Hi and welcome back to Monthly Macro. Unfortunately we missed September so this will be the September and October version. A lot of the same questions and concerns still exist, sometimes it feels like the news just repeats with updates on IPOs, tariffs and wars. So for this version we are going to do something different. 

The usual updates:

There are less headlines about an IPO rush but a notable IPO did happen. Klarna went public on the NYSE in mid September raising over $1.1 billion, and it is now valued at almost $14 billion. As a former CFPBer, I am still skeptical of BNPL. My main question is what are you buying and is it really necessary if you can’t pay in full?

Klarna stock price (WSJ)

However, I’ve since moved to Israel and here pretty much anything you buy on your credit card can be split into multiple payments. Seemingly just for consumer ease, but maybe it is also because Israeli salaries are a fraction of American salaries. So either I am too apprehensive about the benefits of BNPL, or there could be future headlines of a BNPL bubble.

There is still a tariff war happening!

Trump has imposed 100% tariffs on Chinese imports to begin in November. There have been new export controls of software and hardware. This has implications for supply-chain costs for fintechs, especially AI-focused firms, as costs will rise. It is interesting that the national security and economic growth arguments are usually on opposite sides.

Export controls of US technology are meant for national security but they slow down economic growth, and maybe also stagnate innovation. If we are a secure but slow nation is that better? What is the cost of national security? Is the nation secure if we are technologically behind our competitors? 

Now three news stories:

1. A very long government shutdown