Tarffis and Tarot Cards - Trying to Make Sense of it All

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Hey Fintech Nerds 👋

What. A. Week.

I hope you’re holding up well. Trying to make sense of the world is tricky. For my part, I’m exhausted. Full-time dad, shipping a brand new event (for Sardine and another for Fintech Nerds), and a whitepaper that launches Monday, all with home renovation going on. It’s been a lot!

This weeks Rant is me trying to make sense of what it all means for finance. I also put a lot of work into this weeks Good Reads, Tweets and Things to Know. If you normally skip those sections, be sure to check them out.

Finally, thank you to everyone who’s supporting Fintech Nerdcon: sponsors, ticket buyers, and good humans. Help us make this the event you can’t miss.

PS. No brainfood next week, I'll be in Morocco with the family taking some rest.

Here's this week's Brainfood in summary

📣 Rant: Tarrifs and Tarot Cards.

💸 4 Fintech Companies:

1. AgentAv - Shopify for AI Agents (kinda)

2. Fuse - The Cross Border API for the Middle East

3. Roam - Assumable Mortgage Financing

4. Rentflow - Property Management and Collection Platform

👀 Things to Know:

1. Robinhood is coming to Europe

2. Ripple pays $1.25bn to acquire Hidden Road the Prime Brokerage

📚 Good Read:

1. Jamie Dimon's Annual Letter

2. Blackrock's Annual Letter

If your email client clips some of this newsletter click below to see the rest

Weekly Rant 📣

Tariffs and Tarot cards - How Tariffs Change Financial Services

Tariffs crushed markets

They've crushed the risky Fintech stocks

Tariffs crushed markets.

The announcement sent fintech stocks into freefall, with banking shares plunging 15-25% overnight. The ripple effects went far beyond what anyone expected. Bank stocks took a pummelling:

Then it all went away.

Stock markets rallied, but then fell through Thursday’s trading. Because uncertainty is not a future the market wants.

Why did this happen? The bond market is usually hard to predict. But the most plausible theory is that the tariffs blew up the basis trade, which drove bond yields higher.

US Treasuries are US Government debt. Before tariffs, they were running at around 4.3% for the 10yr. The hope was that tariffs would drive this lower as a negotiating tactic to get other governments to refinance their debt.

If they got that from 4.3% to 4%, that could save the US Government $300bn of debt repayments. That’s a good thing when you have a high cost of repayments.

Instead, US Treasuries went over 5%. 

Some argue China dumped treasuries. Now it appears it was actually Japan.

Others that investors lost confidence in the US Government. Plausible. US Debt is now giving a higher yield than Greece. Greece that got bailed out its debt situation was so bad.

Tarrifs backfired spectacularly, but may have brought everyone to the table to deal with the biggest issue of our time. We need a new global financial order.

What happens next? We don’t know. So far the plan appears to be to blow things up, but that could be about to change. This summary from the WSJ is excellent

The credit markets were about to explode. 

Jamie Dimon appeared on Fox News and delivered an almost perfect pitch for more caution, and it looks like Treasury Secretary Scott Bessant had a whole flight from Florida to D.C. with Trump to find an alternative path.

We now have a 90 day period where the rest of the world gets 10% tariffs and China gets 104%.

And it appears insiders were buying hours before the decision came to lift the tariffs.

Unpredictability is the new normal.

We may have avoided a depression, but we’re firmly tracking towards a recession.

With much noise, so much uncertainty. What do we hold on to?

Here’s how I’m trying to make sense of it:

• Immediate implications we’re seeing that will last from this week of madness. 

• Fintech vulnerability to recessions

• Opportunities in fintech while the world is in flux

For fintech companies, these treasury yield spikes and market volatility moments directly impact funding costs, capital availability, and customer behavior in ways we're only beginning to understand.

Enjoying this? You’d probably enjoy coming to Fintech Nerdcon, the 2-day event in Miami, November 19th and 20th. Full of Fintech Nerds.

Immediate implications I'm seeing

While the market chaos plays out at macro levels, specific business impacts are already visible across the fintech ecosystem:

1. Pausing IPOs: Who'd want to list during a Category 5 hurricane? What’s gonna happen next. We have a 90 day stay of execution. Will companies try sneak out before that ends?

2. A drop in cross-border trade: Import / Export heavy companies (think drop shippers on Shopify) costs increased anywhere from 10% to 104%. Imports from China (AliExpress) are a major part of this industry. Many ordered inventory ahead of this date, so there's maybe a ~3-month period where they're ok but then costs ramp. If margins are low and costs spike that's going to be painful. Even 10% is a major hit. Chinese sellers are already de-listing from Amazon. 

3. Cross-border payments compliance gets harder: Importers have to send an ACH payment to Customs Border and Protection (CBP), but calculating what they have to send will be a paperwork nightmare.

4. E-commerce gets a supply chain disruption: From Techcrunch with Ryan Peterson: Over 30% of all the e-commerce brands — the large ones — have set up their fulfillment in Mexico," Petersen explained. "So that's all going away, or at least the duty-free aspect of it."

A lot of what the US exports is services, not goods. And finance is a service. But its also a service that is incredibly exposed to the real economy. 

You cannot separate this trade war, and the remaking of the global order from a possible impact to the economy. A consumer who was already suffering with high rates, and a low social mobility now has uncertainty thrown into the mix. This damages confidence, damages spending and creates churn and credit risk for Fintech companies and banks.

Fintech Vulnerability Index: Who's Most Exposed?

​​The tariff shock creates a clear hierarchy of vulnerability across fintech sectors – understanding this landscape is crucial for both operators and investors:

Lets unpack why:

Lending: Fintech and non-bank lenders get squeezed on both sides. Without deposits as a stable funding source, their credit supply could be limited. The demand never goes away, but the revenue stops if you can’t fulfil it with new lending, usually around the same time as borrowers start to default. 

You saw this already in public markets:

They’ve come back almost entirely since the pause, but the implication here is that the erosion of confidence creates risk for these lenders if we head towards a recession.

Payments: The merchants in the "real economy."like boutique brands or coffee shops start to perform less well as the consumer struggles. This would impact your Clovr, Square and Toast payment volume (TPV). Marketplaces like Etsy often are filled with consumer discretionary, and the tariffs on goods from places like Temu and Shein could drop card volumes dramatically. So now your big e-commerce players growth might be impacted too.

Wealth Management: If you make a % fee on AUM and the AUM goes down dramatically, so does your revenue. These models tend to compound over decades, so its unlikely to be existential but its challenging. The longer this goes on, the less wealth there is in the economy, the harder it gets. The silver lining might be trading and brokerage activity picking up in volatility. But that requires a consumer with available cash.

Banks: SMB and commercial franchises might suffer the most. They're at the very core of the economy. Businesses that rely on foreign parts to manufacture products are exceptionally exposed to tariffs. For example, 60% of the components that make a Boeing aircraft come from abroad. Expand that across agriculture supplies, transport, electronics, property development. 

You could see the acquiring, consumer cards and payments P+Ls also being impacted. Larger money center banks who do cross-border trade will see those franchises struggling, but also have an opportunity to extend much more working capital to try and weather this storm. The upside will likely be for the investment bankers, who will see much more activity on structured products and clients looking to hedge tariff risk somehow. 

Banks have entered a looser regulatory environment, and may see Basel III walked back, open banking walked back and more of a role in consumer payments. If they can stay solvent and we don’t get a major recession or financial crisis scenario, they could do well overall. 

(Banks could be a whole Rant in their own right, so much to unpack)

Regtech: In the age of Government efficiency, Government is being pushed to use much more tech and AI, but by extension, so are the banks that government regulates. If there was ever a time to have a high quality Regtech solution adopted by major institutions its’s now. My caution here is that there’s a good way to do AI in finance and a bad way. The bad way is to just give an AI access to underlying data sets, or worse, to drive legacy systems without any oversight or control. The better way is to ensure the AI agents are trained properly (have a whitepaper coming soon on this, hit reply for a preview). Evals matter.

Crypto/Onchain: While some of the more speculative projects have seen drawdowns, stablecoins keep growing, the regulatory picture keeps improving, and quietly, institutions are moving into Tokenization. When markets are this volatile, traders need to be as collateral and margin-efficient as possible. If you can’t get access to capital over a weekend, and Trump has just announced a new tariff you can get crushed. The institutions want instant, 24/7 collateral and margin. This will happen in late ‘25, early ‘26 and be bigger than stablecoins.

Consumer debit: Chime and Cash App are becoming much more mainstream. As the middle class hollows out, as the cost of everything becomes unaffordable, and credit less available, those who can be cost efficient and profitable have a unique advantage.

Opportunities

While markets panic about short-term chaos, forward-thinking fintech founders should be looking for opportunities. Here are six specific openings I see forming in the market disruption:

1. Supply chain financing for companies reshoring production. Does this financing product exist? Likely the big banks are starting to package this for their larger corporates. But what would this look like for drop shippers, marketplaces, e-commerce?

2. Working capital solutions for businesses facing higher inventory costs. If your inventory spiked by 10%, but your sales didn’t, how can you smooth out that gap?

3. Stablecoin payment solutions for new trading corridors as supply chains shift. It’s hard to get dollars in and out of Vietnam, but stablecoins are a little easier. This is already happening, but expect it to go mainstream.

4. Financing platforms for domestic manufacturing expansion. Is there a “BNPL for re-shoring or near-shoring?”

5. Risk management products for currency and trade flow volatility. What’s the futures contract equivalent for tariffs? What swap products might exist? The entire market is looking for routes around the tariffs and they change day by day.

6. Digital solutions for customs documentation and compliance. Sending checks or an ACH to customs border protection (CBP) is one thing, but I can imagine a ton of companies now need much more adaptability in this process.

We're headed toward something new. Something different. Something risky.

But remember – financial services exist precisely to manage uncertainty and risk. That's our industry's purpose. In chaotic times, the economy doesn't need less fintech – it needs better, more resilient fintech solutions.

The companies that weather this storm get to define the next era of financial infrastructure.

Let’s get to work.

ST.

As a complete aside, "Liberation Day" has such a god-awful Handmaid's Tale feel to it I can't unsee it.

4 Fintech Companies 💸

1. AgentAv - Shopify for AI Agents (kinda)

AgentAv helps agents and merchants manage secure commerce transactions. Merchants get an API that helps agents discover products and make payments more easily. Agents get e-commerce task capabilities and the ability to handle complex checkout workflows.

🧠 Everyone is trying to figure this out. What platform lets you sell to AI Agents, and how do those Agents credential themselves? One route is to be a platform that gives both sides the tooling. It's a good swing.

2. Fuse - The Cross Border API for the Middle East

Fuse simplifies money movement into and intra-Middle East with a single API. It handles localization, compliance, and reconciliation. Global companies like D-Local and rising stars in Crypto like Nilos and Lemfi are clients. It provides virtual IBANs, wholesale FX rates and local compliance.

🧠 There are some markets where existing cross-border API solutions have limited coverage. If well covered, those markets become strong niches to own. The region has high GDP growth but complex regulatory systems and banks that can be hard to partner with. In Europe, EMI-based platforms like Modulr provide this type of service; think of it as BaaS for a region.

3. Roam - Assumable Mortgage Financing

Roam helps buyers secure a home for ~2.5% instead of the ~7.3% market average for a mortgage. Assumable mortgages let buyers keep the rate used by the seller. All FHA and VA loans are assumable mortgages, and there are no additional fees for the seller.

🧠 This has a meaningful ROI. Assuming a mortgage, it can save the buyer $200,000 over the life of a loan. This process used to take an average of 180 days; Roam's innovation is to bring that down to 45. Roughly 1 in 3 FHF and VA loans are assumable, so there's a meaningful opportunity for the foreseeable. However, I have to wonder what happens to this business if rates come crashing down to stimulate the economy in a post-tariff world.

4. Rentflow - Property Management and Collection Platform

Rentflow helps landlords collect, track, and chase rent payments from tenants. It provides a tenant and owner dashboard for communication, helps landlords manage suppliers' costs, and produces a full P&L across a property portfolio.

🧠 This industry one of the last holdouts of the giant spreadsheet. Every property management company had one. Rentflow works across Europe in multiple languages. Europe has a lot of intra-country and language property ownership as it has become more integrated over the past 20 years. This is becoming a scaled niche.

Things to know 👀

1. Robinhood is coming to Europe

🧠 Robinhood has been live in the UK since 2023. They’ve launched options trading and shaken up what was otherwise a sleepy trading and investments market (iii, Hargreaves Lansdown hadn’t really been all that innovative.

🧠 Europe is a market where consumers don’t invest. Can Robinhood’s very American approach turn that into an opportunity where others have failed?

🧠 The UK and Europe are both trying to unlock their capital markets. The EU is larger than the USA by GDP, but its capital market is not nearly as active. 60% of US consumers own stocks, its anywhere between 30% and 1% in Europe.

🧠 Eastern Europe is a growing market, that is underinvested. Poland and the Baltics have some of the fastest growing economies in the world if Robinhood can move the consumer investment space from 1% to 10% that’s a massive opportunity.

🧠 This is Revolut’s home turf. Revolut has done really well expanding in Eastern Europe, and in its investing products.

2. Ripple pays $1.25bn to acquire Hidden Road the Prime Brokerage

Ripple is acquiring Hidden Road, a prime broker for both traditional and digital assets for $1.25bn. This is one of the largest digital asset acquisitions ever. Hidden Road will use Ripples RLUSD stablecoin for trade clearing.

🧠 Ripple just made a swing for its stablecoin to be the one used in financial markets. Hidden Road clears $3 trillion annually. They'll now use Ripple's stablecoin RLUSD and XRP Ledger to settle trades

🧠 As real-world assets move on-chain, prime brokerage becomes the critical missing infrastructure. Why?

• Prime brokers provide access to multiple venues with a single account. They offer credit and leverage to increase capital efficiency. They handle settlement and custody across fragmented markets.

• Traditional prime brokers helped hedge funds navigate complex markets.

• Digital asset prime brokers will do the same for tokenized securities, real estate, and commodities.

Good Reads 📚

1. Jamie Dimon's Annual Letter

Key Fintech highlights:

• $225 cost per year per checking account. $150, which is branches, people, and onboarding.

• Makes $275 per account from net interest and $100 from fees. However "low balance" accounts are unprofitable

• Doesn't like retailers complaining about interchange fees while adding BNPL (which costs more)

• Lost $500m to fraud last year. Prevented $12bn of scams, but scams are a societal issue we need to work together on

• Says third parties should pay for data access (such as open finance)

• The USA has to adapt to "win" a global economic war, but it can't win that war alone.

• The largest risk JPMC faces is geopolitical risk (that feels like a new term for a compliance officers spreadsheet).

• JPMC's numbers are still the best in the business

• Improving regulation should remove litigation, creating a rising tide scenario

🧠 Chase's branch strategy is working, but those unit economics are tight. It really shows the benefit of having a lower-cost distribution like mobile.

🧠 The scamdemic is real. Jamie sees it. Everyone sees it. But are you coming to join us in SF in August to do something about it?

🧠 I agree banks should get paid for open finance data. This is my hot take and I'm sticking with it.

2. Blackrock's Annual Letter

My highlights:

• I love this line "Capitalism did work—just for too few people." The solution is to push down costs to access, and widen the aperture of private assets available to consumers.

• Infrastructure like data centers, ports and power grids are the next major asset class for growth

• The future standard portfolio may look more like 50/30/20—stocks, bonds, and private assets like real estate, infrastructure, and private credit.

• 62% of Gen X have saved less than $150,000. Private assets could add 14.% percent to portfolios but aren't available in most 401ks

• "Every stock, every bond, every fund—every asset—can be tokenized. If they are, it will revolutionize investing" It can democrotize access by reducing costs.

• The key gap is identity and verification at the last mile.

🧠 This is a manifesto for a new generation of wealth managers and brokerages. Build better KYC and services on tokenized assets. Lead with 401ks that have private credit.

Tweets of the week 🕊

That's all, folks. 👋

Remember, if you're enjoying this content, please do tell all your fintech friends to check it out and hit the subscribe button :)

Want more? I also run the Tokenized podcast and newsletter.

(1) All content and views expressed here are the authors' personal opinions and do not reflect the views of any of their employers or employees.

(2) All companies or assets mentioned by the author in which the author has a personal and/or financial interest are denoted with a *. None of the above constitutes investment advice, and you should seek independent advice before making any investment decisions.

(3) Any companies mentioned are top of mind and used for illustrative purposes only.

(4) A team of researchers has not rigorously fact-checked this. Please don't take it as gospel—strong opinions weakly held

(5) Citations may be missing, and I've done my best to cite, but I will always aim to update and correct the live version where possible. If I cited you and got the referencing wrong, please reach out