Succinct Summation of Week’s Events for 9.28.18 (plus social media & a mini-course on the Fed)

Below please find the usual weekly summation.  On the plus side is a considerable rise in durable goods orders and consumer confidence beating expectations.  On the minus side Tesla's CEO is accused of fraud for creating the story of taking his company private and, whether the author intended tongue-in-cheek or not, "The Decline of Western Civilization continues apace."  This Sunday night I'm providing two rather revealing bonuses from Barry Ritholtz's postings this weekend.  

One is a very telling graphic about the impact of social media on our society.  The first part of the graph shows that among those who use social media, the majority find it untrustworthy.  The second part of the graph highlights a considerably more serious issue - that for those who believe in the voracity of social media, the very nature of that trust makes them distrust all other sources of media.  The second bonus is a 1 hr and 20 minute video in which a Wharton Business School professor lectures on the history of the Fed and the very critical issue of what money is, who gets to decide what money is, and who gets to decide who gets the money.  It looks like a very worthwhile mini-course on how the Fed functions within the economy.  It's been a wet and cool weekend but at least we're in for warmer temps soon.  

Succinct Summation of Week’s Events for 9.28.18

September 28, 2018 4:00pm by Barry Ritholtz

Succinct Summations for the week ending September 28th, 2018

Positives:

1. Durable goods orders rose 4.5% m/o/m, meeting the high range of expectations.
2. Same store sales rose 5.8% w/o/w, 0.4% higher than the previous 5.4% rise.
3. New home sales came in at 629k for August, meeting expectations.
4. Retail inventories rose 0.7% m/o/m, up from previous 0.4% increase; Wholesale inventories rose 0.8% w/o/w, beating the expected 0.2% rise.
5. MBA mortgage applications rose a seasonally adjusted 3.0% w/o/w, maintaining the y/o/y gain of 4.0%.
6. Consumer confidence report rose to 138.40 this month, beating expected 131.7.

Negatives:

1. Decline of Western Civilization continues apace.
2. Trade in goods came in at -75.8B for August, down from prior revised -72.2B.
3. Tesla CEO faces SEC challenge for “Funding Secured” nonsense;
4. Pending home sales index fell by 1.8% m/o/m, missing expectations.
5. Jobless claims rose 12k w/o/w, from a revised 202k to 214k.
6. PCE price index rose 0.1% m/o/m, missing the expected 0.2% increase.

Sun 9-30-18 Big Pic: 10 Sunday Reads - The Big Picture

Sun 9-30-18 Big Pic: MIB: Peter Conti-Brown, Financial Historian at Wharton - The Big Picture

MIB: Peter Conti-Brown, Financial Historian at Wharton

September 29, 2018 9:30am by Barry Ritholtz

This week, we speak with Peter Conti-Brown, a financial historian and legal scholar at the Wharton School of the University of Pennsylvania. Conti-Brown studies central banking, financial regulation and public finance, with a particular focus on the history and policies of the U.S. Federal Reserve System. He is the author of “The Power and Independence of the Federal Reserve.”

The issue of what is money — and who gets to decide — has been the central debate of the Federal reserve for its entire history. This also helps to explain why the Fed has attracted conspiracy theorists and bashers and other assorted crazies.

We also discuss the turmoil at Wells Fargo (WFC). Senior corporate management had created a terrible incentive system that had predictably disastrous results. Conti-Brown is encouraged by the new Wells chairwoman, former Federal Reserve governor Elizabeth Duke. He notes this is likely an inflection point, and suggests that the board is very serious about both changing their corporate culture at WFC as part of their turnaround plan.  

His favorite books are here, and our conversation transcript will be posted here shortly.

You can stream/download the full conversation, including the podcast extras on iTunes, Bloomberg, Overcast, and Stitcher. Our earlier podcasts can all be found at iTunes, Stitcher, Overcast, and Bloomberg.   

Next week, we speak with Howard Marks, founder and chairman, Oaktree Capital, author of the new book Mastering the Market Cycle: Getting the Odds on Your Side.