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EconVue Spotlight

Dear R. Hunter,

I'm just back from Los Angeles, where I participated in a panel

https://www.eventbrite.com/e/city-national-bank-trade-policy-forum-registration-45007994122

on international trade sponsored by City National Bank. I particularly
enjoyed the remarks by Ambassador Mickey Kantor, former Secretary of
Commerce and US Trade Representative, who has a unexpectedly wry sense
of humor for a tough negotiator. When his mobile phone rang on stage, he
joked that it was probably President Trump calling him to ask his advice
on NAFTA. And well he should, since Mr Kantor was the force behind US
negotiations on NAFTA and the WTO. Here is a PBS interview

https://youtu.be/maQqlVH5eTo

on his legacy. Ray Suarez's questions in 2011 now seem astonishingly
prescient about the forces that created the Trump era.

In June of 1993, the White House invited a group of Chicagoans (I was
then head of Women in International Trade) to learn about NAFTA. Hillary
Clinton spoke to our group to help build support in the hinterlands.
This reminded me of her original close connection

http://www.politifact.com/truth-o-meter/statements/2016/jul/21/donald-trump/donald-trumps-largely-accurate-about-clintons-past/

to the agreement, perhaps one of the reasons for President Trump's
current anathema.

I thought we would be discussing China more than NAFTA but the news
about auto import investigations changed that . Actually the focus on
NAFTA for Californians shouldn't be surprising, given that Mexico and
Canada are the state's largest export destinations.

https://beaconecon.com/products/trade_report

California is a country; its GDP is about equal to that of Canada and
Mexico combined.

What I learned from my fellow panelists is that if the US does nothing,
NAFTA as it is today will stand. The problem is that even its proponents
agree that drastic updating of the agreement is needed. Our panel was
divided on whether or not the US would move forward, remain in neutral
or withdraw. I'm going to agree with Mr Kantor, who thinks that in the
end, business voices will be heard and negotiations will succeed. A
possible wildcard is the Mexican presidential election on July 1st. If
as seems likely Andrés Manuel López Obrador (the Trump of Mexico) wins,
all bets are off.

https://www.forbes.com/sites/kenroberts/2018/04/27/on-nafta-mexicos-lopez-obrador-is-moving-into-the-drivers-seat/#640600ab24e7

Despite all the amputations

https://www.google.com/search?q=desite+all+the+amputations&ie=UTF-8&oe=UTF-8&hl=en-us&client=safari

, I am hopeful that US trade will be allright. There is no doubt however
that we will be rocking & rolling for some time.

Happy Memorial Day to all, as we remember those no longer near, but
always dear to us.

RESEARCH BY ECONVUE EXPERTS

Rising Risks Haunt Financial Markets

https://econvue.com/pulse/rising-risks-haunt-financial-markets

Karim Pakravan

https://econvue.com/experts/karim-pakravan

The catalog of risks, both geopolitical and financial, has lengthened,
as existing issues worsen and new sources of concern arise. Left
unresolved, financial market turmoil could lead to negative concerns for
the global economy.

Trump Lags behind His Predecessors on Economic Growth

https://www.econvue.com/pulse/trump-lags-behind-his-predecessors-economic-growth

Robert Shapiro

https://www.econvue.com/experts/robert-shapiro

Donald Trump has repeatedly claimed that his economic record as
president is the best in generations. So I measured his record so far on
growth and business investment with the records of his nine predecessors
since JFK over comparable periods, starting with their third quarters in
office. Brookings issued my results: Trump beats the four who faced
recessions in their first year in office. Among the other five who took
office during expansions, as he did, Trump is tied in last place. Data
Round-Up: Real Equipment Spending Likely to 'Pause' in 18Q2 -- Up Less
than +2%

https://econvue.com/reports/michael-lewis/data-round-real-equipment-spending-likely-pause-18q2-less-2

Michael Lewis

https://econvue.com/experts/michael-lewis

Based on today's April data, and factoring in the likely drag from
aircraft & vehicles, FMI is tracking only a modest gain in real
equipment spending for 18Q2, +1% or so; this amounts to just a pause
after the near +9% average gain over the prior year. With the tax
cuts/accelerated depreciation only beginning to be felt, we continue to
forecast a healthy equipment gain in the second half of the year.

Superhero Healthcare ( Part 1

https://www.econvue.com/pulse/superhero-healthcare-part-1-liberating-americas-caregivers-and-patients

& Part 2

https://www.econvue.com/pulse/superhero-healthcare-part-2-already-here-growing-fast-payment-driven

)

https://www.econvue.com/pulse/superhero-healthcare-part-1-liberating-americas-caregivers-and-patients

David W. Johnson

https://www.econvue.com/experts/david-w-johnson

Heathcare economist David Johnson's two part report on how America's
Gotham healthcare system can turn into superhero healthcare. Part I of
Superhero Healthcare

https://4sighthealth.us10.list-manage.com/track/click?u=8a4bf5d1617f86a90e5a909f0&id=2832972f17&e=eb4830bd66

identified several bright spots within American healthcare where
liberated caregivers deliver appropriate, efficient care to engaged
patients; where the interests of health companies and their customers
align; and where compassion, empathy and shared decision-making govern
medical treatment. Part 2 of Superhero Healthcare

https://www.econvue.com/pulse/superhero-healthcare-part-2-already-here-growing-fast-payment-driven

explores how and the extent to which full-risk contracting is the
disruptive force transforming healthcare delivery.

STORIES IN OUR SPOTLIGHT

World

Mexico's Pena Nieto 'optimistic' on NAFTA as country makes new offer

https://www.reuters.com/article/us-trade-nafta-mexico/mexicos-pena-nieto-optimistic-on-nafta-as-country-makes-new-offer-idUSKCN1IQ01Y

Daina Beth Solomon & David Lawder 5/24/2018 Reuters

Mexico's President Pena Nieto 'optimistic' on NAFTA as country makes new
offer--but will the Mexican presidential election on July 1st throw a
spanner into the works? Not much time left.

World Bank Group's Pandemic Emergency Financing Facility (PEF) makes
first $12 million commitment to bridge financing gap for Ebola response
in DRC

http://www.worldbank.org/en/news/press-release/2018/05/22/world-bank-groups-pandemic-emergency-financing-facility-pef-makes-first-12-million-commitment-to-bridge-financing-gap-for-ebola-response-in-drc

5/22/2018 The World Bank

Innovative public-private insurance to stop epidemics being deployed to
fight Ebola.

Blocking 500 million users is easier than complying with Europe's new
rules

https://www.bloomberg.com/news/articles/2018-05-25/blocking-500-million-users-is-easier-than-complying-with-gdpr

http://country.eiu.com/article.aspx?articleid=626742246&Country=China&topic=Economy

Nate Lanxon 5/25/2018 Bloomberg

Is the cure that claims to enable privacy protection worse than the
disease? Will new EU regulations force thousands of foreign websites to
block access to EU nationals?

Higher oil prices + rising debt + USD appreciation test emerging markets

https://twitter.com/elerianm/status/996844139210653696

Mohamed A. El-Erian 5/16/2018 Twitter

Dollar-denominated debt is the issue. $11.2T of non-bank USD debt
worldwide, much of it unhedged, especially in emerging markets.

https://twitter.com/elerianm

How much should we trust the dictator's GDP estimates?

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3093296

Luis R. Martinez 12/27/2017 SSRN

GDP statistics are exaggerated by authoritarian regimes, based on
nighttime light comparisons, according to a University of Chicago
working paper.

U.S.

Report on the Economic Well-Being of U.S. Households in 2017

https://www.federalreserve.gov/newsevents/pressreleases/other20180522a.htm

5/22/2018 the Federal Reserve

40% of Americans do not have the resources to meet an unexpected $400
expense. We are an economically divided country.

Network Analytics from Hell: The Chaos of Post-Crisis Regulation

http://www.fedfin.com/images/stories/press_center/speeches/Karen%20Petrou%20Remarks%20Prepared%20for%20the%20Professional%20Risk%20Managers'%20International%20Association.pdf

Karen Shaw Petrou 5/22/2018 Remarks Prepared for the Professional Risk
Managers' International Association

As this analysis advances, regulators should turn their attention from
regulation to resolution. Even now, it's far from certain if a big-bank
–let alone non-bank – failure could proceed without systemic crisis.

China

What the U.S.-China trade war means for workers on the ground

https://www.wsj.com/video/what-the-us-china-trade-war-means-for-workers-on-the-ground/A7690590-4180-4F6E-801D-844FBCE0E284.html

5/15/2018 Wall Street Journal Video

Worth watching to understand the human side- the winners and losers in
globalization.

Belt and Road Initiative Quarterly: Q2 2018

http://country.eiu.com/article.aspx?articleid=626742246&Country=China&topic=Economy

EIU 5/21/2018

Investment in China's One Belt One Road in one graph.

The whys and why nots of caving on ZTE

http://www.aei.org/publication/the-whys-and-why-nots-of-caving-on-zte/

Derek Scissors 5/16/2018 AEI

Sensible explanation of the ZTE turnaround. The company has already lost
$2B in revenue and is expected to be heavily fined.

FinTech

Bitcoin's fate? This cryptoasset manager sees two possible outcomes

http://fortune.com/2018/05/25/bitcoin-future-price-invest/?utm_source=twitter.com&utm_medium=social&utm_campaign=social-button-sharing

Robert Hackett 5/22/2018 Fortune

If you think digital currencies don't or won't have institutional
investor support, watch this terrific interview.

Reserve Bank of Zimbabwe bans cryptocurrency trading. Banks given 60
days to comply (full statement)

https://www.techzim.co.zw/2018/05/cryptocurrency-ban-full-statement-rbz/

Tech Zim 5/12/2018

Zimbabwe bans cryptocurrencies. Perhaps they should be embraced given
their inflation challenges. Venezuela also faces inflation and sanctions
and created their own cryptocurrency.

Chicago

Jack up property taxes for pensions, say three Chicago Fed economists

http://www.chicagobusiness.com/realestate/20180514/CRED0701/180519952

Dennis Rodkin 5/14/2018 Crain's Chicago Business

A 43% increase in property taxes would affect homeowners & renters.
Landlords would be forced to raise rents as well. We're already losing
people-why not call a constitutional convention to restructure pensions
now?

With all best wishes,


Lyric Hughes Hale

Editor-in-Chief

Econvue.com
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"What's Next? Unconventional Wisdom on the Future of the Global Economy"
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