Finance is a really odd section for me to have. I don’t come from a finance background, I have no interest in fin-tech. Yet it makes its appearance here on this blog.
When thinking about this category, I decided to reflect on why its here. It’s usually where curated content sits, rather than my own ideas.
The reality of life in the west is that everything has become financialised. As I write this as people think about web 3.0, they are thinking about payment systems first and working about utility later. This implies that the open web we know won’t be part of the metaverse in terms of ideas or ethos.
Instead of economic growth consumer spending depends on different ways of creating credit. Its no accident that delayed payments finance company Klarna is the biggest thing in European e-commerce at the time of writing this page.
Back when I started writing we were heading into the financial crisis of 2008, the knock on effects of that could still be felt a dozen years later and was a contributing factor to Brexit and Trump victories. The ‘occupy’ movement was catalysed by the financial crisis and then turned into something else. For instance it became a pro-democracy movement in Hong Kong.
We had the implosion of financial brands like Lehman Brothers and the Royal Bank of Scotland. This created a lack of trust in business, the media and the government. We are still seeing that play out today, from cryptocurrency to conspiracy theories and a lack of trust by the public in experts.
Vivienne Tam hosted a video fashion show for her clothes in Hong Kong. The key difference between this and other shows is that the Vivienne Tam show took place in the iconic Ngong Ping cable car across Lantau island.
Vivienne Tam has a range had the usual mix of western cut and Chinese design motifs.
Buzz Lightyear origin story
The original film Toy Story had the reality of Buzz Lightyear being a toy versus his own beliefs of him being a space hero coming into sharp contrast.
Move forwards 26 years and the character gets an origins story, making his fictional story more real. Disney continues to raid its catalogue. The story has references to both the Star Wars and Marvel universes as well as Pixar’s usual humour and easter eggs. A lot of this is down to the fact that the geeks conquered and creatively own Hollywood now. In fact the film is as much about this subtext, where reality and fantasy have been subverted as it is about Toy Story.
Chris Evans (who played Captain America) has replaced comedian Tim Allen as the voice of Buzz Lightyear, which gives an idea of the change in tone.
Jho Low
Vice Media interview the Wall Street Journal journalists who wrote some of the major stories breaking 1MDB and the financier who managed it Jho Low. In a weirdly parallel aspect to the story Low used 1MDB money to help finance The Wolf of Wall Street movie. Low is reputed to be hiding out in China’s greater bay area, moving between Shenzhen, Macau and Hong Kong. If this is true, then he is likely to be under the protection of powerful officials in China.
Low’s back story in Penang is fascinating and proves that it is easier to pull a large con than a small one.
Cyberpunk design cues
Casio’s new premium G-Shock GMW-B5000TVA-1 Titanium “Virtual Warriors” has definite cyberpunk design vibes. Even though it is a premium watch, it is also at odds with Casio’s more connected G-Shock models.
Spanx commits to all-female board after Blackstone investment — Quartz – More than a quarter of board seats in the Russell 3000 Index belonged to women during the last quarter, compared to 15.1% just five years ago, according the corporate leadership research firm Equilar. Still, just 84 of these boards had achieved gender parity, meaning that they were represented by 50% women. And companies still struggle to achieve adequate racial and LGBTQ representation on their boards as well. Justine Smyth, chair of the New Zealand telecommunications company Spark, has suggested that while the first “diverse” appointees on company boards may feel like tokenism, those members can help advocate for change once they are given decision-making power – Spanx is an American underwear company that does foundation garments to make the wearer appear thinner. Spanx innovated around testing with real people, having multiple sizes and packaging colours that increased brand salience. The back story of Spanx is similar to the ‘founder in a garage’ story that was the starting point of many Silicon Valley firms. Spanx is a private company. It is interesting that Spanx are taking private equity money from Blackstone rather than going public. Will we get to a situation in the future where all-women boards like Spanx come under the kind of pressure that all-men boards come under now? If we got to that stage, then we’d have equality. I think that will be a while.
Microsoft Executives Told Bill Gates to Stop Emailing a Female Staffer Years Ago – WSJ – interesting that we haven’t seen this kind of expose about Larry Ellison or Steve Jobs. Secondly, there is the timing with Mr Gates’ divorce. Finally, all of the money and hard work to reinvent Mr Gates as a philanthropist looks as if its becoming undone. While Mr Gates
The soft bigotry of America’s cultural left | Financial Times – imposing conformity through intimidation is not what is supposed to happen in democracies, still less on their most-prized campuses. Crushing free thought is McCarthyism. This new consensus is profoundly illiberal. It treats a person’s race as their primary fixed identity and assigns roles on that basis. This obliterates the individual moral autonomy on which liberalism rests. Since everything in society boils down to race, everything must change. California, for example, is trying to alter its mathematics curriculum to downplay the idea there are right and wrong answers in the science. The debate is fuelled by a proposal for new math standards called “A Pathway to Equitable Math Instruction”. The framework states that “objectivity”, “worship of the written word”, and “either/or thinking” are tools of white supremacy
Reforms in Hong Kong Encourage Homecoming of Offshore Funds | Winston & Strawn LLP – In July 2021, the Hong Kong government gazetted a fund re‑domiciliation mechanism to encourage offshore funds set up in corporate or limited-partnership form to register in Hong Kong as OFCs and LPFs, respectively. This mechanism does not create any new legal entity; therefore, it does not require the dissolution of the original funds or require investors to exchange their interests from the old fund to the new fund. Upon re‑domiciliation, these funds would be de‑registered in the original place of incorporation and would have the same rights and obligations as any other newly established OFCs and LPFs in Hong Kong. The Wealth Connect, which formally commenced trading on September 10, 2021, allows Hong Kong-domiciled funds to be offered to mainland Chinese investors in the Guangdong-Hong Kong-Macao Greater Bay Area. This adds to the Mutual Recognition of Funds scheme, which started in 2015, allowing Hong Kong-domiciled funds to be distributed in mainland China. These connect schemes serve as another incentive to encourage fund managers to re‑domicile offshore funds to Hong Kong – I suspect that this is designed to do a few things over time.
Allows Chinese citizens on the mainland access to more ways to do investments, whilst still being in full view of the Chinese government.
It allows the Chinese government to expand ‘capture’ of western financial institutions
It will allow China to put pressure on VIEs ran out of the likes of the British Virgin Island and similar territories out of scrutiny
How Hong Kong’s Elite Turned on Democracy – The Atlantic – there is something performative about the face and patriotism on display that I suspect may be driven less by a drive to get on and more by the fear of what might happen to them or their loved ones if they didn’t
Apple’s privacy changes create windfall for its own advertising business | Financial Times – “Apple was unable to validate for us that Apple’s solutions are compliant with Apple’s policy,” he said. “Despite multiple requests and trying to get them to confirm that their products are compliant with their own solutions, we were unable to get there.” Apple said its privacy features were designed to protect users. “The technologies are part of one comprehensive system designed to help developers implement safe advertising practices and protect users — not to advantage Apple.” – this has my spidey sense tingling right now
What blockbuster? China spurns Hollywood’s advances | Financial Times – “If I was an investor, I would be very concerned about a strategy at this point that depended on access to the Chinese market and the good graces of Chinese film regulators,” said Aynne Kokas, the author of Hollywood Made in China and a media studies professor at the University of Virginia. “To make very expensive films in anticipation of being able to deliver them to the Chinese market and then not being certain that’s possible is actually a much more financially irresponsible strategy from my perspective.”
Alibaba Faces New Threat: an Evolving Chinese Shopper – WSJ – consumers have started to embrace new ways of shopping that favor browsing and interaction over targeted product searches. That trend has left Alibaba playing catch-up in some areas, and competitors have used the shift to gain a foothold in the world’s largest online retail market. Alibaba remains the leading platform in online shopping, but its share of China’s retail e-commerce market has fallen to a projected 51% in 2021 from 78% in 2015, according to research firm eMarketer. Interesting that WeChat, BilliBilli, Pinduoduo and Douyin are claiming part of the e-commerce pie. What this article doesn’t cover is the relative importance by comparison of O2O (offline to online) (paywall)
North America Is Biggest Ransomware Target, Chainalysis Says – Bloomberg – This quote in the article about ransomware stood out to me: “The number of bad actors responsible for these widespread attacks is surprisingly small,” the report said. By taking action against the biggest players in groups such as infrastructure providers and money launderers, it said, “law enforcement can have an outsized impact and disrupt the operations of multiple strains.” – If ransomware was treated as war by other means that it actually is, rather than thinking of it as a law enforcement problem, things might get better. It would require the west to target ransomware payment rat runs and take out its key ransomeware players through covert means
Elite Capture of Foreign Aid Evidence from Offshore Bank Accounts Jørgen Juel Andersen Niels Johannesen Bob Rijkers – disbursements to highly aid-dependent countries coincide with sharp increases in bank deposits in offshore financial centers known for bank secrecy and private wealth man- agement, but not in other financial centers. The estimates are not confounded by contemporaneous shocks such as civil conflicts, natural disasters, and financial crises, and are robust to instrumenting with predetermined aid commitments. The implied leakage rate is around 7.5 percent at the sample mean and tends to increase with the ratio of aid to GDP. The findings are consistent with aid capture in the most aid-dependent countries.
Among the Taliban: a soldier-turned-writer’s journey through Afghanistan | Financial Times – I’ve benefited from the west. I had to fight, though; it has not been easy, but I hate being a victim. People kicked my head in. I kicked theirs in back. Things improved after I left my hometown of little opportunity in 1997. The Pakistani boys left back there are told to pull their socks up, get called Pakis, are accused of turning England into an Islamic state, forced into marriages, have fingers pointed at them by politicians when it’s convenient, and today they’re being told to change from being undereducated town-dwellers to remote coders for international tech companies. Yeah, right. A plane ticket to a war zone is much easier – great essay in the Financial Times
Vietnam’s factories lurch into crisis from worker exodus with holiday shopping on the line | South China Morning Post – thousands of workers – originally from the poorer parts of the country – who are leaving for their hometowns, an exodus that has left business owners in a state of panic over labour losses. Of the 3.5 million migrant workers employed in Ho Chi Minh City and its neighbouring provinces, 2.1 million want to return home, according to state media reports – explains Nike’s problems indicates that its systemic rather than brand or sector based in nature
The panellists look back to Tom Ford, in particular his notorious, provocative advertising campaigns during his tenure as creative director of Gucci, while wondering whether his present day collections have the same impact. The glamour of the Tom Ford tenures at YSL and Gucci including the old collections is also dissected. The analysis of the Tom Ford legacy is timely as Gucci has looked to relaunch some of his old signature pieces.
The debate doesn’t touch on Tom Ford and his impact on culture beyond luxury such film making. The outtake for me is that Tom Ford may have a longer and more relevant career than Karl Lagerfeld.
Macau casino stocks shed $16bn as government seeks greater oversight | Financial Times – the Chinese territory opened a 45-day public consultation on revising its gaming law, which is expected to step up scrutiny of operators in the world’s biggest gambling hub. Casino groups’ 20-year concessions to operate in Macau are set to expire next year. The authorities’ move to tighten control of casinos is also proceeding as Beijing embarks on a broad campaign to reshape the country’s business, political and cultural landscape in a bid to stamp out inequality and promote “cultural prosperity”. Chinese regulators have imposed stringent conditions on the country’s biggest companies in the tech, online education and video gaming sectors, and authorities have targeted social behaviours perceived as harmful
A decade of the Tim Cook machine — Benedict Evans – it will carry on making a certain kind of product for a certain kind of customer. That’s been the plan ever since the original Macintosh, and in some ways all that’s changed is how many more of those customers there are. The original Mac sold a few hundred thousand units in 1984, but Apple now sells half a million iPhones every day. Apple and the market grew into each other
In Depth: How Evergrande Hid Its Debt – Caixin Global – A source familiar with the capital market in Hong Kong said that Evergrande had raised a lot of money overseas at interest rates higher than 15%, which one source found to be perplexingly high. “How could Evergrande make a profit borrowing at such high interest rates?” the source asked. – I don’t think Lehman Brothers is the right analogue, but maybe Enron or MCI Worldcom are?
Kids who grew up with search engines could change STEM education forever – The Verge – It’s possible that the analogy multiple professors pointed to — filing cabinets — is no longer useful since many students Drossman’s age spent their high school years storing documents in the likes of OneDrive and Dropbox rather than in physical spaces. It could also have to do with the other software they’re accustomed to — dominant smartphone apps like Instagram, TikTok, Facebook, and YouTube all involve pulling content from a vast online sea rather than locating it within a nested hierarchy. “When I want to scroll over to Snapchat, Twitter, they’re not in any particular order, but I know exactly where they are,” says Vogel, who is a devoted iPhone user. Some of it boils down to muscle memory. But it may also be that in an age where every conceivable user interface includes a search function, young people have never needed folders or directories for the tasks they do. The first internet search engines were used around 1990, but features like Windows Search and Spotlight on macOS are both products of the early 2000s. Most of 2017’s college freshmen were born in the very late ‘90s. They were in elementary school when the iPhone debuted; they’re around the same age as Google. While many of today’s professors grew up without search functions on their phones and computers, today’s students increasingly don’t remember a world without them
Germans Demanding New China Policy. Will the Next Chancellor Deliver? | National Review – no matter who wins, German public opinion, pressure from the United States, and the strong possibility of having to partner with the Green Party in a coalition government make it likely the victor will be pushed in a more hawkish direction. The same hardening found among the German public is also happening in Parliament and the foreign ministry. Conservatives in the United States rightfully lament how bureaucracies often influence policy outcomes against the wishes of the principals leading them, not the other way around. When it comes to the future of Germany’s China policy, those bureaucratic exertions might not be such a bad thing
Most Germans believe their ‘golden age’ is over, poll finds – “These findings suggest that, while Angela Merkel has cemented Germany’s position as a great European power, the cornerstones of her legacy – neutrality and consensus building – will not be enough to defend the unity of the EU, and its place in the world, in the years to come.” Germans will head to the polls on September 26 to elect a new parliament and choose a successor to Mrs Merkel, who has served as chancellor since 2005. Her own party, the Christian Democratic Union, is lagging its coalition partner, the centre-left Social Democrat Party, in polls. Mrs Merkel’s SPD finance minister, Olaf Scholz, is likely to become the next chancellor.
Foreign Office ‘warned UK-based Hong Kong critics about extradition risk abroad’ | Hong Kong | The Guardian – Hong Kong government figures list 19 extradition agreements with other nations including India, Indonesia, Malaysia, Singapore, South Africa and Portugal. In response to the law, several countries including the UK, Australia, Germany, France and the US, tore up their Hong Kong agreements. Chinese authorities record at least 59 extradition agreements, including with countries across Asia and Europe, although not all are ratified. Several countries including France and Australia have indicated they will not ratify their agreements
How China’s ‘996’ culture is changing | Advertising | Campaign Asia – brands should be “non-judgmental and show empathy and kindness towards the young generations.” By doing so, they can keep momentum going even after “lying flat” no longer trends. “If brands can even help young people to achieve their personal goals, that would help build the loyalty of the younger consumers in the long term,” she advised. brands should be “non-judgmental and show empathy and kindness towards the young generations.” By doing so, they can keep momentum going even after “lying flat” no longer trends. “If brands can even help young people to achieve their personal goals, that would help build the loyalty of the younger consumers in the long term,” she advised.
Lithuania says throw away Chinese phones due to censorship concerns | Reuters – The National Cyber Centre’s report also said the Xiaomi phone was sending encrypted phone usage data to a server in Singapore. A security flaw was also found in the P40 5G phone by China’s Huawei (HWT.UL) but none was found in the phone of another Chinese maker, OnePlus, it said. – given the closeness of Russia and China, at least some of the concern will about their mutual help of each other in the cybersecurity realm
Report: Fake chips flood in to exploit supply shortage – Oki Engineering has opened a chip verification service. And after opening the service in June, Oki had received 150 inquiries by August. After studying about 70 cases it found problematic chips in about 30 percent of them. With constrained supplies customers are prepared to buy from “unconventional sources,” the report said. Industrial and medical equipment manufacturers are amongst those to have subscribed to Oki’s chip verification service
CSIS has a great talk that looks at the resilience of Chinese institutions. The CSIS is a US think tank better known as the Center for Strategic & International Studies. They held a talking on Rethinking Chinese Politics – in terms of having a better understanding of the dynamics and the resilience of the Chinese institutions involved. The recentralisation of power under Xi Jingping was seen to subvert Chinese institutions, but Jiang Zemin’s actions had a similar role in previous years.
Interesting discussion on the resilience of Chinese institutions
Consumer behaviour
China’s Generation N: the young nationalists who have Beijing’s back | South China Morning Post – Nationalism has been on the rise, encouraged by the Communist Party and put to effective use by President Xi Jinping. Younger generations’ perceptions and expectations of their country differ from those of the past, offering the government support but also challenges – basically China might get screwed over by its own rhetoric and propaganda to its people. However it poses problems for western businesses that rely on the Chinese market
State Media Calls on Hong Kong to Compensate For Tide of Emigration — Radio Free Asia – “There is a high proportion of professionals — 12 percent — among those emigrating,” the article said. “The Hong Kong government should pay close attention to the increase in the number of professionals emigrating, and set out a long-term response strategy,” it said. The article appeared particularly concerned over the loss of medical professionals from Hong Kong, suggesting the government focus on recruiting healthcare workers from mainland China and overseas. The exodus looks set to hit the healthcare sector hard, with the Hospital Authority (HA) reporting the loss of 4.6 percent of doctors and 6.5 percent of nurses in public hospitals – there is a similar impact in third level teaching as well
Chinese media back diatribe calling for crackdown to be expanded | Financial Times – “The capital market will no longer become a paradise for capitalists to get rich overnight . . . the cultural market will no longer be a paradise for sissy stars and news and public opinion will no longer be in a position worshipping western culture,” – pretty much on point for Chinese state belief. There has been concerns that K-pop idol culture with its androgynous dressing stars would be ruining Chinese macho culture. This also fits into the dialogue about left behind women considered responsible for the decline in birth rate
SenseTime heads for IPO on Hong Kong exchange | Financial Times – SenseTime said it was subject to “complex and evolving” laws around data protection, including new draft regulations for cyber security reviews in China. “We cannot predict the impact of the draft measures, if any, at this stage,”
ARM China Seizes IP, Relaunches as an ‘Independent’ Company – ExtremeTech – It is not clear how much pressure was put on SoftBank to form the merger, but this looks like one of the most blatant examples of IP theft that we’ve seen. The Chinese arm of a company has gone rogue and refused to obey the ruling of its own board. The head of that company is essentially treating it as a personal fiefdom, and Chinese authorities do not appear to have taken meaningful action to reign in Mr. Wu. While ARM China does not currently have access to the ARMv9 instruction set or any additional ARM IP, it appears that the company will attempt to use previously transferred assets to bootstrap its own transformation into an “independent” company – yes, sounds about right. China waging war by other means, also splitting fits into China’s desire to self-reliant
Apple CEO Tim Cook Expected To Retire After Completing One Last Product Category / Digital Information World – Tim Cook noted that, when asked, he would probably not be around for Apple in approximately the next ten years. And just like that, one of the most influential men in the world steps down, leaving an unpredictable future in his stead. However, 10 years is a long time, and Tim Cook seems to have an idea as far as establishing a legacy goes. – the hubris of John Sculley and the Newton comes to mind….