PSP’s vs. SWIFT Network

Picked up from

Turns out the SWIFT network, which has been around for decades as a means to transmit monies around the world in multiple currencies was hacked.  When I first started in the asset management worked circa 1995, SWIFT was touted as the forefront of secured, speedy information transmittal.  SWIFT was how all major financial institutions transmitted monies to each other.  But I should have seen this hack coming.

In the last 3 years of working with and for retail-facing Margin Trading Product (“MTP”) companies, the amount of “bank wire” deposits has been dwarfed by the number of and notional volume of Payment Service Provider (“PSP”) payments.  Especially from less-developed regions of the globe.  China, SE Asia, Eastern Europe, Latin America…..all these regions are seeing a rapid shift to PSP’s as a means to transmit monies.  Everything from trading accounts, to buying toilet paper is not happening via PSP’s.  Think of PSP’s as a less-regulated version of PayPal; but not as sophisticated as cryptocurrency accounts.  Users can open PSP accounts easily with one of hundreds of providers, and there is little ability for regulators to demand and enforce Know Your Client (KYC) laws.

The PSP companies can pop up almost overnight and can shut down just as quickly.  There is little oversight.  And there is a value chain of larger and larger companies that ends at the top with the global credit card companies like Visa and MasterCard.  So clients end up paying a healthy transaction fee, but it gives a moped/taxi driver in Indonesia access to fund trading accounts or to purchase home goods that he could never previously get access to.

My thoughts are that the PSP world sits right in-between crypto-currencies and bank wires; there are features that users like and just enough control that regulators are not pounding at the door to be let in.  The space will continue to grow rapidly until the time comes that a massive-level company goes out of business and takes client funds with them.  But until that point, there is lots of room to grow in the PSP space.



Crude But Correct re: “Bathroom Bills”

From @KFCBarstool (

Trump may have some crazy ideas and he may have said some discriminatory shit before, but he’s spot on accurate when it comes to this drama about bathrooms and transgenders. I do not give a FUCK about where people go to the bathroom. Girls, guys, guys who became girls, girls who became guys. We’re talking about where people sit down and poop. Who cares who is in there? Everything is either behind closed doors or not visible anyway. I will pee next to a tranny right fucking now, no problem. If you’re scared or threatened by that you’re a pussy and you have some sort of weird sexual insecurities. And if youre like Curt Schilling and picture transgender people as some sort of gigantic animals, let me assure you that there are disgusting women going in womens rooms and horrendously creepy men going in mens rooms. There will be creepy transsexuals and normal transsexuals just like every other walk of life. Who gives a shitttt about where they pee.

Mark Suster’s Recap of Google’s Project Aristotle

I read with great interest the New York Times Magazine series on Google’s quest to document how to make great teams is a very good recap of the longer article.   Read the longer, magazine piece if you have an hour.  Read Mark’s recap below if you want the cliff notes.

Oh….and follow Mark Suster on Twitter @msuster

Friday 5

  1. Kaskade’s Redux Tour in 2013 and 2014 are some of the best electronic dance music live events I have ever heard.  Great for listening while doing work or while working out.
  2. I am strongly against the state governments using the shitty excuse of “religious liberties” as a justification of discrimination laws.  I think those States should feel the dollar-denominated repercussions of their actions.  But I do sympathize with this bookstore owner in Asheville, NC.  And I realize that if through economic actions we force like-minded social liberals out of religious states, then who is left to fight to keep those states liberal?
  3. As Big Banks lay off thousands of employees, the FinTech start ups that will succeed will find a way to make a culture where some (not all) seasoned financial service executives can fit in.  That is not easy to do.
  4. Two thoughts from the currency world.  First, there is a heavy bias towards long USD positions, especially vs the Euro and vs. the Japanese Yen.  You can give me all the justifications in the world about why this is technically or fundamentally a good long term position.  But markets work to force out weak hands.  so as we continue to see long USD positions build up, I look to be short and await the capitulation that I suspect is still pending.  USDJPY currently at 108.50; targeting a 105.xx level.  EURUSD at 1.1275; targeting a 1.15xx figure.  Second thought is fundamental.  Though the Japanese economy stinks, and interest rates are negative…..someone smarter than me pointed out that the deflation rate in Japan is worse than interest rates….therefore the relative interest rate in Japan still makes it better to keep JPY in the bank than lend it out.
  5. Finally,  re-reading Gary Keller’s “The One Thing“.   Good reminder to get done the one thing each day/week that, by accomplishing that one thing, will make everything else easier and/or unnecessary

Can Key to FinTech be Cross-Margining?

Quick thought which I will be sure to more fully develop (which in turn can develop into a case study, then an obsession, business plan, etc…) with regards to Fintech.

Why so many accounts in so many places?  Bank, brokerage, retirement (401k, IRA), kid’s college funds, credit cards, home asset/loan, car asset/loan…..

Could I not have a single account showing me my “wealth” and from that account any payments, loans, fees, income can be debited or credited.  And any assets and liabilities updated with some version of truthful mark-to-market values.

It is really cross marginning my financial life.  An account like that would be the center of my financial self.  Big danger if the account were hacked.  But wouldn’t an account like that vastly simplify financial matters?

Where are You on This Plot?

The recent spate of state legislatures to enact, or attempt to enact discriminatory laws (North Carolina, Georgia, Mississippi) has me thinking about each of our differences and how it really effects others in your society.  Mississippi voters want to be able to discriminate based on their perception of another person, but what if they are wrong?  How do they know if someone is gay if that person does not specifically convey their sexual orientation?

Each of us has differences, and what can make those differences important is if the difference is visible or not, how deeply the difference effects you, and how deeply it can effects others (if visible or known).  I have come to think of it as a simple (but important), three axis chart.

X-Axis: Is your difference visible to others?  One of my ears is shaped slightly different than my other.  This is a minor difference that has been noticed by a minuscule fraction of a percent of people I have interacted with.  In fact it has never been mentioned to me, but I can see it in the mirror.  But some people’s differences are massively noticeable; an amputee, someone with facial burns, someone who chooses to dress outlandishly (or conservatively), or a gay couple who choose to show their love with public displays of affection.  This matters to the individual as it effects how others in society view each of us.  And that, in turn, has an effect on how we view ourselves.

Y-Axis: How a difference effects ourself.  My slightly and almost imperceptible difference in ear size effects me exactly zero.  I can not think of any event in my life that has been effected by the fact that my ears do not perfectly match.  But for someone who is gay, or of a certain religious belief, or someone who believes aliens reside on Earth…..their daily actions are effected by their difference.  The gay couple may choose not to go to a certain restaurant (or straight people may choose not to go to a certain part of town), the Buddhist may need to take time during the day to pray, and the people who believe aliens walk among us, well, not sure how they are effected but that must effect your day-to-day decision making.

Z-Axis: How other treat you due to any visible difference.  Maybe the alien-believer lives in a community in Northern Arizona where everybody believes aliens inhabit Earth.  That makes life a lot easier for the believers.  But what if the gay couple live in a small beach community in a state that just passed a pro-discrimination law?  Do they now avoid certain stores?  Will other citizens treat the gay couple differently now?  Do they need to uproot their lives and family and move to a different state?

But this raises two important questions….1) How do we know what any person’s difference(s) are unless they purposefully tell others?  If I showed you a picture of a conference I attended and stated that two people are gay and one transgender, I bet you could not pick those three out of the 28 people in the picture.  So for those who support the pro-discrimination laws, how do you who to discriminate against?  And what if you are wrong, are you opening yourself up to civil or legal complaints?

2) Why care what others’ differences are if you can not see them and they do not effect you?  You probably do not see the differences in my ears, and even if you looked real close, would that difference effect how you view and treat me?  What if I was a Buddhist?  What if I had a massive scar on my back (that you can not see unless we are at the beach) because I donated a kidney?  And for my fellow conference attendees who are either gay or transgender, if you can not see they are different than you, you could not purposefully discriminate against them, correct?

So what does it matter what one’s differences are so long as the person is not causing harm to you and your society?  The pro-discrimination crowd will tell you it is about religious liberty.  That their belief of something is so strong, that they can not accept it even in others.  That it is not good enough to live by one’s own creed and beliefs, but that one has the right to force one’s own belief on others.

But can that be the case?  Is that a valid way to view society?  Or do they believe in that only when they are in the majority?  Because those who are pro-discrimination and back laws to allow them to discriminate based on their beliefs are likely to change their tune if those they discriminate against were to gain the majority.