Subject: EconVue Spotlight September 16, 2017 | A New Era for Central Banks in 2018
From: "Lyric Hughes Hale" <[email-masked]>
To: "R. Hunter Biden" <[email-masked]>
Date: Sat, 16 Sep 2017 09:21:08 -0700 (PDT)

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EconVue Spotlight

Dear R. Hunter,

In spite of negative wage and manufacturing data, another North Korean 
missile launch, and Britain moving to its highest possible threat level, 
financial markets remain calm. Indeed, many forecasters remain 
optimistic about global growth. The Council on Foreign Relations hosted 
a back-to-school panel

https://www.cfr.org/event/world-economic-update-51

on the world economy this past week, and the mood was upbeat. But 
especially here in the Midwest, why aren't we feeling more exuberant? US 
equity markets have boomed since 2007, but since that period stock 
market participation has fallen from about 65% to 52%. That means that 
about half the population did not participate in this creation of new 
wealth totaling $15 trillion. For shareholder households, this means an 
average increase in wealth of $50,000 per person. Many blame both asset 
price inflation and the inexorable increase

https://infogram.com/income-inequality-1967-2016-1gv02gx1g4qlp1x

in US income inequality on the ultra-accommodative monetary policies of 
the Federal Reserve. Thursday evening the Chicago Financial Forum, an 
informal group of economists and investors who have met every month or 
so for more than thirty years, invited Karen Petrou of Federal Financial 
Analytics to share her views. She sounded a clear warning that although 
the Fed should be credited with avoiding disaster during the financial 
crisis, its policies persisted for too long at the expense of those who 
could least afford it. She says further that as the Fed Board changes 
its composition in early 2018, it could be faced with its biggest 
political crisis since its founding in 1913. Karen's remarks can be 
found here

http://www.fedfin.com/images/stories/press_center/speeches/Karen%20Petrou%20Remarks%20Prepared%20for%20Chicago%20Financial%20Forum.pdf

and should be at the top of your weekend reading list.

Other key issues discussed by our EconVue experts below include whether 
or not tax reform will become a reality before 2018, economic insecurity 
in Latin America, US banking regulation, corporate governance in Japan, 
and the economics of the fight against cancer. And as always, I've 
included a perhaps too-lengthy list of intriguing links to content from 
other sources.

Finally, this coming week President Trump will attend his first meeting 
of the UN General Assembly in New York, which you will be able to view 
here

http://www.pbs.org/newshour/updates/what-to-watch-in-trumps-first-meeting-with-the-u-n-general-assembly/

Many heads of state will be in town next week, and the Council on 
Foreign Relations will be livecasting their conversations with for 
example, Paul Kagame, President of Rwanda, Michelle Bachelet, President 
of Chile, Mohammad Ashraf Ghani, President of Afghanistan, and Shahid 
Khaqan Abbasi, Prime Minister of Pakistan, David Sanger of the New York 
Times presiding. This is a rare opportunity to watch these leaders up 
close, as they converse with experts in their field. No registration is 
required; here is the complete CFR schedule.

http://www.cfr.org/events

ECONVUE RESEARCH

Solid Chance for Major Tax Reforms by Year-End

http://www.econvue.com/reports/michael-lewis/solid-chance-major-tax-reforms-year-end

Michael Lewis

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

Though there are potential pitfalls, FMI believes there is a solid 
chance that a significant deal will be reached this year, even if it 
looks somewhat different from the proposals Trump and House Speaker Paul 
Ryan released during the campaign. The Three Choices for Tax Reform

http://www.econvue.com/pulse/three-choices-tax-reform

Robert Shapiro

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

Trump administration officials and GOP leaders in Congress are still 
putting together their tax plan. Nevertheless, the early signs point to 
decisions that could sink the project or produce changes that would 
jeopardize economic growth. Gangs, Guns, Drugs and Islamic Foreign 
Fighters: Security Challenges in Trinidad and Tobago

http://econvue.com/pulse/gangs-guns-drugs-and-islamic-foreign-fighters-security-challenges-trinidad-and-tobago

R. Evan Ellis

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

The strategic location of Trinidad and Tobago vis-à-vis Venezuela, the 
Caribbean, and regional oil reserves make the country of strategic 
importance to the United States. It is important that the U.S. not 
overlook the very serious problems occurring in its not-so-distant 
partner. China, Russia Increase Leverage in Venezuela Amid Crisis

http://www.econvue.com/pulse/china-russia-increase-leverage-venezuela-amid-crisis

R. Evan Ellis

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

The most important question regarding the unfolding crisis in Venezuela 
is not whether U.S. sanctions and international pressures will force its 
populist regime to restore democracy. That will not happen anytime soon. 
Rather, it is whether the Venezuelan regime will be able to successfully 
transition power to a more rationally managed authoritarian government, 
backed by Russian and Chinese resources, that protects those who have 
systematically looted the country, while providing a sufficient façade 
of democratic process and compromise that a weary and distracted 
international community lends it legitimacy. Breached

http://www.econvue.com/pulse/breached

Collin Canright

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

The Bank for International Settlements (BIS), often described as the 
central bank for central banks, recently published its take on FinTech. 
The BIS's Basel Committee on Banking Supervision's report, "Implications 
of fintech developments for banks and bank supervisors," handily 
summarizes the changing face of banking. Making American Banks Great 
Again?

http://econvue.com/pulse/making-american-banks-great-again

Karim&nbsp;Pakravan

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

Janet Yellen, as well as Mario Draghi, the president of the European 
Central Bank, have stressed two points. First, there is little evidence 
that tougher bank regulations have caused some slowdown in credit 
growth. Second, even if there was some slowdown in credit growth, it is 
preferable to the financial system seizure that we experienced in 
2008.Finally, Yellen warned against fading memories of the 2008 
disaster.While banks are better capitalized than ever, regulators must 
remain vigilant and have the tools to prevent/mitigate another financial 
crisis. Company Law Reform in Japan: Losing its Mojo?

http://econvue.com/pulse/company-law-reform-japan-losing-its-mojo

Nicholas Benes

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

This year, Japan's governance reform drive will either keep going, or 
run out of steam. Judging from the amendment of the Company Law that is 
now underway by an advisory council of the Ministry of Justice (MOJ), 
the latter is likely. Battling Cancer: Partnering to Make Headway 
Against Medicine's Toughest Foe

http://www.econvue.com/pulse/battling-cancer-partnering-make-headway-against-medicine%E2%80%99s-toughest-foe

David Johnson

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

Almost 40% of Americans will receive a cancer diagnosis during their 
lifetime. Most cancers are chronic conditions that manifest as people 
age. Once it strikes, treating cancer is expensive, iterative, 
prolonged, multi-faceted and unpredictable. Organizing and delivering 
effective cancer care at the community level offers the greatest 
near-term benefit for extending and enhancing patients' lives. As with 
all chronic diseases, meaningful progress against cancer combines 
evidenced-based treatments with coordinated patient-centric delivery. 
This requires logistical, technological and organizational expertise.

STORIES IN OUR SPOTLIGHT

U.S.

A New Way to Learn Economics

https://www.newyorker.com/news/john-cassidy/a-new-way-to-learn-economics

John Cassidy 9/11/2017 New Yorker Fed told public spending can lift 
ailing economies 

https://www.ft.com/content/caa85a3e-8a85-11e7-9084-d0c17942ba93

Sam Fleming 8/ 26/2017 FT Since monetary policy has nowhere to go, time 
to try extreme fiscal policy? Decline in Labor-Force Participation Not 
Due to Disability Programs

https://www.cbpp.org/blog/decline-in-labor-force-participation-not-due-to-disability-programs

Kathy Ruffing 8/25/2017 Center on Budget and Policy Priorities

Despite political rhetoric, there is little support for the claim that 
growth in disability programs has caused a decline in labor-force 
participation. The Real Reason the U.S. Has Employer-Sponsored Health 
Insurance

https://www.nytimes.com/2017/09/05/upshot/the-real-reason-the-us-has-employer-sponsored-health-insurance.html?smid=tw-share

Aaron E. Carroll 9/5/2017 NY Times America needs its unions more than 
ever

https://www.ft.com/content/180127da-8e59-11e7-9580-c651950d3672

Lawrence Summers 9/3/2017 FT Why our current prosperity is not widely 
shared. To Understand Rising Inequality, Consider the Janitors at Two 
Top Companies, Then and Now

https://www.nytimes.com/2017/09/03/upshot/to-understand-rising-inequality-consider-the-janitors-at-two-top-companies-then-and-now.html?smid=tw-share

Neil Irwin 9/3/2017 NY Times Panic in the US treasury bill market causes 
disquiet

https://www.ft.com/content/4aa6ca68-918e-11e7-a9e6-11d2f0ebb7f0

Gillian Tett 9/10/2017 FT Markets seem outwardly calm, but 
uncertainty--and fragility--is building. CBOE Implied Correlation Index 
Highlights Rising Risks For Investors

https://www.seeitmarket.com/cboe-implied-correlation-index-highlights-rising-risks-investors-17246/#

Callum Thomas 9/4/2017 SeeItMarket Republican Tax Plan Poses Risk to 
U.S. Bond Market

https://www.wsj.com/amp/articles/republican-tax-plan-poses-risk-to-u-s-bond-market-1504085401

Vipal Monga 8/30/2017 WSJ Tax cuts meant to boost the economy could end 
up creating wake turbulence in bond markets. Is The 'Shadow Insurance' 
Business As Dangerous As The 'Shadow Bank' Of The Financial Crisis?

https://www.forbes.com/sites/vineerbhansali/2017/09/07/is-the-shadow-insurance-business-as-dangerous-as-the-shadow-bank-of-the-financial-crisis/#3ebe79063eb4

Vineer Bhansali 9/7/2017 Forbes Given looming insurance losses, a very 
sobering read. A darker side of hypermobility

http://journals.sagepub.com/doi/abs/10.1177/0308518X15597124?journalCode=epna&

Scott A Cohen, Stefan Gössling 8/3/2015 Sage How constant (50%+) 
business travel affects our identities, and our health. World Brace 
yourself for a market correction in two months, analysts warn

https://www.cnbc.com/2017/09/05/brace-yourself-for-a-market-correction-in-two-months-investment-manager.html

Silvia Amaro 9/5/2017 CNBC David Marsh's interview in this CNBC segment 
is superb. Why is the Yen a safe haven while Japan is in the crosshairs? 
These are the world's fastest-growing economies in 2017

https://www.weforum.org/agenda/2017/06/these-are-the-world-s-fastest-growing-economies-in-2017-2?utm_content=buffer7f34d&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

Alex Gray 6/9/2017 World Economic Forum These are the lost lessons of 
the Great Recession

https://www.weforum.org/agenda/2017/08/the-lost-lesson-of-the-financial-crisis?utm_content=buffer6d252&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

Mohamed A. El-Erian 8/21/2017 Weforum and Project Syndicate Chart of 
world GDP growth, developed vs developing economies. Interview With Bank 
of Mexico Gov. Agustín Carstens

https://www.wsj.com/articles/wsj-transcript-interview-with-bank-of-mexico-gov-agustin-carstens-1504021220?mod=e2twcb

WSJ 8/29/2017 Soon to be the head of the BIS. Netherlands is world 
number two in agricultural exports by using greenhouses and new 
technology

https://www.nextbigfuture.com/2017/09/netherlands-is-world-number-two-in-agricultural-exports-by-using-greenhouses-and-new-technology.html

Brian Wang 9/3/2017 NextBigFuture Would not have guessed that Holland 
trails only the US in food exports (by value). Demonetisation hit 
India's poor very hard, Raghuram Rajan tells Times of India

http://

Scroll.in 9/3/2017 India's reforms come at a price. Why is Bulgaria's 
population falling off a cliff?

http://www.bbc.com/news/world-europe-41109572

Ruth Alexander 9/7/2017 BBC Can a Giant Science Fair Transform 
Kazakhstan's Economy?

https://mobile.nytimes.com/2017/09/09/business/kazakhstan-expo-economy.html?referer=https://t.co/wZTJ4saT6g?amp=1

David Segal 9/9/2017 NY Times Chinese-Iranian Mutual Strategic 
Perceptions

http://www.journals.uchicago.edu/doi/abs/10.1086/693315?journalCode=tcj#.Wal4NRuJKa0.twitter

Anoushiravan Ehteshami , Niv Horesh , and Ruike Xu 8/9/2017 University 
of Chicago After the US ignored China in terms of Afghanistan, a topic 
that bears more discussion. What machines can tell from your face

https://www.economist.com/news/leaders/21728617-life-age-facial-recognition-what-machines-can-tell-your-face

Economist 9/9/2017 China China has banned ICOs

https://techcrunch.com/2017/09/04/chinas-central-bank-has-banned-icos/

Jon Russell 9/4/2017 TechCrunch And cryptocurrencies are feeling the 
pain. China to Curb Use of Shares as Collateral Amid Risk Concerns

http://www.caixinglobal.com/2017-09-11/101143691.html?cxg=web&Sfrom=twitter

Zhu Liangtao and Leng Cheng 9/11/2017 Caixin Time to Rethink Chinese Oil 
Demand?

https://macropolo.org/time-rethink-chinese-oil-demand/

Damien Ma 9/5/2017 MacroPolo China has reached peak oil. What does this 
mean for the global economy? Metals prices are saying a global recovery 
is afoot

https://www.ft.com/content/73dd13d4-8f21-11e7-9084-d0c17942ba93

FT China 9/1/2017 A Pillar of Chinese Growth Starts to Show Cracks

https://www.wsj.com/articles/a-pillar-of-chinese-growth-starts-to-show-cracks-1503039667?mod=e2twcb

Nathaniel Taplin 8/18/17 WSJ Real estate prices especially in the 
interior are faltering. Effect on commodity prices? The Chinese Saving 
Rate: Long-Term Care Risks, Family Insurance, and Demographics

http://web2.uconn.edu/economics/working/2017-17.pdf

Ayşe İmrohoroğlu and Kai Zhao June 2017 University of Connecticut Half 
of the increase in China's savings rate since 1980 is due to a 
combination of the 1-child policy and the loss of a social safety net 
for the aged.

With all best wishes,

Lyric Hughes Hale

Editor-in-Chief

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