Subject: EconVue Spotlight MEXICO July 3, 2018
From: "Lyric Hughes Hale" <[email-masked]>
To: "R. Hunter Biden" <[email-masked]>
Date: Tue, 3 Jul 2018 20:41:59 -0700 (PDT)

Image: 
To see the original, click here:
http://content.davidhaleweb.com/acton/ct/3037/s-01f9-1807/Bct/l-sf-cl-701C0000000WTlZIAW-3a66/l-sf-cl-701C0000000WTlZIAW-3a66:1/ct55_0/1?sid=TV2%3AVGjr2hTgZ
Target URL: http://www.econvue.com
 
EconVue Spotlight

Dear R. Hunter,

Mexico matters. In addition to being our southern neighbor, Mexico is 
our third largest trading partner, after China and Canada. It is ranked 
as the 15 th largest economy in the world. On Sunday the country 
experienced a seismic change in leadership. Fueled by anger at violence 
and corruption, Andrés Manuel López Obrador, the 64-year old populist 
center left candidate best known as AMLO, was elected by a clear 
majority in all but one state and a simple majority in both houses. He 
had promised to Make Mexico Great Again.

AMLO will not be inaugurated as Mexico's 58 th president until Dec 1 st 
. This long interregnum could be a blessing. Investors are concerned 
about changes in fiscal policy and sectoral reform, and the quality of 
his new and probably divided cabinet. When he governed Mexico City, AMLO 
was not known as a listener, but as a bit of an autocrat, big on 
promises but providing few details on programs for combatting crime and 
corruption. Over the last 25 years, Mexico's guiding governing 
philosophy was focused on a small state, market-driven economy. That is 
likely to change, with support of "national champion" industries such as 
agricultural and energy.

In addition to increasing entitlements, AMLO has plans to double 
infrastructure spending, especially in the disadvantaged south, and on 
the campaign trail he discussed working with China to build refineries 
to create energy self-sufficiency. Will the US see Chinese ownership of 
telecommunications facilities for example as a security threat? EconVue 
expert Evan Ellis

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

explores this question, which illuminates a new global game.

Guest commentator Isidro Morales Moreno

http://escueladegobierno.itesm.mx/profesores-e-investigacion/personal-docente/dr-isidro-morales-moreno?language=en

discusses the role President Donald Trump has played in Mexican politics 
and will continue to play. Trump said last night that he is willing to 
consider a bilateral Mexico-US trade agreement, so will this negative 
impact turn positive? Much will depend on the chemistry between these 
two improbable leaders, who began life so differently, and who are now 
on opposite sides of the political spectrum as well as the border.

RESEARCH BY ECONVUE EXPERTS

Mexico Likely to Elect 'AMLO' President — How Will It Impact the Region?

https://www.econvue.com/pulse/mexico-likely-elect-amlo-president-%E2%80%94-how-will-it-impact-region

R. Evan Ellis

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

In South America, although the region has moved to the political right, 
including the return of Sebastian Piñerain Chile, Ivan Duque's election 
in Colombia and Martin Vizcarra continuation of the Kuczynski government 
in Peru, its conservativism is increasingly divorced from its discontent 
with U.S. policies and China's growing influence.

How Trump is helping López Obrador pave his way to the Mexican 
Presidency

https://www.econvue.com/pulse/how-trump-helping-l%C3%B3pez-obrador-pave-his-way-mexican-presidency

Isidro Morales Moreno

https://www.econvue.com/users/isidro-morales-moreno

With the advantage of not having held a government position since he 
left the governorship of Mexico City in 2005, AMLO easily exploited the 
binational crisis unleashed by President Trump to strengthen his 
presidential campaign.

Data Round-Up: Strong PMI Argues Trade War Fears Exaggerated

https://econvue.com/reports/michael-lewis/data-round-strong-pmi-argues-trade-war-fears-exaggerated

Michael Lewis

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

Newspapers and cable news are filled with comments from nervous 
executives complaining about the "Trump trade war." Apparently, 
purchasing managers are too busy to follow the news. Domestic and trade 
orders showed solid expansion in June. Meanwhile, non-residential 
construction appears headed for another double-digit quarter (fueled by 
oil rigs, which are not included in today's report).

The necessary illusionists: How money keeps its magic

https://www.econvue.com/pulse/necessary-illusionists-how-money-keeps-its-magic

Robert Pringle

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

Funny thing about money. It is supposed to be a bedrock of stability but 
it feeds on illusions. So much monetary policy relies on trickery. The 
elite know things that the unwashed masses do not. Such as money 
illusion. The success of devaluation rests on tricking the masses. But 
tell a central banker he or she is in the business of peddling illusions 
and risk a smack in the eye.

How Soccer Explains Healthcare: Collective Performance Defines Success

https://www.econvue.com/pulse/how-soccer-explains-healthcare-1-collective-performance-defines-success

David W. Johnson

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

Soccer legend Pele made this observation about life, "Success is no 
accident. It is hard work, perseverance, learning, studying, sacrifice 
and most of all, love of what you are doing or learning to do." 
Healthcare is an industry infused with hard work, perseverance, 
learning, studying, sacrifice and most of all, love. With the right 
tactics and strategy, every healthcare organization can win.

STORIES IN OUR SPOTLIGHT

MEXICO

López Obrador and the Future of Mexican Democracy

https://www.foreignaffairs.com/articles/mexico/2018-07-02/lopez-obrador-and-future-mexican-democracy

Shannon K. O'Neil 7/2/2018 Foreign Affairs

Will he further erode the checks on executive power?

Third Time's a Charm: Why AMLO succeeded this time around

http://www.letraslibres.com/mexico/politica/millenials-agendas-y-campanas-por-que-la-tercera-fue-la-vencida-amlo

(Spanish)

Santiago Rodríguez ​

http://www.letraslibres.com/mexico/politica/millenials-agendas-y-campanas-por-que-la-tercera-fue-la-vencida-amlo

and Jorge Galindo 7/2/2018 Letras Libres

A series of graphs that display the coalitions behind each of the 
candidates in Mexico's presidential race.

Tropical Messiah: H

https://www.economist.com/briefing/2018/06/21/how-andres-manuel-lopez-obrador-will-remake-mexico

ow Andrés Manuel López Obrador Will Remake Mexic

https://www.economist.com/briefing/2018/06/21/how-andres-manuel-lopez-obrador-will-remake-mexico

o

The Economist 6/21/2018

AMLO has promised to combat the 'Mafia of Power' in Mexico and bring 
about the '4th transformation' in Mexican history, this time without 
violence. "His concern for the poor and wish to improve their lot is 
sincere. However, Mr López Obrador has a shaky grasp of economics... and 
he has little respect for rules or institutions."​

In Mexico, rising 'mass crime' defies security forces&nbsp;

https://www.washingtonpost.com/world/the_americas/in-mexico-rising-mass-crime-defies-security-forces/2018/06/27/7491c4a8-79bf-11e8-ac4e-421ef7165923_story.html?utm_term=.5ba6db75e5cc

Mark Stevenson 6/27/2018 Washington Post

The breakdown in trust between citizens and the state has corrupted 
daily life. "The logic of the people is that they see politicians and 
officials stealing big time... and they see themselves as having the 
same right to steal as the big-time politicians."

The Power to Kill (Spanish)

https://www.proceso.com.mx/540545/poder-para-matar

Denise Dresser 6/28/2018 Proceso Magazine

In recent months, over 100 politicians have been slain... Men and women 
on the campaign trail, shot, beaten, and kidnapped. As Mauricio Merino 
states, "the macabre punctuality of death" now reaches into the town 
halls, mayoral offices, and electoral districts. Blood stains elections 
and ballots. It stains Mexico.

U.S.

Disquiet on the home front

https://economicequality.blog/2018/06/29/disquiet-on-the-home-front/

Karen Shaw Petrou and Basil N. Petrou 6/29/2018 Economic Equality Blog

Does increasing overall prosperity mask growing economic inequality? 
Cautionary words for the Fed.

U.S. retail sales jump 0.8% in May, point to strong second-quarter GDP

https://www.marketwatch.com/story/us-retail-sales-jump-08-in-may-point-to-strong-second-quarter-gdp-2018-06-14

Jeffry Bartash 6/14/2018 Market Watch

You just can't keep the American consumer down, even with higher oil 
prices.

E-Commerce might help solve the mystery of low inflation

https://www.nytimes.com/2018/06/11/business/economy/inflation-internet.html

Patricia Cohen and Jim Tankersley 6/11/2018 New York Times

Unemployment is sinking and businesses are churning out more goods and 
services. Yet even with the economy standing on tippy toes, prices and 
wages are climbing a lot more slowly than anyone has expected. Now a 
growing body of research is putting the blame more pointedly on 
e-commerce.

Online retailers slide after U.S. court ruling on sales tax

https://www.reuters.com/article/us-usa-court-taxes-buzz/online-retailers-slide-after-u-s-court-ruling-on-sales-tax-idUSKBN1JH27O?utm_campaign=trueAnthem:+Trending+Content&utm_content=5b2bd74204d3012f33a9367a&utm_medium=trueAnthem&utm_source=twitter

6/21/2018 Reuters

Predictions: this will hurt small businesses as it has in Canada, 
hitting them with an insurmountable administrative burden, helping the 
bigger online players such as Amazon. Higher online sales taxes could 
negatively impact consumers more than Chinese import tariffs.

More students are taking on crippling debt they can't repay—it's time 
for higher education to share the risks

https://www.brookings.edu/blog/up-front/2018/02/16/more-students-are-taking-on-crippling-debt-they-cant-repay-its-time-for-higher-education-to-share-the-risks/

Adam Looney 2/16/2018 Brookings

If ever there were a time for a debt amnesty this is it. Imagine the 
positive effects on household formation. It would be interesting to see 
a projection about the long term effects on GDP should this happen.

American families shouldn't be separated, either

https://www.bloomberg.com/view/articles/2018-06-18/family-separation-goes-beyond-trump-s-immigration-plan

Tyler Cowen 6/18/2018 Bloomberg

I've written about for-profit prisons and the simultaneous rise in 
incarceration rates. Fewer than 15% of the millions of children whose 
parents are in prison see them even once a month. "Our treatment of 
outsiders is rarely an accident, and it so often mirrors how we have 
been treating each other all along."

The geography of poverty and nutrition: Food deserts and food choices 
across the United States

https://econpapers.repec.org/paper/eclstabus/repec_3aecl_3astabus_3a3631.htm#.Wyf0cYdavIE.twitter

Hunt Allcott, Rebecca Diamond and Jean-Pierre Dube Econpapers

Supply side issues (food deserts) are not as critical as demand, largely 
driven by regional choices, knowledge of nutrition, and education.

World

The wealth of the other&nbsp;Americas

https://nephist.wordpress.com/2018/04/25/the-wealth-of-the-other-americas/

Gerardo della Paolera, Xavier Durán & Aldo Musacchio The NEP-HIS Blog

This is one of several new papers about industrialization proving many 
of our earlier assumptions wrong.

Trade war hits stocks as $8 trillion in Bear Market: Inside EM

https://www.bloomberg.com/news/articles/2018-06-26/trade-angst-hits-emerging-stocks-with-8-trillion-in-bear-market

Ben Bartenstein & Giulia Morpurgo 6/26/2018 Bloomberg

And possibly more to follow in emerging markets.

When is it rational to learn the wrong lessons? Technocratic authority, 
social learning, and Euro fragility

https://www.cambridge.org/core/journals/perspectives-on-politics/article/when-is-it-rational-to-learn-the-wrong-lessons-technocratic-authority-social-learning-and-euro-fragility/976C56459E4C7D3EAB536CD3CB1B5AAA

Matthias Matthijs and Mark Blyth 9/18/2017 Cambridge University Press

Fascinating paper that explains why bad policy decisions persist when 
they are economically wrong--because politics.

Emerging markets under pressure

https://www.cfr.org/blog/emerging-markets-under-pressure

Brad W. Setser 6/14/2018 Council on Foreign Relations

Not all emerging markets are created equal. Brazil also benefits from 
having much higher reserves than either Turkey or Argentina. Its 
reserves are sufficient to cover the foreign currency debt of its 
government as well as its large state banks and firms in full .

How a satirical tweet managed to dent Euro and German stocks

https://www.bloomberg.com/news/articles/2018-06-15/how-a-satirical-tweet-managed-to-dent-the-euro-and-german-stocks

Lorcan Roche Kelly 6/15/2018 Bloomberg

Investors worried about the potential impact of fake news on financial 
markets, look away now.

Fed and ECB risk being caught off guard

https://www.omfif.org/analysis/commentary/2018/june/fed-and-ecb-risk-being-caught-off-guard/

Desmond Lachman 6/18/2018 OMIFF

Could the Fed be caught flat footed by problems in emerging markets and 
in Italy?

Can the Euro be saved?

https://www.project-syndicate.org/commentary/next-euro-crisis-italy-by-joseph-e--stiglitz-2018-06?utm_source=Project+Syndicate+Newsletter&utm_campaign=e4e588b06f-sunday_newsletter_17_6_2018&utm_medium=email&utm_term=0_73bad5b7d8-e4e588b06f-93754929

Joseph E, Stiglitz 6/13/2018 Project Syndicate

The end of the Euro, engineered by German inflexibility, and the 
possibility of a dual currency regime in Italy as envisioned by 
@stiglitzian

http://content.davidhaleweb.com/acton/ct/3037/s-01f9-1807/Bct/l-sf-cl-701C0000000WTlZIAW-3a66/l-sf-cl-701C0000000WTlZIAW-3a66:1/ct32_1/1?sid=TV2%3AVGjr2hTgZ

.

Asia

Reason for optimism on the Korean Peninsula

http://www.eastasiaforum.org/2018/06/17/reason-for-optimism-on-the-korean-peninsula/

Sourabh Gupta 6/17/2018 East Asia Forum

A positive view of the Trump-Kim Summit which "paved a path that, if 
faithfully trod, will close this painful chapter in Asia's modern 
history and set the Peninsula on a more hopeful trajectory."

In defense of the Trump-Kim Summit

https://medium.com/@devintstewart/in-defense-of-the-trump-kim-summit-15c308950a5

Devin T. Stewart 6/13/2018 Medium

There are real experts on Asia, with depth and experience who understand 
the big picture and the long game. @devintstewart

https://twitter.com/devintstewart

is one of them. Others say "Trump got played." Nonsense Stewart says. 
Trump left the summit with exactly what he wanted.

Can the United States abandon Taiwan?

http://www.eastasiaforum.org/2018/06/15/can-the-united-states-abandon-taiwan/

Jansen Tham 6/15/2018 East Asia Forum

Three reasons why the US cannot do so, in spite of heightening 
cross-strait tensions.

China

Learning Latin America: China's strategy for area studies development

https://www.thedialogue.org/resources/learning-latin-america-chinas-strategy-for-area-studies-development/

Margaret Myers, Ricardo Barrios & Guo Cunhai 6/21/2018 The Dialogue

The Chinese government is thinking long term about Latin America, and 
has established 60 study centers throughout China.

China says industrial profits rose from 2.9 trillion yuan last year to 
2.7 trillion yuan this year. Just don't ask why

http://www.scmp.com/news/china/economy/article/2153224/china-says-industrial-profits-rose-29-trillion-last-year-27

Sidney Leng 6/30/2018 South China Morning Post

Data that changes on an "ad hoc and floating basis"is really no data at 
all. Even more interesting: what's driving numerical gymnastics at 
China's National Bureau of Statistics?

So now, even a commercial passenger jet flying from Europe to China is 
being called "Belt and Road"?

https://twitter.com/EvanFeigenbaum/status/1012246997154267136

Evan Feigenbaum Twitter 6/28/2018 Twitter

What will a map of Belt & Road look like 10 years from now-scenarios? Is 
the program oversold right now?

Technology Notice how the regions that have been prone to hyperinflation 
and/or capital controls are more willing to hold bitcoin.

https://twitter.com/MartyBent/status/1009299242035372032

Marty Bent 6 /19/ 2018 Twitter

Bitcoin will be impossible to reflate into a bubble again

https://www.marketwatch.com/story/bitcoin-will-be-impossible-to-reflate-into-a-bubble-again-2018-06-14

6/14/2018 Market Watch

As soon as someone says "I don't have a problem with blockchain as a 
technology, which I admit is revolutionary; but I do have a problem with 
bitcoin" I know they understand neither economic incentives nor 
technology.

The Texas well that started the fracking revolution

https://www.wsj.com/articles/the-texas-well-that-started-a-revolution-1530270010

Russell Gold 6/29/2018 Wall Street Journal

One of those great untold stories in technology, and the engineer who 
began it all.

On the sad state of Macintosh hardware

https://weblog.rogueamoeba.com/2018/06/14/on-the-sad-state-of-macintosh-hardware/

Quentin Carnicelli 6/14/2018 Under the Microscope Blog

This really is shocking-no Mac updates for over a year with the 
exception of the IMac Pro, and that was six months ago. Or is there a 
major Mac product update around the corner?

Regulated crypto custody is (almost) here. It's a game changer

https://www.bloomberg.com/news/articles/2018-06-18/regulated-crypto-custody-is-almost-here-it-s-a-game-changer

Olga Kharif & Sonali Basak 6/18/2018 Bloomberg

This is critical and gives banks a role too. Most investment advisers 
are required by the SEC to keep client funds with a qualified custodian. 
That's left more than 250 crypto-focused funds -- and especially the 
largest -- facing the prospect that regulators could clamp down .

Sequoia Capital China said to invest in Bitmain's $400M pre-IPO round

https://www.chinamoneynetwork.com/2018/06/11/sequoia-capital-china-said-to-invest-in-bitmains-400m-pre-ipo-round

Yimian Wu 6/11/2018 China Money Network

Beijing-based Bitmain is the world's leading if not monopoly 
manufacturer of cryptocurrency mining equipment. Is this valuation too 
cheap?

Illinois

Why Chicago owns a piece of the southern border crisis

http://www.chicagobusiness.com/article/20180622/ISSUE07/180629954

6/22/2018 Crain's Chicago Business

Excellent editorial about Chicago's role in drug trafficking, but no 
mention of US-manufactured guns that fuel the violence. 2-way street.

Illinois's rainy day fund would cover only 81 seconds of state spending

https://www.illinoispolicy.org/illinois-rainy-day-fund-would-cover-only-81-seconds-of-state-spending/

Joe Barnas 6/25/2018 Illinois Policy

A $98,000 emergency fund...for an entire state. That is less than one 
penny per citizen.

Musk hyperloop: Hoover mover

https://www.ft.com/content/7851afca-70b1-11e8-852d-d8b934ff5ffa

6/16/2018 Financial Times

Capacity issues with a small number of passengers per pod could mean 
that you'll spend more time waiting in line at the station than 
traveling to O'Hare.

Happy 4 th of July!

With all best wishes,

Lyric Hughes Hale

Editor-in-Chief

Econvue.com
https://www.econvue.com
Facebook
https://www.facebook.com/Econvue-1441609279386714/
  Twitter
https://twitter.com/lyrichues

Subscribe to Econvue
https://econvue.com/why-subscribe

My articles for Yale Books London
http://yalebooks.wordpress.com/?s=lyric+Hughes+Hale

"What's Next? Unconventional Wisdom on the Future of the Global Economy"
http://whatsnextbook.com/

©2018  EconVue, LLC. All rights reserved. This document may not be 
quoted, forwarded, disseminated, distributed, or published without the 
express written consent of EconVue, LLC. Any views or opinions expressed 
are solely those of the author and do not necessarily represent those of 
EconVue, LLC.,  are economic in nature, and should not be relied upon 
for making investment decisions. 

This email and any attachments to it may be confidential and are 
intended solely for the use of the individual to whom it is 
addressed. If you are not the intended recipient of this email, you must 
neither take any action based upon its contents, nor copy or show it to 
anyone. Please contact the sender if you believe you have received this 
email in error.

--------------------------------------------------------------------------------
Copyright © 2016 EconVue, LLC

  
http://content.davidhaleweb.com/acton/rif/3037/s-01f9-1807/-/l-sf-cl-701C0000000WTlZIAW-3a66:1/l-sf-cl-701C0000000WTlZIAW-3a66/zout?sid=TV2%3AVGjr2hTgZ
 if you do not wish to receive future email