Bankers As Friends, Not Fodder

Show me love, take me home to meet your ma ma.

Okay, this is the posting that probably gets me hung up by my thumbs and flayed alive. This efinancialcareers.com article asserts that the only region in the world where bankers are still held in high esteem is in Asia, particularly Hong Kong, China and Singapore. The reasons given are as follows:

 1) A no-fault financial crisis – this time around, the local banks didn’t cause problems, and the local governments didn’t bail any of them out

    2) Bash someone else instead – there are plenty of other villains, namely real estate developers, milk product manufacturers, chemical plant operators etc.

    3) Bankers are heroes – they work hard, are well educated, well dressed, provide loans to people and make a good living.

    4) Bankers behave well at play… – they are not the party animals and are not as ostentatious as their Western counterparts

    5) …and at work – ditto

    6) Just another rich guy – see 2) above

    7) Bankers deserve it – see 3) through 5) above

    8) Greed is good – making money, and lots of it, is still a prime objective for much of East Asia’s population.

    9) A meeker media – The local media is not as free as in the West, and, with a few exceptions, is less focused on reporting on personalities.

My commentary on each of the above stated rationale:

    1) I generally agree, although those with memory back to the Asian financial crisis of 1997 and the Korean credit card crisis of 2003 may beg to differ. Still, banks back then were seen as weak, not evil.

    2) I agree. A variety of scum and short-sighted profiteers abound in Asia.

    3) I partially agree. Banks in Asia have done a great deal of good in the past two decades providing growth capital to businesses and individuals. However, there have also been hundreds of billions of dollars of investment products placed with the public over the past several years. If the market turns seriously sour and investors start losing heaps of money, the pitchforks are bound to come out in large numbers, as they did during Hong Kong’s Lehman Brothers Minibond crisis following 2008. Also, bankers who own portfolios of distressed assets are never known to be angels of mercy and charity.

    4) Huh? I think that the penchant for showy wealth is as prevalent in Asia as anywhere else.

    5) Ditto.

    6) I general agree. There is plenty of nouveau riche money that has been made through real estate, stock market investments, and business ownership. Much of that wealth is conspicuously displayed. Bankers are hardly alone in flaunting it.

    7) This is a tough call. Banker pay is a controversial topic globally, and Asia is no exception. Bankers are paid not simply according to the long hours that they put in and their intellectual horsepower, but to what profit numbers they can successfully put beside their name, as well as to the age-old principles of supply and demand. Simply speaking fluent Mandarin has never commanded the pay premium that it has over the past 10-15 years.

    8) I general agree, but with a heavy sigh. Money is still a powerful measure of success in Asia. I am reminded of a recent story whereby a man attended a presentation in China by private equity firm KKR. He brought his pre-teen son along and declared to the lad, “pay attention, this is the profession I want you to be in when you grow up.”

    9) This is only partially true, on a case by case basis. This is generally true in countries such as China and Singapore, as well as smaller countries where the media is heavily influenced by tycoons. However, in other countries such as Hong Kong, Korea and Taiwan, the local press can be as nasty as anywhere.

In short, I would agree that Asian banks are run more conservatively, more highly regulated and are less sophisticated than the large global investment banks. However, one cannot ignore that the relatively favorable economic climate in East Asia has muted the general public disgruntlement towards “fat cat” bankers. That charitable view may change in a heartbeat in the next crisis. I will be watching with keen interest to see how public sentiment turns going forward. That’s assuming that I’m not hanging from a rope soon after this article is posted.

Versace Hotel in Macau – Piling on the Glitz

Trading up to classy from clutzy

As reported in this Washington Post article, Versace and Macau’s SJM (founded by Stanley Ho) have agreed to build a Versace branded luxury hotel on the Cotai Strip. It will have 2,000 rooms and 700 gambling tables. For SJM it’s a much-needed touch of class. For Versace, it may the only place in the world where its designs will look positively subdued.

Bo and his Wife - Irreconcilable Differences

Child of a Lesser God

The global media has lit up with the announcement of Bo Xilai’s trial on Thursday, August 22. By all accounts, it will be a quick, pre-ordained proceeding, with the charges already set to fit the amount of filth that the Chinese government is willing to launder in public. Bo himself has been part of the damage control maneuverings, since there is an element of MADness, or “mutually assured destruction”, between him and other Chinese political leaders.

 

This Wall Street Journal article offers an interesting twist to the story – that his already convicted wife (she of the poisoned chalice that killed Neil Heywood) may be a key witness against him. Angered, Bo has threatened to divorce her. However, she likely has more powerful motivations than keeping up the charade of a once blissful matrimonial union with Bo. Like any good mother, she may be cooperating in order to ensure protection for her (and Bo’s) son, who is studying law at Columbia University in the fall. There is the old supposition that the rich are different from the rest of society. If this trial proves anything, it may be that this rule holds true amongst the elite in China. It’s just a shame that this spectacle, which would be fodder for juicy tabloid drama in an open society, will probably play out like a rock concert heard through ear muffs.

Banking’s Blood Relationships

Family album as resume.

As reported in this New York times article, JP Morgan is being investigated by the US SEC’s anti-bribery laws in relation to its practice of hiring the offspring of senior Chinese government officials into their Hong Kong office in order to improve their ties to Chinese clients and win business. Focus in the article and investigation relate to the daughter of an official of the China Railway Group and the son of the chairman of the China Everbright Group. JP Morgan has garnered a good share of lucrative business from these entities over the past several years.

 

It’s interesting that the investigation is coming to light now, even though the practice of hiring “princelings” and other relatives of powerful political and business leaders in China and other countries is a well-trodden path to winning deals. Almost every major bank over the past decade has augmented the ranks of their professionals with the well-connected. Furthermore, it remains to be seen whether the US government can prove that such hiring practices violates bribery and corruption acts. A key legal question is how “qualified” the hired person is to perform the task for which (s)he is being remunerated, and whether it is reasonable to think that a person with a particular professional background is capable of winning big deals other than through unethical or illegal means.

 

In any event, similar with the Bo Xilai case, there could be some interesting investigations and media reporting yet to come. This topic is also a key theme in this reporter’s forthcoming second novel, a prequel to Nothing Gained. Stay tuned...

Slowing Growth of “Chillionaires”

Moving out of the fast lane.

Here is a link to a just-released Jing Daily report on Chinese millionaires in 2012. It contains interesting graphs and statistics. Some notable takeaways are as follows:

• The number of new Chinese millionaires grew by only 3% in 2012, the slowest pace in five years.
• There are now over one million “Chillionaires” on the mainland.
• The three cities with the highest number of millionaires are Beijing, Guangdong, then Shanghai.
• The number of super-rich (net worth over $16 million) grew by only 2%. These individuals are mainly concentrated in Beijing.
• Wealth growth happened more quickly in some second tier cities. Tianjin had 11% growth, while Henan had 8%.
• Half of the millionaires made their money through their own businesses. 15% each were from real estate and stock market investing. The remaining 20% were from high-salaried professionals, including bankers. Bravo for entrepreneurialism!

A Dog’s Life in China as a Lion, or Panda, or ...

Just don’t feed me bamboo.

As reported in this Daily Mail article, it’s odd and tragic that a zoo in China’s Henan province has been caught defrauding its visitors by trying to pass off a dog (a Tibetan mastiff) as an African lion. When did visitors start getting suspicious? Was it as soon as they realized that the creature looked nothing like a real lion? No. When it started barking! The zoo has also been caught having common mongrels stand in for wolves and leopards, and sea cucumbers sloth in for snakes. Okay, in China, math 10, zoology 0.

 

China’s one percent have also been known to keep species-bending dogs as pets. As shown in some amazing picture in this Daily Beast article, they dress up their dogs as pandas, lions, Ninja turtles or tie-dyed hippies. Presumably, dogs, even the expensive breeds, as status symbols has grown rather banal for those humans looking for that extra edge of originality in their social status.

 

Is this animal abuse? It’s unclear, so long as bones and flesh are not being cut or broken or silicone implants embedded in the creatures. We don’t know how a dog’s self-esteem might be affected by such an extreme make over. Humans would no doubt be deeply distraught if presented as a species they are not. Unless it’s by choice, that is. Just ask any of your banker friends – the London Whale or the 800-pound gorilla.

Holy Monkster

Asceticism? No, krap!

Holy men sometimes do the most unholy things. Bad examples abound: there is the money-grubbing American televangelist, the pedophilic Catholic priest and the intolerant war-mongering Muslim cleric. Thailand’s version is Luang Pu Neckham, a buddhist monk who has scammed poor and rich donors alike to amass a small fortune and lead a decidedly un-ascetic life. Private jets, Louis Vuitton leather goods, gold-tinted sunglasses, eighty three automobiles and ownership of multiple properties are part of the trappings that have been associated with this holy man, who claims to be the reincarnation of a respected monk from decades earlier. Even more sadly, the muck has not just been limited to a distasteful penchant for materialism. He has been accused of raping a minor. To escape prosecution from Thai authorities, he has run off to foreign lands, most probably the US. As one might expect, at least US$10 million in various bank accounts under the monk’s name has gone missing.

 

If he retains any belief in the concept of Buddhist reincarnation, he should pray to be reborn as a dog. It would certainly be an improvement over his standing in this life.

 

CNN article on the Monkster