Kavanaugh confirmation suffers a new setback after 2nd assualt claim: Politico
US and China impose new round of trade tariffs today: CNBC
UK’s May under growing pressure to abandon Chequers Brexit plan: Guardian
Iran warns US and Israel of revenge after attack on military parade: Reuters
OPEC and allies struggle to replace Iran’s falling oil supply: Reuters
Brent oil at 4-year high after OPEC punts on raising output: Bloomberg
Does US-China trade war put US tech and telecom leadership at risk? NY Times
US Composite Output Index: growth slips to 17-mo low is September: IHS Markit

● Fighting Financial Crises: Learning from the Past
By Gary B. Gorton and Ellis W. Tallman
Summary via publisher (University of Chicago Press)
If you’ve got some money in the bank, chances are you’ve never seriously worried about not being able to withdraw it. But there was a time in the United States, an era that ended just over a hundred years ago, in which bank customers had to pay close attention to whether the banking system would remain solvent, knowing they might have to rush to retrieve their savings before the bank collapsed. During the National Banking Era (1863–1913), before the establishment of the Federal Reserve, widespread banking panics were indeed rather common. Yet these pre-Fed banking panics, as Gary B. Gorton and Ellis W. Tallman show, bear striking similarities to our recent financial crisis. In both cases, something happened to make depositors—whether individual customers or corporate investors—“act differently” and find reason to question the value of their bank debt.
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Hedging With Volatility
Mario Alagoa (Sacred Heart University)
May 9, 2018
A risk-averse investor with a long equity position is presumably interested in identifying a hedging strategy that protects the value of that investment. The common approach encompasses using either financial derivatives or holding assets (such as gold or Swiss francs) as portfolio hedges as they show negative correlation with equities. This paper proposes using volatility indexes as portfolio hedges instead; it shows that a volatility-based dynamic hedging strategy is the most effective at protecting the value of an equity investment.
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US imposes sanctions on China for buying Russian military equipment: Reuters
European Council president: UK’s Brexit plan “will not work”: BBC
Fed Chairman Powell talks to Congress re: the central bank’s independence: CNBC
Existing home sales in US unchanged in August: Reuters
Leading indicators for US signaling continued economic expansion: CB
US stock market indexes — Dow & S&P 500 — close at record highs: LA Times
US jobless claims slip to 49-year low, partly due to Hurricane Florence: MW
Philly Fed Mfg Index rebounds in September following sharp fall in August: MW
US 10yr/German 10-year yield spread at record high: 2.60 percentage points:

US economic growth remains strong, based on data published to date, but today’s business-cycle profile continues to suggest that we’ve seen the peak. Recession risk remains low and near-term projections point to more of the same. The question is whether there’s trouble brewing for 2019?
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US prepared to resume denuclearization talks with North Korea: Reuters
Polls continue to give Dems edge for taking back House in Nov: RCP
China set to cut average trade tariffs for most of its partners: Bloomberg
Will China retaliate in trade war by selling its massive Treasury holdings? NY Post
The paradoxical US economy: low wages and low unemployment: The Atlantic
JP Morgan’s Dimon: cyber warfare is biggest risk to the financial system: CNBC
2-year Treasury yield returns to 2008 highs: CNBC
US housing starts: 1yr change rebounded in Aug as trend for building permits fell:

Ahead of revisions to the US equity sector landscape in a few days, the existing definitions show that consumer discretionary, technology, and health care shares continue to lead this year, based on a set of exchange-traded funds. The upcoming reshuffling may reorder the horse race, but for now these three sectors are the dominant year-to-date performers through yesterday’s close (Sep. 18). Meanwhile, shares that comprise the so-called consumer staples sector are in the red year to date, posting the second-worst performance for the major sectors.
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Kavanaugh accuser asks for FBI investigation before she’ll testify: Reuters
Chinese premier: gov’t facing ‘greater difficulties’ in keeping economy stable: CNBC
China’s options dwindling for responding to Trump’s trade war: NY Times
Is China’s plunge-protection Team set to prop up falling stock market? Bloomberg
China’s holdings of US Treasuries fell to 6-month low in July: Bloomberg
North and South Korea agree to fostering “era of no war”: CNN
British inflation jumped unexpectedly to a six-month high in August Reuters
Soybean prices slumped to a decade-low on Tuesday: Business Insider
US homebuilder sentiment holds steady in Sep, signaling high confidence: MND
Policy sensitive 2-year Treasury yield edges up to 2.81%, a post-recession high:

The Federal Reserve remains on track for another round of tightening monetary policy at next week’s FOMC meeting, based on a several indicators. If the central bank announces another rate hike, it’ll mark the eighth increase since the Fed began squeezing policy post-recession in December 2015.
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Trump OKs more trade tariffs on China: Reuters
Flooding in Carolinas after hurricane to linger for days… or weeks? USA Today
N. Korea’s Kim hopes for “big outcome” for summit with S. Korea’s Moon: Reuters
Russia blames Israel for military plane shot down near Syria: BBC
Supreme Court nominee vote delayed; accuser to testify on Monday: The Hill
Senate leader works to save Kavanaugh as Supreme Court nominee: Politico
US to cut number of refugees to 30,000 next year: BBC
WEF report: robotics and AI will create net job growth by 2022: Gizmodo
Alibaba’s Jack Ma: US-China trade war could last 20 years: Bloomberg
Will trade tariffs save US factories? History leaves room for doubt: NY Times
NY Fed Mfg Index fell to 5-month low but still signaling solid growth: NY Fed