to waste money on its non-currency, meanwhil blocking everyone that purports to do their business properly.
What you have there, is a company that dislikes its own members and customers so much that it is encouraging them to invest in absolute nonsense, and blocking anyone who wants to offer them a good product.
The blocking, by the way, extends to the removal of business Facebook pages and groups for unexplained reasons. Are you sure you want this ethos behind an actual currency? It flies in the face of the transparent method everyone wants these days.
This is a line of thinking that has pervaded every area of its social platform, too, including political bias toward its own fluffy, California Democrat, anti-American ‘liberal’ extremism and the taking down of news articles and definitions by members which aren’t offensive but don’t fit Mark Zuckerberg’s extremely odd view of the world.
Hypocrisy comes in two fit-all sizes here, the first being that rather than allow the regulated brokerages to advertise genuine products to a retail audience, Facebook has banned all OTC derivatives advertising yet wants to promote its own dangerous, unbacked nonsense currency, the second being that capitalism is the lifeblood of social media yet its ‘executives’ if you can call them that, purport to be vehemently anti-capitalist.
Well, Facebook, that is not how to operate social media and it is not how to operate an internet platform. It is downright irresponsible and our industry should stand forth and demonstrate that retail customers should not be tempted to look toward adverts on Facebook for any form of options when considering trading, because Facebook want you to lose your shirt.
Tuesday: No more Wechat orders says Hong Kong… which is the Chinese Government.
It was only a matter of time before the Chinese government blocked order routing and execution of trades via WeChat.
WeChat is far more than just a messaging service, it is a totally integrated business and social tool from which over 935 million people in mainland China operate their entire lives from completing a multi billion Yuan merger and acquisition deal to organizing playdates at kindergarten.
Email practically does not exist, and China’s integrated Baidu-powered smartphone platforms are in another league compared to anyone else in the world.
The government some years ago made its mind up that if it is to maintain full control under its Communist system of over 1 billion highly educated, extremely well organized people, it would have to do so by giving them what they want and then using a standardized electronic platform that everyone must use, to exercise the control.
This has worked perfectly, as the government has absolute control over everything from the aforementioned metaphorical M&A deal to the metaphorical playdate and can moderate everyone via their bank accounts, business head offices, employers, and every firm that they are a customer of.
It is the high tech way to control a high tech nation.
The advantage of making everyone’s life easy whilst at the same time giving the government with its 2 million internet service employees total control over every area of Chinese life is also the disadvantage to external businesses wanting to do business with China via WeChat, which is pretty much the only way of doing so from outside.
With that restriction comes lack of payment channels as UnionPay is the only available method due to its integration with WeChat and its mandatory government ownership, as well as the ability for the government to simply chop off entire business sectors with the flick of a switch.
Tuesday’s decision by Hong Kong to ban the use of WeChat for sending and receiving orders was not surprising.
Back in 2017, Chinese firm Dalian Wanda Group said off the record that thewere were rumors of a ban on using WeChat for order recording, however at the time it was commented that “WeChat and QQ are more efficient in reaching people compared with making calls,” said Wang Ming, chief operating officer at Shanghai Yaozhi Asset Management.
“If you want to borrow or lend money, buy or sell a certain bond, just send it to the groups and when someone is interested you can then have a private conversation.” Wang said his firm did not have rules around recording pre-transaction communications, but employees should try to confine their WeChat or QQ messaging to company computers, for recording purposes and that any deal-related transactions that took place on people’s personal mobile phones would not be tracked by the firm.
That is the problem. Orders of any type, and business of any type cannot be monitored by the government once it is off Chinese shores, and this is why blocking takes place.
In October 2017, we reported that the Hong Kong SFC had sanctioned Xu Tao, a former CICC investment consultant, for findings that he used his mobile phone and WeChat messaging application to accept order instructions from 13 clients between February and August 2015, in violation of the SFC’s Code of Conduct and the internal policies and procedures of CICC.
So this was coming, and we all could see it. Basically those who conduct IB business via WeChat, which is a vast number of people, could get in serious trouble for doing so, with the outcome being one of two things – either being cut off and any assets kept in China frozen, or being picked up by the authorities when arriving at an international airport in China.
Wednesday: Let’s kraak to Johannesburg
This year, I will be once again heading to Johannesburg to see a number of high quality introducing brokers, in a nation in which the relationship between client and IB is paramount.
In doing so, I will be there with some Australian FX technologists and analysts, as well as locally based South African FX order and execution analytics specialists.
Transparency is everything these days, and my conversations on Wednesday with various introducing brokers with high levels of assets under management in Johannesburg, along with some of the high net worth trading community there, all agreed that today’s investors with managed accounts as well as self-directed traders want proper, impartial analytical tools with which they can analyze the quality of execution from their brokerage and its liquidity provider.
WIth regard to the stifling of international business in Australia, one such programmer told me “I am seeing the same old message except that I dont actually think there will be much change, and some APAC orientated firms will have to think Japan as there is nowhere else to go. Elsewhere, retail will evolve to adapt to the lower leverage, and new toxic products will be developed and life will go on as retail clients get suckered with the same ploys as they always do. We therefore need to look to similar regions, with similar regulatory environments, and a similar work/life culture and South Africa is certainly aligned.”
He is right. It is well regulated, has top quality banking infrastructure and high speed internet, a very skilled workforce and is the gateway to the entire continent for quality business.
“When I talk about a platform that will make their clients money, this usually means that they were given a detailed demo and the broker rejects it in that they won’t allow retail clients to use this platform. These are the same people and brokers who pronounce they want their clients to make money, but are interested in using the tools for B Book exposures, therefore I have developed a new product which offers continuous capital protection. This means that hedge funds or active fund managers now have a new tool that allows them to hedge downside market risk, that will actually make them money” said one platform developer.
“The hedge is put on when the price of the instrument or portfolio will fall, and taken off when the price will rise. The capital protection will actually make them alpha return above buy, and hold. This is therefore tool a generation ahead of anything else, and I will come to your private event in South Africa to demonstrate it” he said.
I very much look forward to that, and those who spend more than a few days there may get to experience one of my DIY safaris!
Friday: Do you outsource or do you GoPro?
Actually I did not GoPro, I went Panasonic.
The time has come to teach myself some editing skills, and in doing so I had the somewhat interesting task of perusing eBay for second hand digital recording hardware.
A lifelong fan of photography, I have always been an advocate of buying second hand camera equipment, most of which I have had for over 30 years and was purchased used even then yet still returns very good results on celluloid film.
Today, however, in order to assist brokerages and technology vendors in their quest to present themselves on video, high quality equipment and editing software is required, so now you will be able to approach me to produce quality, professional standard video interviews which can be published on FinanceFeeds and will be edited to the standard of commercial television companies.
My choice of Panasonic HC-VX980 with Rode professional external microphone and a Leica lens will be the basis for many firms to be able to get their message across and introduce their executives to their B2B and B2C client base via FinanceFeeds on a far more accessible and cost effective basis than would otherwise be achieved.
This Friday, the equipment was ordered and I conducted some very successful tests of editing software.
I have spent the last several years interviewing and presenting on various televised media, and by doing the production in-house, we can now do this for you at a low cost.
In this industry, due to its very high tech, online nature, I have always considered that it is vital to get video messages out to clients, to show the viewpoints of executives and to demonstrate the persona behind the business.
FinanceFeeds has a vast and very high quality audience of FX industry professionals, partners and high net worth traders and we are the only established media entity in this industry with the ability to produce TV-standard video media.
Give me a call, and present yourself and your business proudly to your audience!
Wishing you all a super week ahead!