Episode 16: 26th October 2015

Good morning, welcome to Payments Monitor, my name is Faisal Khan, today is the 26th of October 2015, some stories for today are:

TOP STORIES

Trouble is brewing for Deutsche Bank as the US Justice Department and the New York Department of Financial Services are expanding their probe of money laundering at the German Bank’s Moscow unit to what now may seem like potential breach of Western sanctions against Russia after its 2014 annexation of Crimea. The US Dollar trades being investigated amount to US$ 6 Billion.

Some good news for China in the coming days, the International Monetary Fund have given strong signals that the Chinese Yuan could soon join the fund’s basket of reserve currencies, better known as Special Drawing Rights. SDRs were created in 1969 to boost global liquidity as the Bretton Woods system of fixed exchange rates unravelled.

Champagne bottled are undoubtedly being uncorked at VocaLink, the British firm behind UK’s Faster Payments, as it signed a letter of intent with US bank based ACH The Clearing House. Clearing House says the ISO 20022 standard real-time payments system will be designed to help US financial institutions gear up and execute real-time payments. This is a big win for Vocalink that lost the Australian real-time payments deal to SWIFT, while it did bag the Singapore real-time payments deal. All this pushes up reasons for the rumors of a SWIFT + Ripple merger to happen.

You can tell a lot about an economy from the way it orders its nuts and bolts. Daniel Florness, Chief Financial Officer of Fastenal Co told investors “The industrial environment’s in a recession. I don’t care what anybody says”. His reason for saying so? Declining orders for his company’s nuts and bolts. Spending across the US industrial sector has slowed down, with some industrial giants downright pulling back on machines and parts orders. Quarterly profits and revenue at big American companies are all set to decline for the first time since the recession.

The markets are mixed on this Monday morning. The Dow Jones, Nasdaq and Crude Oil are all in the red, while US 10 Year Treasury Note along with the a stronger Euro are looking good in green!

BLOG OPINION:

We’ve all been educated in more ways than one, of how the US Federal Reserve makes money. How it can magically go to an imaginary printer and print US Dollars. What about the reverse, what does the Fed do when it needs to take money away from the money supply? Does it just go towards a shredder? Not quite. Episode 659 of NPR’s Planet Money addresses just that, titled “How to Make $3 Trillion Disappear”. The answer will surprise you.

CLOSING THOUGHTS

Fourteen years ago Steve Jobs showcased the iPod to the world. The reactions were mixed. MacRumors.com one of the oldest websites dedicated to the Apple fan community recorded the moment. In hindsight it is very easy to scroll back and roll-eyes at the naysayers. That 23rd October 2001 was a pivotal moment, and fast forward to today where Apple Pay just turned 1, it will be interesting for us to scroll back a few years from now and look at how the Naysayers reacted to Apple Pay.

You can access all the links of this podcast on paymentsmonitor.com - That’s all for today, my name is Faisal Khan and you’ve been listening to the Payments Monitor. Speak tomorrow!