17 November 2018 FT — Articles to Read

17 November 2018


Question: According to MSN: Money, what are twenty (20) side hustles that will make your salary soar?


German and US banks drawn into Danske laundering probe – Pg. 10

–          Three big US and German banks have become embroiled in the criminal probe of Danske Bank’s 200bn (euro) money-laundering scandal as US prosecutors examine their handling of cross-border payments for lenders

–          Deutsche Bank, Bank of America and JPMorgan Chase acted as correspondent banks, providing a link to the US financial system for Danske’s Estonian branch (Prof Note: The loss of a correspondent bank is extremely problematic for smaller local banks in smaller regions.  It can signal “loss of confidence” to much worse for the institution.)

–          The worst-case scenario for Danske is if the US Treasury – which has said it is taking an active interest in the matter – designates it “a financial institution of primary money laundering concern”, which would force US banks to stop handing dollar transactions for it (Prof Note: This will also be a HUGE issue for businesses transacting in the region as they must find other means to transact.  Western Union is limited to $2,000.00/day and must be physically transacted.  Individuals are legally limited to carrying $10,000.00 (or less) on airplanes.  This can cripple a smaller nation and the businesses operating within.)

–          (Prof Note: In some countries we must actually provide contracts and invoices to financial institutions to pay our vendors.  This is problematic due to proprietary pricing of some products and pre-negotiated rates.  In some cases, when proprietary pricing was an issue, we have had to validate transactions with letters by international U.S. law firms, i.e. increasing the cost of the transaction greatly which is then passed on the payee!  International settlement is barely covered in an International Finance class but can destroy a transaction.  The worry of financial sanction is so great that we have had local banks drive by our sites to verify receipt of product.)

–          (Prof Note: We had a crew walk off one of our jobs this past month due to nonpayment, this after they had had our check for two weeks (the account was overfunded, i.e. the money was there).  The local bank would not honour the check due to the size despite assurance from our counsel (international and local) and written statements.  Best we were able to determine was there were issues with the subcontractor.  Regardless, we (which really means them) had to incur the cost of remobilization and start-up costs…..laundering is real and a global issue)


Digital estate agents battle to build on hype – Pg. 12

–          This “i-buyer” business was pioneered by dedicated start-ups such as four-year-old Opendoor.  But Redfin entered this market last year with its Redfin Now service, albeit on a small scale.  The property listing site Zillow launched its own version, Zillow Offers, in pilot form the same year

–          Shares in Redfin have shed 52% of their market value this year….

–          “Real estate is very fragmented, there are relatively low barriers to entry to get into the business of selling houses, the products are undifferentiated and there’s no customer loyalty.  That leads to this natural fragmentation.”  (Prof Note: While I agree with this quotation, I will strongly state one needs to find the highest quality people, especially in residential, and one needs to have loyalty.  The issue is that individuals, in my opinion, transact so little in real estate over a lifetime that the average layman cannot develop an expertise in the largest transaction of most people’s lives.  I am blessed to be surrounded by some of these high-quality persons and so very happy when I refer them (I do receive a bottle of hooch) to a former student and/or peer and learn of the successes!)

–          An even greater change to customer experience comes with the “i-buyer” model, in which companies such as Opendoor take homes on to their balance sheets rather than acting as agents

–          Opendoor and rivals, such as OfferPad and Redfin, generate “instant” offers based on data covering homes nearby.  They offer completions in as little as three days, buying homes for 95 to 98% of their market cost while charging fees of 6% or more….

–          (Prof Note: Real estate is such a relationship business.  You have to have relationships and years of knowledge and experience.  Be careful when selecting real estate agents/brokers.  Always seek a recommendation from a trusted source!)


Answer: (1) Bartender; (2) Brand Ambassador; (3) Data Entry; (4) Event Assistant; (5) Focus Group Participant; (6) Food and Beverage Delivery Driver; (7) Freelancer; (8) Hair salon or spa receptionist; (9) Host or barback; (10) Lawn maintenance worker; (11) Lifeguard (Prof Note: My summer job in High School); (12) Nanny or Caretaker; (13) Park Ranger (Prof Note: I would do this for free!  How awesome!); (14) Pet sitter; (15) Retail Sales Associates; (16) Security Guard or Bouncer; (17) Telemarketer; (18) Theater Usher; (19) Tutor (Prof Note: Pays, on average, $50/hour); (20) Uber or Lyft Driver (Prof Note: I have friends/peers that do some of these jobs.  Any honest job is honourable.  Just remember, if you see me as the Bouncer at your local watering hole, I am not there to socialize, I am there for business! J)