Uncle Sean's Update - Week 52

Happy Holidays Everyone!!!!!
 
It has been a very light week as expected, but there are a few big items worth noting – below is the WK52 General Update from Uncle Sean:
 

• FIS courting Global Payments – FIS was in talks to acquire Global Payments, but negotiations fell apart over the weekend.  Check it out here – https://www.pymnts.com/news/partnerships-acquisitions/2020/fis-global-payments-eyed-merger-but-talk-broke-down-report-says/
  • Many are speculating that this is a negotiation strategy and talks will inevitably resume
  • If you don’t think payments is big business, take a look at some of these recent merger valuations:
    • The FIS / Global Payments deal would have been valued at a whopping $70B
    • for reference, the WorldPay acquisition by FIS in 2019 was $35B; and FIS has a current market cap of $90B – so this deal would have been HUGE
    • Global Payments owns TSYS per a merger in 2019 valued at $21.5B

 

• Ho Ho Holy Cow - Congress passed a $900B stimulus bill (finally)!!!!  https://apnews.com/article/900b-coronavirus-relief-bill-passed-a38250860a0e720bde8481fe1aab744b
  • “Not so fast, my friend” (intentional nod to Lee Corso during Bowl Season).  President Trump is not impressedand sent out a video Tuesday night stating that he would not sign the economic relief bill on the basis that the stimulus checks are “ridiculously low”.  Trump called on Congress to increase the stimulus checks from $600 to $2,000 ($4,000 per couple).  So for now, we sit tight and see what happens next.  https://www.cbsnews.com/news/stimulus-check-600-2000-dollars-eligibility-2020-12-23/
  • Here are the major points of what’s in the $900B package as it exists in its current form https://nymag.com/intelligencer/2020/12/what-is-in-the-usd900-billion-covid-second-stimulus-package.html:
    • $286B in direct aid to individuals
      • $166B in direct checks ($600 per person plus $600 for each covered dependent) plus another $120B in Unemployment help (extra $300 per week in benefits through March 14)
    • $325B small business help – PPP is back with $285B in funding, $20B for business in low-income areas, and $15B for live venues, theaters, and museums
    • $82B for schools and colleges (includes $54B for public K-12 schools)
    • $10B specifically for child care providers
    • $13B federal SNAP benefits (food-assistance programs)
    • $45B for transportation (includes $15B airline payroll, $14B public transport, $10B state highways, $1B for Amtrak)
    • $25B in rental assistance and expands the federal eviction moratorium
    • $20B in vaccine funding plus $9B for distribution, and another $22B to assist States with testing and tracing

 

• CSBS files suit against OCC and their “fintech charter”.  Specifically related to Figure Technologies, Inc. and their application for a national OCC charter.  CSBS asserts that the OCC is overstepping their bounds by redefining what is a “bank” and establishing a de facto nonbank charter.   https://www.csbs.org/newsroom/csbs-files-new-complaint-against-occ

 

• Direct Banks (digital divisions of chartered institutions) are making some noise:
  • Goldman Sachs is strengthening their Direct Bank brand Marcus by introducing Marcus Invest scheduled for launch in 1Q 2021.  In contrast to GS multi-million dollar private wealth management service, Marcus Invest can be opened with as little as $1,000 appealing to the masses and still incorporates a professionally managed portfolio of ETF’s that is “monitored daily and rebalanced periodically to help you meet your goals.”  More detail here - https://www.cnbc.com/2020/12/22/goldman-sachs-once-reserved-for-the-rich-is-close-to-offering-wealth-management-for-the-masses.html
  • Customers Bank is one step closer to completing the sale of their Direct Bank brand, BankMobile.  Closing of the $140M merger is expected on 1/4/21 - https://www.businesswire.com/news/home/20201221005797/en/Customers-Bancorp-Provides-Additional-Information-About-BankMobile-Divestiture

 
 
 
Random Uncle Sean Stuff:

• It’s the time of year where we see a ton of predictions for 2021 and beyond (I admit – they are all entertaining; and some have solid merit)….  Forget about it – Uncle Sean doesn’t do predictions!!!!   I broke my crystal ball back before the dot com bubble – LOL.
• Since so many of us are spending our first Christmas with only our immediate household members due to the COVID-19 pandemic, I thought it would be fun to share what it was like when me and Davey were little:
  • My absolute favorite time is when we would spend Christmas with our Grandparents in Purcell, OK.  That house was about 900 sq ft with 3 bedrooms and 1 bath; and that includes the closed in single car garage where all the men would hang out, smoke Marlboro’s, and generally solve the problems of the world (all the while admiring Grandpa’s tools on his peg board).  The house had a window unit in the living room and a floor furnace.  There were gas wall heaters in the bathroom and the enclosed garage.  Yes, that one in the bathroom would brand you if you backed into it.  Looking back, we were indeed dirt poor, but we never really knew it.  Our Aunts, Uncles, and Cousins would pack in there and it was crazy (especially the one bathroom part)!  There would be up to 15+ people in that 900 sq ft house and at night time it looked like a triage center with kids in sleeping bags covering the floor in the living room underneath the glow of our artificial Christmas tree.  You literally couldn’t walk through there at night without kicking or stepping on someone.  It was great!!!!  Our Grandma (Nannie) would wake up at 5:00AM religiously (due to all the years of making early breakfast since Grandpa had to be at work by 6AM at the train depot) and start making coffee.  I vividly remember the sound and smell of the coffee percolator immediately followed by either bacon on the stove top or homemade cinnamon toast cooking in the bottom broiler of the oven.  Our days were generally spent climbing Red Hill while looking for critters and Rose Rocks; playing in the alley; catfishing and exploring at the City Lake (hey Dave – remember that time you fell through the ice on the sled with me and Scott laughing – HAHAHA); or hunting squirrels and rabbits at Lexington WMA (we called it the Rifle Range due to it being a former military training site during WWII).  Mom and Nannie would make trips to United grocery and the Dime Store for last minute essentials pretty much every day (undoubtedly just for some peace and quiet).  Occasionally we would get a glimpse of Nannie’s S&H Green Stamp book and wonder in awe what she was going to redeem it for (precursor to debit rewards platform?).  Nights were spent playing Gin Rummy or Dominoes while we awaited phone calls from other relatives that couldn’t be there.  Grandpa was ‘hard of hearing’ so the phone had a special ringer that was like a bolt of electricity shooting through your spine when it rang – that ringer could just about wake the dead (the doorbell was twice as bad)!!!  Wait, it gets even better – our Grandma on our Dad’s side of the family lived just a block away.  We would run across the street, cut through the alley behind Ms. Kosak’s house, and be at our other Grandma’s house in less than a minute.  Even though that time period only lasted a handful of years when we were young, it was fantastic!!!

 
 
Have a GREAT weekend and please stay safe!  Happy Holidays!!!! 

Uncle Sean
smayo@fedfis.com