Uncle Sean's Update - 12/17/21

Happy Friday!!!
 
Don’t forget to sign up here to have the Uncle Sean Update sent straight to your inbox each week – EVERYBODY’S DOIN’ IT!!! 😊  Here is the Uncle Sean Update for 12/17/21:

• It’s Fed Week!!!!  As was widely expected, the FOMC voted to accelerate the pace of the bond taper from $15B per month to $30B per month beginning January 2022.  This puts the Fed on track to eliminate the QE program by the end of March 2022 clearing the way for likely interest rate hikes for the remainder of the year to tame inflationary pressures.
  • If you want to completely geek out (like me), here is the link to Chairman Powell’s post FOMC press conference video (1 hour); the 30 page written transcript; and the actual Summary of Economic Projections (17 pages) where page 2 shows the expected Federal Funds rate to end up at 0.6% - 0.9% by 2022 year end as well as the infamous Dot Plot (page 4) with the majority of the 18 member FOMC committee forecasting rates just shy of 1% by year end.  Whew, that was one hell of a run-on sentence!!!
    • Keep in mind that the Summary of Economic Projections (SEP) is “not a plan” (quote by Chairman Powell).  it is a median of assumptions based on the assessment of current economic forecasts (which are still highly variable and subject to change due to the uncertainty of forecasting during a pandemic that can rapidly effect supply chain issues, labor shortages, etc.).  
      • Think of it kind of like the Treasury yield curve – it moves with time, and is a quantitative measure of current assumptions, but is not necessarily predictive policy.  WOW, that was deep…  I may need a nap now – LOL!!!!

 

• The Consumer Financial Protection Bureau (CFPB) breaks out their magnifying glass to take a closer look at industry practices, risks, and benefits of BNPL (pretty sure everyone knew this was simply a matter of time).  The formal CFPB Inquiry into "Buy Now, Pay Later" credit was sent to Affirm, Klarna, PayPal, and Zip.  You can see the specific questions here in the actual CFPB Order (16 pages) – the key focus is on consumer credit related to:
  • Accumulating debt; Regulatory arbitrage; and Data harvesting

 

• WhatsApp has launched a test pilot for crypto payments within a chat app.  If this sounds overly confusing, it’s because it kind of is – at least from a naming convention (especially for more “seasoned” white-haired folks like me).  Let’s break it down:
  • Essentially, this is all Facebook (err – Meta) ecosystem…
    • Novi (a subsidiary of Facebook – err, Meta) is a digital wallet that was built on the Diem blockchain-based payment system (formerly known as Facebook’s Libra project).  Diem is also owned by Facebook (ugh – Meta).
    • WhatsApp (you guessed it - also owned by Facebook – I mean Meta) is a free messaging app that started as an alternative to SMS (texting)
    • In summary, Novi (Facebook / Meta digital wallet) will use WhatsApp to send crypto payments over the Diem blockchain using Pax Dollars (USDP - a stablecoin pegged to the US dollar issued by Paxos).  Very similar to just attaching a file when sending a message.  In this case, the file is USDP.  See – that wasn’t so bad!!!

 

• Wells Fargo and HSBC Bank announced an agreement to use a blockchain solution to settle FX transactions side-stepping CLS for the settlement of “US dollar, Canadian dollar, British pound sterling and Euro transactions with plans to extend the platform to settle additional currencies in the near future.”  The platform runs on Baton Systems’ Core-FX distributed ledger technology; and allows Wells Fargo and HSBC to settle FX trades in less than three minutes outside of the CLS framework.

 

• Chime announced free cash deposits at Walgreens.  While Chime customers can deposit cash at other retailers (Walmart, CVS, 7-Eleven), Walgreens is the only one without a fee.

 

• Robinhood (Nasdaq: HOOD) announced that Chainalysis will be providing compliance services ahead of Robinhood’s upcoming crypto wallet launch expected to beta in January with a waitlist in excess of 1.6M customers.  Also announced this week was Robinhood’s new Crypto Gifts feature allowing customers to send as little as $1 of one of seven cryptocurrencies to friends and family. 
  • Hmmm – does this become the new digital replacement to lottery tickets as stocking stuffers????  HOOD better hope so as their stock price is down about 65% since their high on August 2 earlier this year – OUCH!

 

• Of course not to be outdone for the Holidays, Square Cash App (oops – I mean “Block” Cash App) now allows users to 'gift' stock and bitcoin using USD balance or debit card, not just their existing bitcoin balance.  This means “users don’t have to actually own any bitcoin — or any stock, for that matter — on the Cash App mobile app in order to send it as a gift…  users will actually be sending the fiat value of the stock or the bitcoin from either their Cash App balance or a linked debit card…  The recipient will then receive the market value of the asset at the time they accept the gift. But if they’d rather not take the stock or bitcoin ‘gift,’ they can instead choose to receive the gift in USD.”    

 

• Astra announced the launch of card-to-card instant payment API via Cross River Bank to enable fintech developers “to fund accounts and facilitate deposits via the debit card payment rails” as a real-time A2A solution “without the need for settlement accounts or developing a reconciliation process.”

 

• MoneyLion (NYSE: ML) has agreed to acquire Even Financial, Inc. for $440M.  Once completed, the deal is expected to add $90M in recurring revenue and positive EBITDA impact in 2022 (excluding synergies).  Check out the nicely done Investor Deck showing complimentary yet diversified offerings resulting in an instantly expanded TAM for MoneyLion within the embedded finance industry.

 

• Widely rumored for a few months now, Bottomline Technologies (Nasdaq: EPAY) has agreed to be acquired by Thoma Bravo in an all-cash transaction that values Bottomline at approximately $2.6 billion – NICE!!!!!  Upon completion of the transaction, Bottomline will become a privately held company.

 

• Idaho Central Credit Union announced the launch of bitcoin services through NYDIG and the Alkami Platform allowing the $8B CU to offer their 480,0001+ members the ability to buy and sell bitcoin within it’s mobile app and online banking platform.
  • Worth noting in case this sounds familiar, STAR Financial Bank also launched NYDIG bitcoin services via Alkami platform last month

 

• And a few quick counterparty risk updates to ponder:
  • Security teams dig in and prepare for the potential reality of a far reaching multi-year threat from the Log4j hack
  • Network congestion was to blame for Wednesday’s brief AWS outage and not related to last week’s material US-EAST-1 outage

 

• Notable FinTech funding for the week (follow the money):
  • NYDIG (bitcoin custody, trading, and brokerage firm) announced a whopping $1B growth equity funding round (CHA-CHING!!!) at a valuation in excess of $7B
  • Anchorage Digital (qualified crypto custodian and national trust chartered institution) raised $350M in Series D funding with a valuation at over $3B
  • Papaya (mobile bill payment app) raised $50M in series B funding round making it super easy to pay any bill just by taking a picture (and free to consumers)
  • Mesh Payments raised $50M in Series B funding round
  • Noname Security (API security platform) raised $135M in Series C funding at a $1B valuation to fund global expansion of go-to-market and R&D teams
  • Cequence Security (API security) raised $60M in Series C funding round
  • Ermertic (cloud infrastructure security platform) raised $70M in Series B round
  • Sysdig (cloud deployment security) raised $350M in Series G funding at a $2.5B valuation

 
 
Random Uncle Sean Stuff:

• 8 days until Christmas Day!!!!!!!!  Don’t forget to watch “A Charlie Brown Christmas” on Sunday, December 19 at 6:30 CST / 7:30 EST airing on PBS.  Some of Uncle Sean’s other favorites include National Lampoon's Christmas Vacation ("Oh, the silent majesty of a winter's morn; the clean, cool chill of the holiday air; and an assh*le in his bathrobe, emptying a chemical toilet into my sewer" and “Mom, this box is meowing”), A Christmas Story (“I triple-dog dare ya!”), Frosty the Snowman (“I can count to ten. One, two, three, four, five, nine, six, eight... Well, I can count to five.”), Rudolph the Red-Nosed Reindeer (“The fog is thick as peanut butter!”), and of course It's a Wonderful Life (“Hee-Haw”)!!!
• I’m cutting out early today….  It’s Dave Mayo's Birthday (tomorrow) - several of us are headed over to his place to drink some Holiday Cheer and celebrate the anniversary of his 39th birthday (again)!!!
• And without further ado, we continue the Top 21 Countdown of Dad Jokes and crazy Uncle Sean moments (according to me) that I posted for 2021.  Here are #16 - #12:
  • #16.  I brought home one of those greyhound dogs the other day and Aunt Patty asked if I was going to race it - I said nope, I’m pretty sure he’s faster than me!
  • #15.  If you stir coconut oil into your kale, it makes it easier to scrape from the pan directly into the trash.
  • #14.  The boss came by today and said “have a great day” – so I went home…!!!
  • #13.  Staring curiously at a jar of Molasses…….  So what do they do with the rest of the mole???
  • #12.  And an instant family classic – I named my horse Mayo.  And sometimes Mayo neighs…  LOL!

 
 
Have a GREAT weekend and please stay safe!!!
 
Uncle Sean
 
 
Sometimes known as Sean Mayo – contact me directly for scope and pricing of custom reports / analysis projects at [email protected] | 214-604-6961 – or you can contact FedFis Sales Team at 512-960-0911 | [email protected] #FedFisHasTheData FedFis
 
FedFis, LLC disclaimer – The views and opinions of Uncle Sean are of his own and may not necessarily represent the views, endorsements, and/or opinions of FedFis, LLC – we all know he’s a little bit different; but that’s why we love him.