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EconVue Spotlight

Dear R. Hunter,

A hat tip to EconVue contributor Nicholas Benes

https://econvue.com/experts/nicholas-benes

for one of our favorite articles this week, on the "quiet life." The
thesis of this Harvard Business Review

https://hbr.org/2018/01/the-quiet-life-hypothesis-is-real-managers-will-put-off-hard-decisions-if-they-can

study is that managers are likely to put off hard decisions, preferring
the "quiet life" to confrontation and change in the absence of
competition. As our New Year's resolutions fade away, worth keeping in
mind! As promised, you will find the full forecasts of several EconVue
experts that were summarized in our forecasting issue earlier this
month. I've also included some papers from the event that opens the year
for academic economists, the American Economics Association annual
meeting. Held the first weekend in January, sadly in snowbound
Philadelphia, key themes were the lack of opportunity for female
economists, and of course productivity. One subject was significant by
its omission- out of hundreds of papers and sessions, only a single
panel on Fintech, and nothing on cryptocurrencies. Through a Twitter
exchange I found out that Trinity Prof. Gina Pieters did submit a paper
that was not selected for presentation. The list of academics working on
this issue fits on a single page, which Prof. Pieters has kindly
compiled here: http://www.ginapieters.com/crypto-academics.html

http://www.ginapieters.com/crypto-academics.html

In a world bereft of volatility, I find this subject fascinating. Market
capitalizations are exaggerated: they are based upon the total number of
coins outstanding multiplied by the most recent price. In these
thinly-traded markets, a single transaction can change prices. However,
cryptocurrencies are beginning to affect the real economy. It is
estimated that bitcoin is now .3% of Japan's GDP. For a discussion about
crypto as an asset class, the article below by economics professor
Lawrence White about how it is and is not like gold is illuminating.

RESEARCH BY ECONVUE EXPERTS 5 Days that Shook the Healthcare World

https://econvue.com/pulse/5-days-shook-healthcare-world

David Johnson

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

In early December, a series of blockbuster transaction announcements
rocked the healthcare industry. Major healthcare payers, providers and
retailers signaled their intention to reconfigure business models to
compete effectively in the post-reform marketplace. Their common mantra
is that status-quo operations are insufficient to meet customer demands
for higher-value healthcare services. It's not enough to get bigger,
health companies must also become better. American healthcare may never
be the same. China on the Rebound

https://econvue.com/pulse/china-rebound

Karim Pakravan

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

China's more robust foreign position comes at a time when President Xi
Jinping is taking a much bolder stance in promoting China as the "other"
superpower. Furthermore, with the United States under President Trump is
retreating from its global leadership role, China is positioning itself
as the guardian of a multilateral-based world order. Data Round-Up: Real
Consumption Likely Grew a Solid +3.75% in 17Q4

https://econvue.com/reports/michael-lewis/data-round-real-consumption-likely-grew-solid-375-17q4

Michael Lewis

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

Upward revisions saved the holidays. Even with so-so December sales and
a rebound in goods inflation to more than +2% annualized in 17Q4 (mostly
gasoline prices, despite a turn down at the pumps in December), real
consumption likely grew +3.75% in 17Q4, more than a percent above the
17Q1-Q3 pace. Note, tax reform bonuses being issued by firms should
boost early 2018 spending, though history indicates consumers will bank
much of their windfall. Chicago Rising

https://econvue.com/pulse/chicago-rising

Collin Canright

https://econvue.com/experts/collin-canright

Chicago's FinTech development and investment reputation has been on the
rise, and we're expecting big things in this city for 2018. Crain's
Chicago Business suggests that Google is planning

https://fintechrising.us9.list-manage.com/track/click?u=82c52a0b53a861a1cc8630ad0&id=c963e439e4&e=be64b04a10

a major new center here, while city officials remain hopeful that it
will make the first cut for Amazon's HQ2.

Data Round-Up: Labor Markets Still Look Very Healthy, Will Tighten
Further in 2018

https://econvue.com/reports/michael-lewis/data-round-labor-markets-still-look-very-healthy-will-tighten-further-2018

Michael Lewis

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

The December jobs report marked a fairly tepid end for the year.
Nonetheless, trends point to the labor markets tightening further in
2018. The FOMC has already decided, we believe, to pause in January,
Yellen's final meeting. By March, with Powell at the helm, labor market
and other data should easily justify the next rate hike.

Confronting Complex Multidimensional Security Challenges in Trinidad and
Tobago

https://econvue.com/pulse/confronting-complex-multidimensional-security-challenges-trinidao-and-tobago

R. Evan Ellis

https://econvue.com/experts/r-evan-ellis

Dr. Ellis' latest report on security challenges facing Trinidad and
Tobago, two small and relatively unknown nations which have significant
strategic importance from the perspective of the United States and the
Western Hemisphere.

2018 ECONVUE PREDICTIONS

https://econvue.com/pulse/econvue-spotlight-econvue-predictions

Highlights of the more non-intuitive analysis of our experts

https://www.econvue.com/experts

on their forecasts for 2018.

The Year in FinTech 2017 to 2018

https://econvue.com/pulse/year-fintech-2017-2018

Collin Canright

https://econvue.com/experts/collin-canright

FMI January 2018 Economic & Investment Outlook

https://econvue.com/reports/michael-lewis/fmi-january-2018-economic-investment-outlook

Michael Lewis

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

The Year of the Dictators

https://econvue.com/pulse/year-dictators

Robert Madsen

https://econvue.com/experts/robert-madsen

The Key Challenge and Issue for the United States in 2018 is Donald
Trump

https://econvue.com/pulse/key-challenge-and-issue-united-states-2018-donald-trump

Robert Shapiro

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

2018 Global Outlook

https://econvue.com/pulse/2018-global-outlook

Nikolai Tagarov

https://econvue.com/experts/nikolai-tagarov

Whither the US in 2018? US and the Americas and Globally

https://econvue.com/pulse/whither-us-2018-us-and-americas-and-globally

Marsha Vande Berg

https://econvue.com/experts/marsha-vande-berg

STORIES IN OUR SPOTLIGHT Productivity & Labor The "Quiet Life"
Hypothesis Is Real: Managers Will Put Off Hard Decisions If They Can

https://hbr.org/2018/01/the-quiet-life-hypothesis-is-real-managers-will-put-off-hard-decisions-if-they-can

Kotaro Inoue 1/9/2018 Harvard Business Review As our New Year's
resolutions fade away, an intriguing study just published in the Harvard
Business review. Managers, and people in general, are likely to put off
hard decisions and hard work, preferring the "quiet life." Competition
is the cure. Automation and Jobs: When technology boosts employment

https://t.co/C6KdlhjD8q

James Bessen November 2017 Boston University School of Law A
thought-provoking paper from the American Economics Assoc meeting in
Philadelphia this weekend. Does productivity have and an end game in
terms of jobs, and are we there yet? How Widespread Is Labor Monopsony?
Some New Results Suggest It's Pervasive.

http://rooseveltinstitute.org/how-widespread-labor-monopsony-some-new-results-suggest-its-pervasive/

Marshall Steinbaum 12/18/2017 Roosevelt Institute

Or do large firms offer non-wage benefits that employees take into
account on a rational rather than coercive basis? Illinois Saw Net Loss
of 101,000 People to Neighboring States Since 2010

https://www.illinoispolicy.org/irs-illinois-saw-net-loss-of-101000-people-to-neighboring-states-since-2010/

Vincent Caruso 1/10/2018 Illinoispolicy.org Since this outflow number is
only for neighboring states, in effect metro Chicago, it clearly
demonstrates the effects of laws and policy on residential choice.
Neighboring towns in Indiana and Wisconsin don't have different
climates, or a significantly different economic base. Fintech Bitcoin
could be adding 0.3% to Japanese GDP

http://www.businessinsider.com/bitcoin-could-be-adding-03-to-japanese-gdp-2017-12?r=UK&IR=T

Jim Edwards 1/1/2018 Business Insider

Cryptocurrencies are beginning to have an effect on the real economy.
One Bank Is Unsure If Any Humans Still Trade Stocks In Japan, Or Have
All Moved To Bitcoin

https://www.zerohedge.com/news/2017-12-26/one-bank-unsure-if-any-humans-still-trade-stocks-japan-or-have-all-moved-bitcoin

Tyler Durden 12/26/2017 Zero Hedge 40% of cryptocurrency trading is
Yen-denominated. Are Japanese housewives driving bitcoin? How a Bitcoin
System is Like and Unlike a Gold Standard

https://www.alt-m.org/2018/01/11/how-a-bitcoin-system-is-like-and-unlike-a-gold-standard/

Larry White 1/11/2018 Alt-M.org Blockchains Use Massive Amounts of
Energy—But There's a Plan to Fix That

https://www.technologyreview.com/s/609480/bitcoin-uses-massive-amounts-of-energybut-theres-a-plan-to-fix-it/

Mike Orcutt 11/16/2017 MIT Technology Review

Terrific explanation of why mining for cryptocurrencies uses so much
energy, and what mining actually is. Here's the one currency worse for
the environment than bitcoin

https://www.marketwatch.com/story/at-last-a-comparison-where-bitcoin-comes-out-environmentally-friendlier-2017-12-06?mod=MW_story_latest_news&link=sfmw_tw

Steve Goldstein 12/7/2017 Market Watch

Yes, creating 1.2 million pennies is worse for the environment than
mining a bitcoin. 95 Crypto Theses for 2018

https://medium.com/@twobitidiot/95-crypto-theses-for-2018-ca7b74f8abcf

Ryan Selkis 1/2/2018 Medium

Great write up-a must read on cryptocurrencies. Beyond Price: Bitcoin's
impact on the future

https://www.youtube.com/watch?v=rvwVbRQ5Ysc&app=desktop

Andreas Antonopoulos 12/23/2017 YouTube Video PayPal only operates in 19
countries. Imagine an internet of money with no boundaries, and
companies like PayPal disintermediated: video with industry guru Andreas
Antonopoulos. ECB Official Calls for Tax on Bitcoin Transactions

https://www.coindesk.com/ecb-official-calls-for-tax-on-bitcoin-transactions/?utm_content=buffer2a497&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

Nikhilesh De 1/3/2018 Coin Desk Of course they did. The VERY simple bear
case for bitcoin

https://blog.goodaudience.com/the-very-simple-bear-case-for-bitcoin-7f3a5d2953ba

Savneet Singh, Tera Holdings 12/17/2017 Most Bitcoin Exchanges Start
Refusing New Investors

https://cryptona.co/bitcoin-exchanges-start-refusing-new-investors/

Timothy Olagoke 12/27/2017 Cryptona While bitcoin exchanges upgrade
their systems, they are refusing new customers. In 2018 they will create
more capacity to meet this demand. The Criminal Underworld Is Dropping
Bitcoin for Another Currency

https://www.bloomberg.com/news/articles/2018-01-02/criminal-underworld-is-dropping-bitcoin-for-another-currency

Olga Kharif 1/2/2018 Bloomberg Criminals are by definition
unintelligent. Bitcoin can't be and never has been hacked. World 18
Exponential Changes We Can Expect in the Year Ahead

https://www.technologyreview.com/s/609868/18-exponential-changes-we-can-expect-in-the-year-ahead/

Azeem Azhar 12/31/2017 MIT Technology Review

On annual forecasts-absolutely true that we overestimate what can happen
over one year, and underestimate what can be accomplished in ten. Self
driving electric cars for example won't be the norm in 2018, but by 2028
they will be ubiquitous. Interview with Anne Case

https://minneapolisfed.org/publications/the-region/interview-with-anne-case

Douglas Clement 12/12/2017 Federal Reserve Bank of Minneapolis

An extraordinary mind on why there are so few women in economics. Can
secular stagnation morph into secular expansion?

https://www.ft.com/content/38fbdf1a-678d-3c92-8df0-9ee5ba890fae

Avyn Davies 1/7/2018 Financial Times A slight uptick in productivity,
and signs are hopeful that the broad global expansion we are now
enjoying will continue in 2018. The known unknown-will rising interest
rates dampen growth? The Marxist Case for the Nintendo Switch

http://theweek.com/articles/747291/marxist-case-nintendo-switch

Ryan Cooper 1/9/2018 The Week Nintendo trusted their rational analysis
of their customer base rather than blindly trusting market outcomes —
and it paid off. US Consumer Credit

https://www.federalreserve.gov/releases/g19/current/default.htm

Federal Reserve 1/8/2018 In November, consumer credit increased at a
seasonally adjusted annual rate of 8-3/4 percent. Revolving credit
increased at an annual rate of 13-1/4 percent, while non-revolving
credit increased at an annual rate of 7-1/4 percent. Kicking the can
down the road...

America's ‘Retail Apocalypse' Is Really Just Beginning

https://www.bloomberg.com/graphics/2017-retail-debt/

Matt Townsend, Jenny Surane, Emma Orr, Christopher Cannon 11/8/2017
Bloomberg

Just $100 million of high-yield retail borrowings were set to mature in
2017, but that will increase to $1.9 billion in 2018. From 2012-2025, it
will balloon to an annual average of almost $5 billion. Consumer debt
rising, confidence falling. Neat results from Emi Nakamura. Why didn't
aggregate consumption-housing wealth elasticity change over fin. crisis?

https://twitter.com/1EquationShort/status/949632979650965504

Ethan Feilich @1EquationShort 1/6/2018

Recovery has been uneven. For households with underwater mortgages, it
is like driving with a flat tire down a road without a shoulder and no
off ramp. Asia China Is Heaping Debt on Its Least Productive Companies

https://www.cfr.org/blog/china-heaping-debt-its-least-productive-companies?sp_mid=55747132&sp_rid=YnN0ZWlsQGNmci5vcmcS1

Council on Foreign Relations 1/11/2018 Loans are given to unproductive
Chinese firms in lieu of of allowing the market to enforce needed
structural changes. This misallocation of capital could be more onerous
over the long run than the risk of rising debt. The global decline of
extreme poverty – was it only China?

https://ourworldindata.org/the-global-decline-of-extreme-poverty-was-it-only-china/

Max Roser 3/7/2017 Our World in Data In a word, no. The decline in
extreme poverty is worldwide. Rising Japan inflation: a possible shock

https://www.omfif.org/analysis/commentary/2018/january/rising-japan-inflation-a-possible-shock/

Akinari Horii 1/8/2018 In defense of the Philip's Curve by former Bank
of Japan official Akinari Horii, who says rising Japanese inflation
could surprise in 2018 due to labor constraints. But what about
automation? China's debt trap diplomacy

https://www.project-syndicate.org/commentary/china-one-belt-one-road-loans-debt-by-brahma-chellaney-2017-01/english?barrier=accessreg

Brahma Chellaney 1/23/2017 Project Syndicate Worth another read based on
recent events, in case you find any aspect of the China's One Belt One
Road initiative troubling. How people in Asia-Pacific view China

http://www.pewresearch.org/fact-tank/2017/10/16/how-people-in-asia-pacific-view-china/?utm_content=bufferc8525&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

Laura Silver 10/16/2017 Pew Research Center

I would like to see a similar poll for views on the US impact in Asia
for comparison purposes. These results will surprise the myriad of
commentators focused on the China is replacing the US story. USDX and
USDCNY

https://twitter.com/BaldingsWorld/status/950971656624750592

Comrade Balding 1/9/2018 @baldingsworld How anyone can claim that CNY is
not still effectively pegged to the USD is beyond me.

With all best wishes,


Lyric Hughes Hale

Editor-in-Chief

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