• President Donald Trump, who is depending on a strong economy to help him win the 2020 presidential race, has heard mixed commentary on the subject from business leaders and financial executives about the economy, according to two people familiar with the matter. Trump has told some confidants that he doesn’t believe statistics reported in the press and also thinks forecasters are giving biased data in an attempt to hurt his re-election, said one Republican close to the administration. (The Washington Post)

• Wells Fargo & Co. has fielded complaints from consumers and its own debt-collection department concerning overdraft fees for accounts consumers believe to be closed, including one case where debt collectors took in an estimated $100,000 in overdraft fees in eight months. Supposedly closed accounts can stay open if they have an open balance, including ones with a negative balance, and continue racking up overdraft fees, the bank said. (The New York Times) 

• Capital One Financial Corp. employees flagged high turnover in the bank’s cybersecurity unit and a failure to quickly install software designed to find and counter hacks before the bank’s giant data breach, according to people familiar with the matter. About a third of the bank’s cybersecurity employees left in 2018, according to some of the people. (The Wall Street Journal) 

Any Economic Downturn Could Scramble Trump’s 2020 Strategy
Andrew Restuccia and Rebecca Ballhaus, The Wall Street Journal

President Trump has made the strong economy the central selling point of his presidency, and his advisers believe it is the key to winning a second term. But this week’s damaging economic developments—resulting in fresh warnings of a possible impending recession—threaten to complicate that message 14 months before the election.

Trump Urges Xi to Meet With Hong Kong Protesters
Andrew Restuccia, The Wall Street Journal

President Trump urged Chinese President Xi Jinping on Thursday to meet with Hong Kong protesters, arguing such a move would help end the crisis roiling the region. Mr. Trump tweeted: “If President Xi would meet directly and personally with the protesters, there would be a happy and enlightened ending to the Hong Kong problem. I have no doubt!”

Economic Trouble Signs Hang Over Trump’s Trade War
Jim Tankersley et al., The New York Times

Against the backdrop of mounting evidence that the global economy is weakening, President Trump is caught between his desire to pursue the trade war with China he promised to win and his need to keep the economy humming as the 2020 election approaches. That conflict explains some of the messaging from Mr. Trump in public and on social media in recent days as market gyrations undermine the confidence of investors.

Donald Trump takes emollient tone on China trade war
James Politi, Financial Times

US president expects phone call with Xi Jinping ‘soon.’

Powell Expected to Seek Another Cut Despite Strong Spending
Steve Matthews, Bloomberg

The U.S. data pouring in supports Federal Reserve Chairman Jerome Powell’s forecast of solid economic growth and higher inflation. Still, economists remain confident that Powell will cut interest rates again next month as insurance against a global slowdown.

Fed’s Bullard Says U.S. Economy Is Sound Despite Trade Uncertainty
Paul Kiernan, The Wall Street Journal

Federal Reserve Bank of St. Louis President James Bullard said Thursday the trade war between the U.S. and China is fueling uncertainty about the economic outlook but stressed that the domestic economy appears to be on sound footing. Mr. Bullard also played down the rout Wednesday in U.S. equity markets, noting that stock prices might be more affected by trade-related uncertainty than American consumers.

Trump accuses news media of trying to crash the economy
Caitlin Oprysko, Politico

President Donald Trump on Thursday baselessly accused the press of trying to tank the American economy, shrugging off any blame for a prospective economic slowdown and possible recession heading into his reelection next year. “The Fake News Media is doing everything they can to crash the economy because they think that will be bad for me and my re-election,” he said in a tweet.

U.S. Futures Rise to End Volatile Week; Bonds Fall: Markets Wrap
Yakob Peterseil, Bloomberg

U.S. equity futures climbed with European stocks and most Asian shares posted modest gains, as a tumultuous week of trade uncertainty and fears over global growth drew to a close. Treasuries pared some of Thursday’s advance.

New York Subpoenas Banks and Financial Advisers for Sackler Records
Roni Caryn Rabin, The New York Times

The New York state attorney general has begun issuing subpoenas to 33 financial institutions and investment advisers with ties to the Sackler family, part of an aggressive effort to track billions of dollars that prosecutors claim the family siphoned out of Purdue Pharma to hide profits gained from the company’s opioid painkillers. The recipients of the subpoenas ranged from major Wall Street firms to obscure offshore holding companies as well as two family investment offices and four individual advisers, according to court documents.

Deutsche Bank adds ex-UBS executive Jürg Zeltner to board
Stephen Morris, Financial Times

Troubled lender has embarked on a radical overhaul to reduce its reliance on trading.

Harry Markopolos says he can’t reveal the hedge fund he’s working for in his investigation of GE
Kate Rooney, CNBC

Madoff whistleblower Harry Markopolos is probing GE on behalf of a hedge fund — but he won’t say which one. “I can’t — I promised confidentiality,” Markopolos told CNBC’s “Squawk on the Street ” Thursday.

London Exchange Is Delayed by Technical Problem
Amie Tsang, The New York Times

The opening of markets in London was delayed on Friday as the London Stock Exchange struggled with a technical issue, a representative of the exchange said. Trading, which should have started at 8 a.m., was pushed until 9:40 a.m. as the exchange tried to determine the cause of the problem. The company said that it could not provide a comprehensive list of securities that were affected, but that trading was affected on the FTSE 100 and the FTSE 250, as well as some other securities.

Hedge Fund Seeking to Void Illinois Debt Made Wager on Default
Martin Z. Braun and Shruti Singh, Bloomberg

Warlander Asset Management, the hedge fund seeking to invalidate $14.3 billion of Illinois bonds, bought derivatives that will pay off if the state defaults on the debt. An attorney for Warlander’s co-plaintiff, John Tillman, the chief executive officer of the Illinois Policy Institute, disclosed the firm’s derivative wager at a hearing in Springfield on Thursday. 

Lender risk from CFPB underwriting rule tested in Ohio case
Kate Berry, American Banker

Lenders have long worried that borrowers would use the Consumer Financial Protection Bureau’s mortgage underwriting rule to fight foreclosure in court. But the outcome of the first known legal attempt may discourage others from trying.

FHA revises proposed mortgage lender certification
Brad Finkelstein, American Banker

The Federal Housing Administration updated its lender certification proposal originally issued this past May, as it looks to ease industry concerns on False Claims Act enforcement. The revisions were posted in the Federal Register on Aug. 14 for a new 30-day comment period.

Is a recession coming? Here’s what that means for housing
Patrick Sisson, Curbed

A bevy of negative news this week has once again stoked fear that an economic downturn is imminent. Yesterday, the Dow Jones Industrial Average had its worst day of the year with an 800-point dive. Then, news broke that the bond yield curve has inverted, a sign that the market believes investing in the short-term is more risky than investing in the long-term, which economists have identified as a consistent signifier of a future recession. 

Mortgage rates level off at multiyear lows as investors stay away from mortgage-backed securities
Kathy Orton, The Washington Post

A strong demand for bonds typically sends mortgage rates lower. But this week, rates were stable. According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average was unchanged at 3.60 percent with an average 0.5 point.

Study: IRS funding cuts lead to billions in lost corporate tax revenue
Naomi Jagoda, The Hill

The IRS could have brought in billions of dollars more in corporate tax revenue if it had a bigger budget, according to a new study. “You may save a little by cutting the IRS budget, but you are losing more in tax revenues,” said Casey Schwab, a professor at Indiana University’s Kelley School of Business.

Julián Castro would boost taxes on wealthy to expand family programs
Toby Eckert, Politico 

Democratic presidential candidate Julián Castro today rolled out a plan to boost taxes on the wealthy and expand or create a host of federal programs for low- and middle-income families, including universal child care, paid family leave and a $15-per-hour minimum wage. The Republicans’ 2017 tax overhaul, which sharply cut taxes for individuals and corporations, would be repealed under Castro’s proposal.

Apple, EU Set for September Showdown Over Record Tax Bill
Stephanie Bodoni, Bloomberg

Apple Inc.’s 13 billion-euro ($14.4 billion) battle with the European Union reaches the bloc’s courts next month in a hearing set to throw the spotlight on antitrust commissioner Margrethe Vestager’s crackdown on tax deals doled out to big companies. The EU’s General Court, its second-highest tribunal, will hear arguments in the challenges by the iPhone maker and Ireland over two days set for Sept. 17-18. The U.S. last year lost a bid to intervene in the case in support of Apple.

How AI will change the way you manage your money
James Pickford and Lucy Warwick-Ching, Financial Times

Data science is increasingly being used to compare products, find deals and give tailored guidance.

IRS Sends Second Round Tax Warnings to Cryptocurrency Investors
Lynnley Browning, Bloomberg

Some cryptocurrency investors are receiving a new round of letters from the Internal Revenue Service telling them that their federal tax returns don’t match the information received from virtual currency exchanges, a new front in the agency’s burgeoning scrutiny of the industry. The letters acknowledge that trading exchanges, not the taxpayers, may have made the errors.

Congress Must Fix Harbor Maintenance Tax to Keep Mississippi River an Export Leader
Paul Aucoin, Morning Consult

For the past few weeks and months, much of the nation has experienced record-setting rainfall and, at one point, there were even concerns of levies on the Mississippi River being topped around New Orleans. Thankfully, this did not happen.

Central Bankers in Glass Houses
Charles W. Calomiris, The Wall Street Journal

What to make of the current battle over the politicization of the Federal Reserve? The past year has featured an unprecedented attack by President Trump on Fed leaders and their independence.

Silicon Valley is eating the banks’ lunch
Tom Braithwaite, Financial Times

Assailed by Apple Card and Revolut, traditional lenders risk having their Kodak moment.

The Changing Structure of American Innovation: Some Cautionary Remarks for Economic Growth
Ashish Arora et al. The National Bureau of Economic Research

A defining feature of modern economic growth is the systematic application of science to advance technology. However, despite sustained progress in scientific knowledge, recent productivity growth in the U.S. has been disappointing.