The Future of Banking: Season, Cycles & Shifts in Direction

Over the course of the last week my family and I have been coming to terms with the death of a loved one.   Having attended the funeral yesterday, and thinking back on the life of an individual that experienced nearly all of the last century’s ups and downs, I was reminded about the circle of life.

We all experience the sadness, grief, and in many instances unwillingness or anger, at accepting the changes that are, or have taken place.

My Grandmother-in-law was an eternal worrier. No not a warrior like William Wallace, but a worrier.  The reason for this was that she grew up and was ‘educated’ during the Great Depression, beginning work at the tender age of 12.   Given that upbringing, she struggled to understand the conspicuous consumption, and indeed prosperity, that the western world wallowed in. It was somehow ‘strange’ to her, I suppose.

Likewise, my maternal grandmother, a truly phenomenal human being and a real battle axe, (I’m not sure how many 90-year-olds can still manage a globe-trotting lifestyle) is no different in her thinking.  Her habits were also deeply formed during the depression years.

Change is Constant

Why bring this up?  Well two reasons really.  One is that to expect everlasting prosperity, or in fact everlasting poverty is unrealistic.   The second is that of a changing world.   Death, changes in the seasons, formation of small islands, destruction of small islands, global warming, global cooling, and the rise and fall of individuals, businesses, religions, cultures and countries all form a part of it.

The world works in this way, always has and always will.   As humans we would love for this not to be the case.  We would all welcome spring and revel in summer, but then try to change the fact that autumn and winter too will come to chill our bones.  To attempt to change the course of the seasons would be completely futile.  The planet cares not for our wants and wishes, it’ll do what it’ll do, people be damned.

The Seasons of the Financial Market

The global financial markets are no different.   How we accept and adjust to this reality is what we need to concern ourselves with, not changing something that is inevitable.

So again, what does this have to do with anything?

Right now the ‘seasons’ are changing, and we need to adjust accordingly.   There is little reason to become angry or endure feelings of sadness, grief or bitterness.   We must simply adjust.

Summer and Fall

The ‘summer’ that has been enjoyed in the west, and in particular offshore banking centres like that of Switzerland, is certainly moving towards Singapore, Hong Kong and the lesser-known jurisdiction of Labuan. The crackdown on UBS and other banks has caused investment capital to go in search of greener pastures or sunnier climes.   The aforementioned Asian countries still offer some of the world’s best asset protection, privacy and certainly service levels.

Looking at the poster child of the “eat the offshore rich” fiasco, UBS, we find that according to their very own Jürg Zeltner, they have lost an estimated $200 billion over the last 2 years due to the involvement of the US parasites… uh I mean Government.  This excludes settling with those same parasites.

UBS Group: A Prime Example

However, in Asia UBS has won more new money than it has lost in its dealings with the US Government.   The bank plans on hiring an additional 400 private bankers for the Asia Pacific region.   It currently has 867.   This is roughly a 46% increase.

Glancing at the NY times I find that over at Credit Suisse CEO Walter Berchtold, is saying that net new assets coming into the bank from rich clients in Asia will grow more than 20% a year.

Fearing that I might have some sort of undeserving bias for the Asia Pacific region, since I focus much of my energies, capital and personal leisure time here, I search for contradictory information.  It’s futile!   Swiss-based Julius Baer is developing Asia Pacific as its second home base, with plans to double its assets in Singapore and Hong Kong within 5 years.  Sorry North America (and Germany, et al), we have seen the future.

It’s Time to Accept the Change and Adapt

Of course none of this should be news to you if you’ve been paying even modest attention to the investment banking and asset protection arena.   If you’re a US citizen trying to bank offshore (my condolences) then you’re already afforded the status of a leper, but don’t think for a minute that your current disease is temporary, because we’re still in the early stages of the death throes of the nation-state.   The ‘seasons’ are only just changing.

While European governments steal data from European banking centres, and the US government cracks down on any banks it can get in its sights, Asia rapidly and quietly continues to suck up all the capital it can.   The world has changed folks, and what used to be is no longer.  It’s time you accept the loss, grieve if you must for what has been lost, but adjust accordingly, because the world will change with or without you.

I’d love to know at what stage of the grieving process you are at.

Denial?

Anger?

Acceptance?

Let me know below.

Live Like You Mean It,

Chris Tell

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