Eldon-Online

Hungry Bankers

With bankers ranking around, or maybe just under, politicians in the popularity ratings, having fallen well behind lawyers but still just maintaining a lead over sex offenders, I note that they now appear to have encountered hard times. That said, certain investment bankers are not having to pull in their belts too tightly, as Howard Winn (In his "LaiSee" column - South China Morning Post) pointed out the other day when he showed scant pity towards Lloyd Blankfein's huge drop in salary to a miserable USD12m. (I note, Howard, you generously called the amount "earnings").

 But not ALL bankers are in easy street. I was much intrigued by a report in that purveyor of quality news in Britain, "The Sun" newspaper the other day where it told the tale of a banker (a female one) who was reportedly jailed for 15 months after biting off the top of a gentleman's ear. The poor chap was having a quiet drink with friends - well maybe not that quiet as it was a stag night - when the lady rushed over and bit off the ear. Even after conviction it remains unclear what caused the attack.

Surely you can picture the situation. With bankers being vilified everywhere, with self- esteem clearly at an all time low, and faced with the prospect of maybe being made redundant or worse, or losing large chunks of pay just like Mr. Blankfein, it is leading bankers to resort to desperate measures. But whereas in the past they only wanted blood - now they apparently want flesh too.

 Actually, you could be forgiven for thinking that I have a long term hatred of bankers, but having been one for 40 years that would be a trifle hard to countenance. I feel very sorry for the victim in the case above, but I have to say that the banking profession - or parts of it anyway, seem to do nothing but thumb their noses at the fact that times have - or certainly should have - changed.

 I have been involved recently, wearing one of my variety of hats, in a series of structured discussions with bankers in cities around Asia, and somewhat less structured conversations in the Middle East. All were commercial banks. And the discussions have had a thread of similarity attached, in every place; the perception of banks and the people who work in them. I have to say, it is less marked in Asia than it seems to be in Europe particularly. But share prices are affected across the Board and it matters not whether you are a good, clean, unbailed-out bank, you are nevertheless tarred with the same brush as those who have not been so clever.

But there is not much point in complaining, because people won't listen anyway. You actually have to do something for yourselves. Every bank I have spoken to brought up the subject of service. I agree. In a world where banking products are easily copied, and where they cannot be differentiated significantly, your points of competitive advantage revolve around service. A breadth of product offerings sure, as long as you do them well, and deliver them easily, effectively, and efficiently - and talk to your client base to find out how they have changed.

 In Asia as well as in the Middle East, the demographics are different as are the expectations, from region to region and country to country. If you are 55 years old, and running a financial institution where the average age of your clients is 32, do you actually know what they want - or are you giving them what you think they should have, delivered in what they at least would consider to be an old fashioned way?

 If that is what you are doing, it won't help to change the public perception of bankers, who will become more and more depressed and instead of biting off your hand for new business, they will be biting off your ears!

Is It Just Me?

 While the world to our west continues to stumble and shake its way through a wide variety of woes, uncertainties and yes, silliness, there are at least some things happening in Asia that should give us present and future hope. Myanmar for one is high on my list - and here I think the whole world, for once, is holding its breath in unison hoping that nothing will derail the positive changes that have taken place in that country recently.

And although you may see it differently from me, the recent publicity given to the ousting of a highly placed political leader in China is a positive change. A public display of disaffection related to someone of such a high rank would not have been thinkable until fairly recently. Possible links to crime notwithstanding.

Asia continues to mature ... to come of age, with of course the notable exception of North Korea – but that is a completely different story, and perhaps one that has a different ending in store. Watch that space, I suggest.

 Meanwhile the west wobbles.

Job figures in the USA once again, and as commented on ad nauseam in these columns, have not proved to be as robust as had been hoped. It should never be a surprise. But it led once again to the inevitable sell-off in the stock markets. Europe, meanwhile, meanders towards the odd election. In particular President Sarkozy is looking a little healthier after his handling of the outrage in Toulouse, but although gaining on Francois Hollande he is far from being out of the woods. The future for saving the Eurozone if Hollande is elected looks bleak. And Britain's Conservative Government is looking less and less in touch with the people, even though some of the things they are trying to do are possibly sensible - but the way in which they are being introduced is winning no friends.

The media everywhere is still bashing the bankers indiscriminately. Gotta hate someone – and take the heat off yourself!!

And whilst in the West, some oddities and some amazements. 

Like the idiot who jumped into the River Thames during the annual Oxford versus Cambridge boat race, and who could have lost his life as a result, (a wish of his apparently), protesting again elitism. His five minutes of fame (and let's hope the media just ignore him from now on), ruining the hard work and sweat of 18 athletes who have devoted their lives to reaching this achievement. Eloquently stated by Oxford’s rower Will Zeng when he wrote:

 “When I missed your head with my blade, I knew only that you were a swimmer, and if you say you are a protester, then no matter what you say your cause may be, your action speaks too loudly for me to hear you. I know with immediate emotion, exactly what you were protesting. You were protesting the right of 17 young men and one woman to compete fairly and honourably, to demonstrate their hard work and desire in a proud tradition. You were protesting their right to devote years of their lives, their friendships, and their souls to the fair pursuit of the joys and the hardships of sport. You, who would make a mockery of their dedication and their courage, are a mockery of a man.”

Pictures of the grinning Boat Race “protestor” will hopefully be replaced by something less enjoyable to him when he gets jailed without any attendant publicity.

But of course, the “protest” has far wider implications. In an Olympic year in London, how many more people in a misguided, or purely publicity-seeking venture, will try and create disruption to events being contested by hard working, dedicated, single minded and, in many cases poor, representatives from around the world.

 And staying with the oddities theme, I read that the authorities in New York are cracking down on the use of potentially offensive words in school tests. Amongst the words bizarrely (okay, bizarre to me anyway, perhaps not to you) banned by the city’s Department of Education are “dinosaurs”, which might offend creationists; “birthdays”, as Jehovah’s Witnesses do not celebrate them; and “homes with swimming pools”, because not everyone has one. Quite!

Oh dear! Whatever next, or is it just me that thinks the world has gone mad!!

Meanwhile ... Back In The Real World

As Hong Kong waits with breathless anticipation for further raunchy revelations or alleged underground illegalities to emerge, aimed at besmirching the candidates in the race for election as the city's next Chief Executive, the world around us meanwhile has been witnessing some rather more serious issues that should be commanding greater attention from our somewhat parochial media. 

Elections, for want of a better or more accurate description, have taken place in both Russia and Iran during the last few days. The North Koreans meantime have, once again, successfully pulled the wool over the eyes of a number of countries by offering to talk about the cessation of their own nuclear ambitions in return, as usual, for food to feed their starving masses. And the odious Assad continues to kill his Syrian countrymen, women and children without conscience or any regard for humanity. Like father like son, I guess.

In the case of Russia, the election result which gave back Mr Putin the Presidency he had temporarily had to give up, came as no surprise. Well, maybe not entirely true. While the result was never in doubt in the minds of the foreign community, it surprised the people inside Russia who had been protesting en masse against his "leadership". Perceived to have had a tear in his eye when acknowledging the cheers of his supporters (he said it was the cold wind that caused the damp eyes), maybe he was crying about the fact that he had to pay people to stand and wave their flags in his support.

 But although this was supposed to have been a fair and democratic process, there are certainly not many (actually, not any) people I have spoken to who believe it to have been the case. Allegations of fraud are rife, amid concerns that this marks a reversion to the bad old days of dictatorship. We can but hope not.

On the face of it, better news from Iran - but is it? 

In the 2 March elections for the legislature, a high turnout of voters saw a great amount of support for those allied to Supreme Leader Ali Khamenei against President Mahmoud Ahmadinejad. Almost ensuring that Ahmadinejad will not be re-elected President next year. And while the Supreme Leader is not exactly a fan of the West, he is potentially less volatile than the current President.

But how will the President react to this result - given his history? Probably quite badly, but maybe not immediately. There has been much talk in defence circles recently about the heightened level of concern surrounding Iran's nuclear capability and its attitude towards Israel. There is also concern being expressed by the same circles about Israel's potential action - rather than its reaction. The major question being "who strikes first". Not, you will notice, an "if" - but almost a foregone conclusion that a pre-emptive strike is more probable than possible. That surely is worrying.

And still in the Middle East - what about Syria? A matter for the Arab League to sort out -  Western forces really should not intervene, but this is getting to be too much. Whilst I can understand the comment made by a former British Ambassador to Syria who said that even if Assad goes the same way as Gaddafi and Mubarak - hopefully the former in my view - there is no guarantee as to what we might get by way of replacement. A regime not so cold blooded as Assad surely, but then again and regrettably, when the first wave of euphoria at the toppling of Assad is over there will be many scores to settle. Acting under orders or not, you won't get much sympathy from a mob baying for retribution. 

Yes, North Korea has pulled it off once again. How many times is this?  "If you give us some food we will be happy to talk about not proceeding with our nuclear capability"  At least feeding some of the people is the right thing to do from a humanitarian perspective, but come on people - been there, done that, or prove me wrong - Please!! And by the way - nothing on the discussion table about stopping nuclear supplies to Iran?

But, you say, why should any of this bother Hong Kong? We have no political strife, only political satire. We are economically okay. What does a Russian election, a bit of North Korean kabuki which we have all seen before, and the actions of some mad people in the Middle East have to do with us?

Well, potentially quite a lot actually.

If Russia reverts to its old ways, repression, communism, "four legs good, two legs better", markets around the world will get nervous, and China is a little close in proximity to Russia.

North Korea will remain quiet for a little while, as it has done in the past while it consumes its food (not sure who gets it, but looking at the size of the new leader I can make a guess). But then it will start to get a little belligerent again, as it has done in the past. Let's think about this. The "boy", to remain in power, needs the support of some octogenarian generals who will see, at last, an opportunity to do something they have wanted to do for a long time. Something dramatic. They won't care, but China is a little too close for comfort.

If Ahmadinejad wants to make a point to the Supreme Leader that he still has power and, like a cornered snake, decides to attack first then any semblance of stability in the Middle East goes out of the window. This will of course impact the developed world, in the midst of its fragile recovery, and it will impact China. 

And if China is impacted, so too will Hong Kong be, because most of our eggs have been invested in the land mass to the north of us!

It is not a comfortable situation in which we find ourselves, while we hide our sniggers behind our hands at the discomfort being felt by at least one of the candidates for Chief Executive. But if the global situation is not enough to concern us - or at least make us aware that there is a real world out there - also give some thought to the reaction of Beijing to our Hong Kong blues! Could they by now be fed up with their potential poster child? Will they now say enough is enough? They had their chance, but now Shanghai is going to be positioned as the financial centre for China while we really do become what others have predicted - just another city in China.

Our fate, I would argue, is clearly in our own hands.

Isn't It Time To Bite The Bullet?

Back to Europe yet again for this Blog because, whether we like it or not, what happens there is ultimately going to affect us here in Asia. It is all very well for us to continue to pat ourselves on the back and say we are in good shape in places like Hong Kong, but I think we would do well to remind ourselves of the Boy Scout motto “Be Prepared". 

But before I spread more gloom and despondency, as in recent writing, I remarked to a good friend a day or so ago that after all this prevarication, on and off discussions, no decisions, and “will they won’t they” diplomacy, it was probably time that the major players took a deep breath and decided to bite the bullet

Talented man that he is, I got this by return.

 

An original, no less.

But he doesn’t stop at creating cartoons. We were discussing the European events in September or October in the wake of a stock market up-turn, - “a frenzy of blind optimism”, he said, "rather flimsily based on rumours that European leaders were suddenly ready to act”. “Where did that come from" he added "they hadn’t taken any action in the previous 18 months, so “sudden” was rather unlikely”. And so it has been proved.

Clearly one cannot take a snap decision over something as complex as this, but by the same token one cannot delay forever. There is certainly no shortage of advice out there from the media, the professionals, the laymen and the politicians, but little consensus beyween them. Suggestions run the gamut of reverting to the original Eurozone members and letting the "new" joiners either sink or swim in another pond. That, to me as a non-expert, seems to be a reasonable suggestion, but it leaves the big question of what do you do with the remaining 21 members? Anarchy in their own countries perhaps, spreading into the rest of Europe? It would seem there are enough people out there who are ready for a fight.

Or let Germany move out from the Eurozone and do its own thing. There appears to be a growing swell of public opinion in that country which runs along the lines of "how much longer are we expected to bail out people who cannot balance their own books?" The trouble for Germany would be that going it alone would see an appreciation of their currency that would have an immediate impact on its ability to export and earn revenues, bringing Germany to its knees.

There are more variations on a theme than those written by Elgar. But the time has come for real leadership from a group of politicians whose re-election hopes must be made secondary to the main role of resolving the crisis. They would work together with organisations including the IMF, and the financial community and the European Governments with a view to coming to a decision - and then implementing it! (I saw an article today that said the IMF should not get involved – or at least the non-European members should speak up against a bail out coming from the Fund. A short sighted view, I think, because this is a global problem).

It is important to get this resolved because the longer it drags through the winter months, and the uncertainty lingers, the more chance there is of matters turning ugly – and they will not just be economic issues but social ones. “Occupy Wall Street” will become focused on real issues and develop a sense of purpose. It will spread. We can do without that .

And for us in Asia, we are not immune. China is going through a leadership change that will take months to settle down, and the current level of inactivity will continue. We have our own – and rather ridiculous – “Occupy the space under the Bank because it is covered, but protest about the property developers” movement in Hong Kong, and also a leadership election. Korea is moving into an election year in 2012, while Japan seems to be having trouble keeping a Government at all. And that’s just the politics. Economically in Asia we are beginning to feel the effects of reduced orders, and rising inflation. Unemployment too, is an issue amongst the “young” populations particularly in South East Asia – which will lead to a testosterone imbalance, and add more anger and fuel to the fires of unrest that are already bubbling under the surface.

And from a crisis that had its origins in the USA – an economy that itself is still not out of the woods – and has spread with alarming and amplified effect vengeance into Europe, we need a resolution before it gathers more potency and hits us.

There is no “soft” option really – and measures that will actually resolve the problem are likely to be painful – but something has to happen, and be followed through.

Now is the time to bite that bullet.

 

What's That Smell?

Here's the scene.

You go into a bathroom on a plane. It smells really really bad but you're desperate to go. You finish, wash your hands but the smell is still there when you leave. The person outside wanting to get in after you, enters, looks back at you as if you were the one who had made the smell, and clearly thinks you need to see a doctor to check on whatever is wrong with you - and you feel guilty, despite the fact you were not the originator.

The parallel? The investment banking community in particular, but together with commercial banks, regulators, rating agencies, politicians et al create a bad smell - especially over matters like bonuses and pay - right minded and some sensible commentators and practitioners go in to try and bring some semblance of order, perspective and reality to such payments, but the original greedy culprits are still out there shovelling in the bonuses, totally oblivious it seems to public opinion.

 

This is going to end in tears, eventually.

I have just travelled from Canada (some semblance of order, I thought) through London. I had an early evening business meeting to attend with a colleague I had not previously met, and with the West End of London being mutually reachable territory we agreed to a lobby lounge in a location that neither of us knew much about. The lounge was full and we had not booked, so we went to find a seat in the bar. Mistake. You couldn't move comfortably because of the crowd - none of whom were going to allow you any space - and all you could hear amongst the popping of champagne corks were Hooray Henrys (and Henriettas) braying about their latest financial triumph.

It is clearly not enough that some European Governments (isn't it interesting that they all seem to be in the "sunshine belt" - except Ireland which at least looks as if it is making some good progress) are in dire straits because they are spending more than they "earn". And that their attempts to rein in the excesses are leading to riots.

You know what? There is going to come a time when the disadvantaged (in their eyes), are going to take seriously the fact that they are no better off than they were 10 years ago. Fact! New jobs are still hard to come by, there is rising inflation and a lack of income on their deposits, if they have any. But by contract there are still members of the community out there who are not affected. And they are getting richer. The gap widens. And as it widens, I suspect patience will narrow.

If patience narrows, intolerance grows. The nice cars on the streets - whoever they belong to, will indiscriminately be targeted for damage. The nice second homes that are left empty might gather unwanted occupants, who have the force of the law with them - not with the absentee owner. The places where "smart" people go will become targets for protests. Not a pretty scene, is it?

I must reiterate my views on bonuses and pay. I am not against them, as long as they relate to genuine value added and a job well done, using money that has been entrusted to you by investors or indeed using your own money. But not if you have been bailed out by Government and are now sticking your thumb to your nose because it hasn't affected you. You are then "playing" with other peoples money - and even if you lose, you still seem to get paid, or you move elsewhere equally lucrative.

People working in financial markets particularly have, over recent years, been receiving payments that the majority of people can only stare at and maybe dream about 10% of the amounts paid. It reached levels beyond anything linked to inflation and general increases in living standards - and if it is just left to continue unchecked - then don't be surprised if the world turns on you. Adapt to your surroundings and take notice of what public opinion is saying.

If you don't, then you might just end up with the contents of the bathroom being tipped over your own head - and instead of wondering what the smell is, you'll be sitting in it!

Reflections - Of Worms and iPads

In recent years I have been saddened by the things that people can no longer do in our so-called "civilised" and modern society that would have been commonplace in my time.

Aged seven and eight years old I would walk down to the end of our road and catch a bus to school by myself, get off at the right stop, walk the rest of the way to school, and come home the same way. Now, it seems, if an innocent child wanders off they become at risk of being snatched. The rise of child pornography surely sickens any right minded person, but such appears to be the demand for its production that there is obviously a substantial enough depraved community.

And we now seem to need to be protected from ourselves by laws, rules and regulations because we have stopped being aware that we need to take responsibility for ourselves through common sense. We no longer understand what "principles" mean, therefore we try and legislate them. We eat too much of the wrong thing, but we can get pills to help us from dying of gluttony. Everything we eat and drink needs to be labelled, so we are at least well enough informed to know how we are killing ourselves!

The trouble, for me at least, is that this is irreversible. George Orwell, author of "1984" which, like some of his other books railed against totalitarianism, must be smirking quietly to himself (he was a man of wit) in the knowledge that actually it didn't in the end need communism to introduce the concept of a nanny state and "big brother is watching you" into our lives; we managed it all by ourselves!

So before I wander into a state of melancholy, I thought I would share with you something I received through my virtual mailbox a day or two ago that summed up my thoughts pretty well. Now don't get me wrong - some of the changes that we have made in modern times, like the banning of smoking are clearly beneficial to the community as a whole - but what follows really reflects the things we did, with a few amendments of my own.

First, we survived being born to mothers who smoked and/or drank gin while they carried us, and lived in places made of asbestos with no indoor toilets and just a zinc bath for ablutions.

They took aspirin, ate blue cheese, bread and dripping, raw egg products, loads of bacon and processed meat, sausages (with real meat in them), tuna from a can, and didn't get tested for diabetes or cervical cancer. (And before you start wittering about life expectancy, my Mother will be 92 next week, and her sister 94 next May!)

Our baby cots were covered with bright coloured lead-based paints. We had no childproof lids on medicine bottles, doors or cabinets and when we rode our bikes, we had no helmets.

As children, we might ride in cars with no seat belts or air bags.

On a summers day we drank water straight from the garden hose and NOT from a bottle.Take away food was limited to fish and chips. No Pizza Hut, McDonalds, KFC, Subway or Nandos. We shared one soft drink with four friends, from one bottle and NO ONE actually died from this.

Even though all the shops closed at 5:30 pm, as well as on Saturday afternoons and sometimes Thursday half-days, and didn't open at all on a Sunday, somehow we didn't starve to death!

We ate cupcakes, white bread and real butter made from cow's milk. We drank soft drinks with sugar in them, but we weren't overweight because....WE WERE ALWAYS OUTSIDE PLAYING!! We would leave home in the morning and play all day, as long as we were back just before it got dark, or when we had been told to be home. No one was able to reach us all day - no mobile phones. And we were OK.

We would spend hours building go-carts out of old prams and then ride them down the hill, only to find out we forgot the brakes. We built tree houses, made camps and played on river banks -or in the river itself, in our underwear - unsupervised. We did not have Playstations, Nintendo Wii , X-boxes, no video games, no 999 channels on SKY, no video/dvd films, or colour TV, no personal computers, no Internet or Internet chat rooms..........WE HAD FRIENDS and we went outside and found them!

We fell out of trees, cut ourselves, broke bones and teeth and there were no lawsuits from these accidents.

We ate worms (admittedly, usually by accident) and mud pies made from dirt, and the worms did not live in us forever.

We were given catapults for our 10th birthdays and our parents taught us how they should be used safely.

We rode bikes or walked to a friend's house and knocked on the door or rang the bell, or just yelled for them!

Not everyone made the rugby/football/cricket/netball team. Those who didn't learnt how to deal with any disappointment. Getting into the team was based on MERIT. Our teachers used to hit us with canes and gym shoes and throw chalk or even the blackboard duster at us if they thought we weren't concentrating....

Our parents would tell us to ask a stranger to help us cross the road, and the idea of a parent bailing us out if we broke the law was unheard of. They actually sided with the law!

Our parents took responsibility for us. For our upbringing, our behaviour, our social education if you like. They took an interest, and didn't abdicate their responsibility to the teachers. And if you got told off, it was usually because you deserved it, and it wasn't a matter for an enquiry.

We had freedom, failure, success and responsibility, and we learned how to deal withit all. And if you are my age, or perhaps 15 years or so younger, you have survived. Congratulations!

Today our world is very different, and so are the pressures. I am neither that naive nor that stupid not to have noticed. I look at my own children - adults now themselves. I am hugely proud of my own kids, how they have turned out and their own attitudes to life, as I am sure many parents are of theirs - I understand them (I think!) and their values, to which I can relate. But I don't think they had as much natural fun as I had growing up. Even if I had my own disappointments.

But my question now is this: if we managed to successfully navigate a different way of life, and if our own children are the decent types of human being you wanted them to be, but we now bemoan and criticise what that world has become,where the hell did it all go wrong?

That's it!I've said my piece. I am typing this on my iPad on yet another flight, so that when I land I can "post" it on the Internet for people in a number of countries to read it immediately without waiting for the postman to arrive, and just scratch my head and smile at the memories - because let's face it, what else can you do?

Beauty Is In The Eye Of The (Western) Beholder!

Beauty, it seems, is not just skin deep. (Well we knew that, didn't we?). Beauty comes in many forms - but I fear somewhere, somehow, we really are losing the plot if we believe that only in the "west" do we understand what makes a person, in this case, beautiful and acceptable.

As Westerners we have been, in recent history, destroyers of economies, setting new benchmarks in greed, setting bad examples in consumption and failing to save our money - and now we want to interfere with what we believe is judged "beautiful". Give me a break!

You may not have heard of Lou Zilin, but if not you will soon. She is a mainland Chinese lady of 24, who has won China's beauty pageant and who will therefore represent her country in this year's Miss Universe pageant, but get this. Miss China is deemed to be too "Chinese", and has therefore been sent to that city of overwhelming taste and culture, New York, (I know, fingers down the throat!) to learn how to become more "western".

Stop it!

It is true that, to many westerners, certain Asian traits and mannerisms are "not polite". In our view, for example, there are better ways of expressing satisfaction with a meal than a loud burp, and we would not usually come straight out and ask how much you earn, but then who set us up as the custodians of polite behaviour?

And even that behaviour changes over time. For example, my generation (at least the males) would always walk on the outside of a lady - closest to the road. First because historically when roads were not made as they are today with drainage, there was a chance a lady's clothes would be splashed by passing traffic and the man was being protective both of the splashing but secondly also of the traffic itself. But even that changed from a time even further back in history when the man always walked on the inside of the lady, closest to the buildings, to protect her from being hit by objects, including chamberpots and their contents (night soil), chucked out of the windows above with no thought of what or who might be below.

I understand the point of view put forward in the particular case of China's representative for Miss Universe, that if she is at least made aware of the practices of the majority of contestants in the pageant she will not feel isolated, but I take exception to what seems to be the view that only what we do in the west is right and everyone else is therefore, by default, wrong.

I commented in April about Bertrand Russell's book, written in 1922 about China where he cautioned against China's civilisation being substituted by the American. It seems that he might not have been far wrong.

Banking On A Job?

The banks are making headline news again. And it's not positive news either.

If it's not the ongoing repercussions of the credit fallout, then it's taking the blame for the new recession - double dip or not - or the fact the banks are not lending enough to small businesses (traditionally high risk businesses), or not making enough money for their shareholders, or paying themselves too much money  ... the list goes on and on. Bank bashing, particularly by the media and the politicians has become a regular feature of our lives, and the banks just don't know how to deal with the bad PR.

And sharing the banking bad news this time around has been current job losses, although I think in some cases this has been conveniently misinterpreted in the media.

As regards the present, for example, the prospects for some bank employees is admittedly bleak - but media suggestions that a bank here or there is shedding anything from 10 - 30,000 jobs jobs often disguises the fact that the businesses are being sold - and in a lot of cases the new owners will retain many of the jobs. Therefore jobs are not actually being lost or done away with, and the reality is not as bleak as the headline. But as usual it is the headline that catches the eye.

But current changes aside, and providing further news headlines to come, what of the future job market in the commercial banks in particular? Certainly an  area of focus for me.

After the re-sizing of banks, driven by the market in response to shareholder demands for better results, profits and therefore dividends, and perhaps in part by the regulators -  whether at the behest of politicians or not - banks are once again looking more critically at the manner in which they deliver their services. And it is here, in the personal banking market, that I do see the bigger changes taking place. As a result, jobs will either be created in different areas of the bank or, worse, will not be created at all. Which will prolong the negative press.

The provision of basic banking services, offered through a network of staffed bank branches, is very likely to change over the coming decade and it is going to happen in two ways particularly. One is through the rise of these same services being offered through non-banks, and the second is through technology - a long promised  change- agent in banking.

In the case of non-banks, you can already see the changes taking place in some countries; some more quickly than others. It is a common feature of many larger stores in some countries to offer their customers "cash back". A phenomenon where when you buy your groceries, which come to say USD70, the store will ask if you want cash as well on your charge card? Say another $30, or perhaps more depending on limits. Saves the customer having to leave the store and go to a cash machine, or a branch of their bank, and helps the store reduce the level of idle cash it has lying around the premises. Simple for all. Or stores themselves running card programmes where you get rewarded for the amount of goods you buy in their store - or indeed in linked stores. Why would you want a bank card (and okay, so the banks are often silently behind the cards) - you don't need one. The non-banks, who will also offer insurance products and investment products and foreign currency services as they do already, will be able to deal with all your needs while you are out shopping - and remember too, they are often open for many more hours than the banks. 

So when was the last time you had to go into a bank branch?

And then there's technology.

Some time in the early 1970s before Giscard d'Estaing became President of France, and was Finance Minister, he warned of huge job losses in the banking industry as technology in banking took a hold. He was on the right track, but a little premature perhaps. Whilst technology from that time onwards certainly increased in usage, it actually enabled banks to do more - and offer more to their customers. As the world became wealthier and more people wanted to do banking, banks were able to accommodate their wishes. And with the repeal of Glass Steagall this became an even greater opportunity for the banks. So in its early days, technology actually benefitted the Banks and their customers. But not all customers! Many older customers were unhappy about using technology. Cash machines were alien to them and they didn't want to trust the fact that they could key in a number and money would come from a hole in the wall.

But fast forward to today, and we are very rapidly approaching global populations who are very comfortable with technology. People who remember pin numbers, who order on the internet, who do not need to go to a bank branch and interact with a human being. A generation that doesn't want to have land lines but are happy with only mobile phones - many more of which are being embedded with secure chips that will let you transact through your mobile - and pay for your newspaper, and your taxi and train.

So branch banks will become a thing of the past - with perhaps one main branch in a region that will have a pool of experts in mortgages and other loans, in asset management and other major bank services. Centres of excellence in other words, providing service. And yes, they will need to be manned by high-quality people - but the overall numbers needed are going to drop.

After all, what could be easier than picking up cash with your cabbage or insuring your car when you go for an ice cream - and getting a rebate for your next visit to the supermarket.

Banks should be thinking about it now! 

 

News, And Other Snooping Around ... At Any Cost?

One of my favourite phrases on the subject of integrity, particularly when confronted with those apparently "grey areas" common in Asia where, what constitutes Western morals and practice is merely seen as a "pay as you go" system, is "there is no right way to do the wrong thing!" Not sure where I stole it from in the first place, but I think a friend got it from a Toby Keith country song called "Ain't No Right Way".  

When I started to think about this piece, I also stumbled across another appropriate phrase - this time from a highly respected journalist (now yet another oxymoron) called Ed Murrow who said "We cannot make good news out of bad practice". Quite! Pity the Murdoch's didn't see that one!

I think enough has been said by just about everyone on the subject of the Murdoch family and all their associates, and this is one that is likely to run and run. Mind you, other tabloids might keep the pressure up, just to try and hope that no one looks too carefully at their own practices. I think there may be a few skeletons in a few cupboards. So, no more from me on that issue, but you know what? Around the time these particular bits of nasty news were hitting the fan, I had occasion to look into a related subject.

And I got an unpleasant surprise.

A friend had remarked that their young teenage son's mobile phone had been left at home one evening, and it was buzzing away merrily in his absence. Closer inspection revealed that the buzzing was related to a live ongoing exchange of messages between a couple of other children - without the intervention of their own son. Still with me? So, how was their son picking up the messages? Spyware? Or had he merely been involved in the earlier exchange and not logged off. In this particular case, I never discovered. Parents didn't want to reveal to their son that they had been snooping on his mobile, and the matter rests - unexplained.

But as my curiosity had been piqued, I went off to see how easy it would be for an amateur to spy on someone else; not a highly trained expert employed by the media.

I found the opening lines of an advertisement that read "Do you suspect your child or employee is abusing their SMS"? It goes on "If you're worried that your children or employees are using smartphones inappropriately, then ********** *** is just for you. SMS (text messaging) has become a popular way for people to communicate. Are your kids involved with texting dangers? What are they secretly texting about? Are they visiting porn sites on the phone? You have the right to know" (The asterisks cover the name of the company - they can do their own advertising!)

For a mere USD130 - say HK$1000, you can spy on your kids, your spouse, your domestic helper, your employees...

And from another company, a top of the range spy kit coming in at USD350 promises "...One of the real cool features of ********, is the ability to track the location of the target phone. Using this feature, you'll know the EXACT location of the cell phone in real time."

And if you are the target - you have no idea that it is there.

In George Orwell's book 1984, one of the features is the pervasive surveillance undertaken by the State. No place to hide, most of the time. So, it seems, although we have taken a little longer to get there, we are entering an era where if you want private information you do not any more have to employ the services of a slightly seedy looking private eye with an old raincoat, a battered camera, and an ability to hide round corners. You just bug the phone. At a fraction of the cost.

And if this is available to the public, Governments must have had it a long time ago. And it is a technology that is going to become less, not more, expensive.

So, before you pack your suitcase for that naughty little liaison somewhere you shouldn't be, just check your mobile phone! Big Brother - or someone even MORE formidable - might just be watching.

 

One For The Road

"Responsible Drinking? Now that's an Oxymoron" (Aaron Howard).

A conclusion, it would seem, arrived at recently by that wonderful college of serial nutcases, the Royal College of Psychiatrists who have determined that people who have successfully navigated life to the age of 65 are now miraculously incapable of deciding whether or not to have an alcoholic drink and need to be closely monitored.

Frankly, I have met only a few psychiatrists (well, qualified ones) in my life and as a result I have generally formed a rather "distrustful" opinion of them. One was absolutely an alcoholic and I did worry about his patients, and another was barking mad - at least away from his professional life, which was perhaps a release! Now, however, the Royal College has said Britain suffers from a generation of "Invisible Addicts" - (booze and drugs, it seems), and that once people hit 65 years of age they should be subject to routine alcohol and drug tests. 

Their recommendations suggest that men (and sorry ladies, you get less) should consume no more than one and half units of alcohol a day. Given that a standard large glass of wine is two units of alcohol, that means if enforced in Hong Kong the revenue of certain exclusive Clubs with a slightly older members profile would go downhill very rapidly!! I suspect too, that so would some of the members!

And I accused Hong Kong of being a "nanny state" when they assumed that people here were incapable of reading ingredients on food labels, and introduced a whole series of rules that has removed certain well known foods - sold freely in developed countries whose inhabitants can presumably read better than we can - from our shelves. But I digress.

But why am I so exercised about the UK pronouncement? I am not, after all, a large consumer of alcohol at the best of times and can equally happily take it or leave it. No - it is the "age" thing. As a man of a certain age, I have a particular interest in pronouncements that suggest I, (and others of my vintage), am incapable of making up my own mind. Of course, there are people less fortunate than us who probably do need looking after at an earlier age, but do we need to make "testing" a catch all?

I would be less vigorous in my defence of certain age-related issues if, for example, there was a suggestion that people at the age of 75 or over were required (as I believe they are in certain countries - even earlier), to pass a basic driving test on a regular basis - rather than merely certifying that they can still see objects 10 metres ahead (is that with, or without, one and a half units of alcohol?). But that sort of issue, to me, is more common sense.

But don't get me wrong. Of course there are reasons that lead people to drink more when they are bored and if retirement, for some, means sitting in a chair day in and day out in front of a television they might indeed resort to drink. And they might require to be watched - but then I assume the results of the regular testing would be advisory only and would not lead to a judge's "banning order" so that Mr Smith is "hereby sentenced to a court order banning him from the consumption of alcohol". What's the point?

That aside, it seems to me that there are some opportunities here. First of all, keep people active for longer as some countries are trying to do, by raising the retirement age. Encourage healthy exercise for the older generation. Yes, there are some communities that do that - but not all of them make it attractive. Can't it be done?

And perhaps there is a market for the development of drinks that are non-alcoholic and taste good to adults. Don't you think that advertisers glamourise alcohol? Nice bottles, good labeling, advertising, whereas soft drinks are often ordinary, with a boring lack of variety, either very sweet or diet (nothing much in between), aimed at a non-alcohol drinking age group, rather than a discerning older group? Have you tasted raw carrot juice? It doesn't even look nice. (Innocent Drinks excepted perhaps - if you like that sort of thing).

Investment proposals in a sealed brown envelope please!

Message for the Royal College of Psychiatrists? Not all 65 year old people are incapable (yet!) of making up their own mind, and as I head off for lunch with my non-drinking elderly Mother who actually gave up alcohol - one gin and tonic a day - of her own volition at the age of 88, I will enjoy a glass of wine (a large one - two units) - just out of spite!