The FX industry leaders that you will love, why the 737-8MAX controversy is a business advantage for FX, Israel’s middle finger vulgarity yet another reason retail FX needs to move to proper regions, and I prepare to attempt a world record
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: The elite of the elite!
Less than two months now remains between today and the first FX Industry Thought Leadership Conference which will take place at The Ned in London, matching the very highest level of FX professionals with high quality brokerages, hedge funds, portfolio managers and institutional trading entities.
Given the response this week that created a massive stir after my pictorial suggestion on LinkedIn that the entire retail FX sector needs a revolution from the ground up, it is a timely juncture at which to introduce you, the highest level of FX industry professionals, to a far more sustainable and quite frankly, deservedly higher quality audience to which to present services such as technology, prime brokerage and market integration.
The overwhelming reaction to FinanceFeeds pioneering effort in instrumentally moving firms away from the affiliate marketing-based zero-sum non-entities on the islands and toward higher quality established regions is telling to say the least, and with this in mind, I personally look forward to hosting our conference in London on May 7.
This Monday, the full and final list of panel participants was fully completed.
In keeping with the thought leadership that should lead our industry forward, they are:
Struan Lloyd, CEO APAC, CME Group Global Repository Services
Bradley Rotter, CEO of The Entanglement Institute and the creator of the world’s largest Quantum computer for the US Dept of Defence, as well as being founder of the Metcalfe Society.
Dr Richard Smith, Founder and CEO of TradeSmith and the Creator of TradeStops.com Risk Management System. He is a visionary in terms of how the retail FX business needs to evolve
Nathaniel Hansen M.A, Director of Research, The Socializers
Speaking this Monday whilst in Stockholm to Dr Richard Smith, his dialog and ethos reinforces our theory.
Dr Smith explained that his covert passion is to integrate insights from behavioral finance and economics into technology in ways that nobody knows they’re there. He considers speculative trading to be a behavioral problem in that everyone is focusing on technology that delivers many facets, however his ethos is that we need to engage more people in the capital markets. “There are too few capital markets and the retail public is being dis-served. As a result the capital markets are imperiled by the lack of true engagement. This problem should be the basis for the new technologies that power FX” said Dr Smith.
Moving away from generic, off the shelf island-based retail legacy brokerages and platforms and into a new empowered world is the only way forward and will be a cornerstone of this conference and I personally look forward to assisting this upward transition for the retail FX world, and fomenting a far better client base at CEO level for the good quality institutional partners, many of whose leaders are long term friends and colleagues of mine whose business success I personally want to be a part of.
You all deserve better than marketing high quality execution, prime brokerage and technology services that are quite frankly better than the banks and exchanges, to monosyllabic lead churners on the islands.
The conference will be covered in depth by Dow Jones, The Wall Street Journal and Bloomberg and features C-level executives only. Feel free to email me at email@example.com should you wish to participate, we are already in receipt of over 120 confirmed senior executive attendances. See you at The Ned!
Tuesday & Wednesday: 27 hours to do a 4 hour journey. 737-8MAX heads back to base
The electronic trading business is a forward thinking, futuristic industry which paves the way in founding the entire financial ecosystem of the future, and that is a very good thing considering air travel’s fragile current situation.
As developers and committed professionals in the FX industry, you can take more than a degree of heart in the notion that you are building an online financial system which will connect every trading venue, tier 1 bank and asset class together and to commercial and retail clients, negating the need to do quite as much traveling as was once absolutely necessary.
Travel in order to maintain close business relationships with industry leaders and to gain vitally important research is a vital investment when making an effort to accrue sufficient resources to perform one’s research and commercial decisions correctly, however I have noticed a very problematic trend in air travel that may well perpetuate, that being the obsolescence of the current business model operated by airlines and aircraft manufacturers.
What has that got to do with electronic trading? Quite a lot. This is a global business and whilst its product and execution are delivered online right through from marketing and customer service to configuring a matching engine and aggregated price feed, the business-to-business relationships which matter and are at the highest level are conducted face to face.
I am sure that most of us do well over 100,000 miles per year in the air. I did 450,000 in 2018.
Cheap short to medium distance flights, often using a Boeing 737 or Airbus A319/320 have been instrumental in replacing the train, ferry and long road trip, shrinking the distances between offices, conferences and hotels.
The problem is that whilst this model was a result of extreme competition from well-run new enterprises such as easyJet, it is now so fiercely crowded that there is literally no money left, either within the airlines or the manufacturers.
This month alone, I have been logistically challenged by a bankrupt airline stranding me on Britain’s West Coast a day before travel to Australia, a ticket and boarding pass being provided only to be reneged on by the airline once having driven over 115 miles to another airport, and now a 27 hour challenge following what should have been a four hour direct flight.
The cause of this was the extremely unfortunate and thankfully rare accident involving a Boeing 737-8MAX in Ethiopia, which exited the sky just six minutes after take off, its anti-stall system being relied upon far too greatly by its staff, and manual override functionality having not operated to correct wing attitude.
As a result, all Boeing 737-8MAX aircraft were removed from service, and will likely remain out of service for at least three weeks whilst Boeing conducts research into the safety of the anti-stall system which is unique in the 737 range to the 8MAX model, which is of course laudible, however in my case, the airline’s handling of this was lamentable.
I boarded the Norwegian Airlines flight from Stockholm, which should have taken 4 hours. The flight took off, and two and a half hours into the journey, the aircraft was turned round and returned to Stockholm meaning a 6 hour journey to nowhere, and a wasted day for everyone on board, which subsequently descended into chaos as medium range flights on other aircraft had become in scarce supply due to the now stranded passengers all over the world.
Quite why the aircraft took off in the first place is a mystery, and answers were never proffered, however it was clear that this happened to many flights globally that day.
The interesting thing here is that there was no replacement aircraft, and all future flights were canceled, the website of most airlines operating 737-8MAX jammed solid, chatbots being inundated and customer service centers placing stranded customers on eternal hold.
I managed to get three flights which got me home, however I was lucky and being Sweden, the ground handling agent paid for the tickets and a hotel – I am sure that did not happen in many less civilized countries because force majeur is not covered by insurance, nor is any provider of services obliged to compensate or offer free services to clients under such circumstances, especially bearing in mind that this was done on the grounds of passenger safety.
What can be deduced is that airlines, even good ones, have so little cash flow that they are not able to afford to lease a different aircraft from another provider for a day in order to transfer passengers, hence the cancellations all over the world.
Factories are closing – for example the Airbus wing factory in North Wales which has been instrumental in the design and production of wings for the A320 and 380 for the last 25 years is on its last legs, no further bailouts are going to be given to the sinking ship which has been a government ball-and-chain, only funded to avoid mass unemployment in one of Britain’s most deprived areas and to protect the proud aviation engineering industry of Liverpool and the North West.
But viability is viability, and there is only so many times a state entity can throw taxpayers money a bottomless pit. A bottomless pit that is stuck with lack of funds from airlines which lease their product due to having to sell tickets for next to nothing. A one way train ticket from Bristol to London is more expensive than a return ticket for a flight from London to Frankfurt, and in some cases, London to Monaco!
Hence, the lack of replacement service was a telling reminder that airlines have no resources. Norwegian Airlines, a fantastic company with excellent planes, may well end its commercial life this year. Boeing Corporation, a magnificent company that gave us the 747, the world’s first – and in my opinion best – long distance passenger airliner, may well face so many lawsuits as a result of this accident and admission by proxy that the 737-8MAX’s anti-stall system needs testing for several weeks even after it has carried several passengers may well see the end of the road for a company which is already operating on tighter than ever margins.
The only way for the airline industry is to continue development of 800 passenger hybrid (kerosene/electric) or electric jet engines – all of which exist and are highly efficient. This would mean far more ticket sales as each aircraft would be able to carry four times the number of passengers compared to a current model, far less fuel usage, and less landing and airport fees as less individual aircraft would be needed, and the ticket cost would remain similar to that of today.
Sustainability, therefore, is in that type of R&D, and not in creating supersonic transports such as Concorde, as the Jet Age remains in the 1960s.
The barrier to this becoming a reality is the lack of range afforded by batteries. Currently, whilst electric cars are excellent, the range is still very low. It is still not possible to drive an electric car from Manchester to London and back, whereas it is easily possible to drive a 25 year old gasoline-powered internal combustion engined car from Manchester to London and back on one tank of fuel.
Thus, trans Atlantic, or even short flights with electrically operated jet aircraft are a long way into the future, and are totally dependent on the development cycle of batteries that can store and regenerate energy at a far better rate than today and are less heavy. A generator-equipped airliner with 6 electric engines could be feasible today, but it would be so heavy that it would be an aerodynamic nightmare, and taking off and landing would be massively challenging.
I see opportunity here. In the time that it takes to develop the new means of aircraft that gets rid of the unsustainable current model, our industry has the massive potential to thrive as executives will not be able to travel to and from overseas banks as easily as has been the case until now, and will be less willing to accept cancelations, price increases, airline bankruptcies or perceived increases in danger in what has until now been the safest method of travel.
Localization in London and New York is of course one thing that is beneficial, however connecting the professionals and industry executives of the world to a financial system in those centers as holistically as possible is now a massive presentation of opportunity.
Thursday: Bent from the ground up, and from top to bottom
I have made several points over the years since the retail FX business began to operate in less reputable regions of the Mediterranean, facilitated by off the shelf, dealing-room orientated third party solutions that required absolutely no thought or input by the brokers that use them, and by affiliate lead churning entities that do not belong anywhere near our industry.
In Israel, a nation whose reputation has been absolutely destroyed by the plethora of semi-literate binary options fraudsters and operators of MT4-based b-book boiler rooms that have absolutely nothing to do whatsoever with FX, and whose originators come straight from the back streets of the gaming underworld, unable to pronounce ‘Tier 1 aggregated liquidity’ let alone understand what it is and have a relationship with the financial capital-based banks that provide it.
In this week’s bill posting exercise by the frantic, monosyllabic, power-hungry lunatics that purport to be politicians in what is incorrectly labeled as the only democracy in the region, one of the enormous number of dubious candidates for the less than believable elections has, in an ironic attempt to bolster a voting base for his party, put up an image that absolutely admits that the entire nation is corrupt.
The vulgar, unpleasant levels that the infighting between politicians, cartels, mafia and brutalized public have stooped to is far too severe for the civilized eye, and a pictorial, visual reminder as to why you, the esteemed leaders of the FX and electronic trading industry, cannot do business in an environment this rotten.
As I drove along one of North Tel Aviv’s major roads on Thursday, I spotted an array of posters, all of which said “Because everything is crooked, vote straight”.
Yes, it is indeed. We all know that. Look at the bottom end of this industry’s retail sector. None of its participants have a career background in electronic markets, banking, financial technology, and none possess careers which began with a Computer Science degree at an ivy league university, followed by an internship at Goldman Sachs, followed by a career in investment banking.
Instead, they have proliferated the Mediterranean region, often operating front offices in Cyprus or Malta, with loud voices, arrogance and fraud, including everything from stealing leads from each other to using false names to dupe low-deposit customers whilst cheering and clapping when a deposit is made, before putting their banners up across islands such as Cyprus which has become an aircraft carrier for Israeli fraudsters using it as a lawless extension of home territory with loose EU regulation that they do not adhere to, often onboarding customers via staffless entities registered the Caribbean offering non-compliant trading terms and no recourse for customers, and indulging in tasteless displays of noise and unprofessional behavior at ‘industry parties’ in Limassol.
The Mediterranean is NOT home to a transparent economy. It is fraught with fighting (the same night as I viewed this poster, a rocket was fired across Tel Aviv by Hamas – a regular occurrence), is home to mafia cartels that control everything from the supermarkets to construction firms to the import of products, and is used to taking from other countries and misappropriating funding.
We have all seen the dubious entities that do not belong in our industry, so why waste valuable resources trying to sell to them? Very few honor contracts, they cancel when they feel like it, have no decent customer bases and are often devoid of any value proposition due to their here-today-gone-tomorrow upbringings.We have all been subjected the loudly portrayed attempts by Israeli entities with zero credentials whose shirtless ‘CEO’ knows better how to run everyone’s business.
Compared to the proper, well established and recognized commercial centers of the world with a proper financial markets industry and a diversified economy, this whole region places threats, honor, pride and nation-on-nation violence at a higher priority than education and commercial development. For anyone who has attempted to enter a B2B contract with an entity in the region, this is likely familiar.
That’s not to say that there aren’t some extremely competent people who have risen from the ashes of the region’s massively corrupt and oppressive environment, however those are the ones who do everything in their power to leave to London, New York, San Francisco or Berlin, as depicted by FinanceFeeds a couple of years ago, just within our industry alone.
A colleague of mine in California explained to me recently “Over 100 Israelis per week are arriving in Berlin”. Yes indeed, highly educated young people who want to make a better contribution in business and to their future, thus creating an even greater vacuum on their home turf.
It is time to go the extra mile and provide your high quality prime brokerage, technology, market integration and analytical services to firms in first tier regions with far more sustainable business models.
This is a leading edge business, and should be operating as one. You are all leading edge professionals who work hard to further the cause of the business – which is one of the many reasons I thoroughly enjoy working with you all – because you are inspirational leaders and innovators. Let’s not waste that innovation and valuable resources on those who genuinely do not take anything seriously apart from thuggery.
Friday: Charity and a potential World Record
For those who have followed some of my recent travels, it is likely that you have seen my involvement in a forthcoming Guinness World Record attempt which will take place on March 31 at Bruntingthorpe Racing Circuit in England.
The record itself should be relatively easy to achieve, and is in the cause of charity, this time being research into breast cancer.
Arranged by several Volvo owners clubs across Europe and the United Kingdom, the record attempt involves a procession of over 600 Volvo cars from all periods since the company was established, being driven simultaneously in a procession at Bruntingthorpe Racing Circuit.
The proceeds of all of the merchandise, sponsorship and fundraising activity that surrounds the event will be donated to charity, and this Friday, it came to fruition that FinanceFeeds will be sponsoring and organizing the XC90 photo parade, which will take place in Lutterworth, just 5 miles from the racing circuit, just 2 hours before the main event begins.
Let’s see if a record can be entered, and if some good can come from it!
Wishing you all a great week ahead!
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