Ryan's Feed
Feb 21, 2014
via Counterparties

The economics of Venezuela’s unrest

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At least six Venezuelans have died in clashes between anti-government protesters and the police. What started as a student outcry against crime, has turned into a larger protest against the Maduro regime, the opposition-aligned Caracas Chronicles writes. Leopoldo Lopez, a Harvard-educated economist who helped spearhead the movement, was arrested this week and initially charged with murder, but his charges were reduced to instigating arson and terrorism.

Feb 18, 2014
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The young and the riskless

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Last quarter, Americans’ household debt showed the largest quarterly increase since 2007. Total household debt rose to $11.5 trillion, which is still 9% below the 2008 peak. This the first year-over-year debt increase since the recession, according to a new report by the NY FedJoseph LaVorgna, the chief economist at Deutsche Bank, has declared that “the deleveraging cycle is over.”

Feb 18, 2014
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The young and the riskless

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Last quarter, Americans’ household debt showed the largest quarterly increase since 2007. Total household debt rose to $11.5 trillion, which is still 9% below the 2008 peak. This the first year-over-year debt increase since the recession, according to a new report by the NY FedJoseph LaVorgna, the chief economist at Deutsche Bank, has declared that “the deleveraging cycle is over.”

Feb 12, 2014
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There is no winner in a robot war

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High-frequency trading accounts for roughly half of US stock transactions, and the industry, which can involve roof lasers or strategically-located data centers, is shrinking as its profits “have collapsed”. But we finally have some actual data on how it affects markets. A new paper by Johannes Breckenfelder claims to be “the first empirical evidence on the competition between high-frequency traders (HFTs) and its influence on market quality.”

Feb 7, 2014
via Counterparties

Africa’s moment

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It’s become quite popular in the last few years to declare that Africa will be the next great economic success story. Two years after an Economist cover story declared that Africa is rising, the continent’s still putting up strong growth. The IMF expects sub-Saharan Africa to grow at 6.1% this year, the second-highest growth rate of any major region in the world. As Brookings’ Amadou Sy says, “there is a consensus in African policy circles that we are witnessing Africa’s moment.”

Feb 5, 2014
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What’s surrounded by water but has no liquidity?

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Yesterday in forgone conclusions: S&P downgraded Puerto Rico’s debt rating to junk status to (BBB-) (BB+). As Bloomberg notes, yields on Puerto Rico’s debt had been trading at junk levels since September.

Feb 3, 2014
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Shadow bailouts

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Slowing growth would be the main worry in China’s economy — if only it weren’t for the more worrisome growth of credit. China’s services sector grew at the lowest rate in five years in January, Reuters reports, which was preceded last week worrisome manufacturing data.

Jan 23, 2014
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Same ladder, bigger steps

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Let’s be happy that it’s not getting harder to climb up America’s economic ladder; let’s be sad that it’s not getting easier. “Children entering the labor market today have the same chances of moving up in the income distribution (relative to their parents) as children born in the 1970s,” the authors of a new, much-discussed study write. They found that American economic mobility has remained stable during the second half of the 20th century.

Jan 21, 2014
via Data Dive

Jeff Gundlach on the market’s extremely good, possibly unsustainable 2013

Jeff Gundlach, one of the market’s most well-known investors, is out with his predictions for 2014. “About everything that tends to characterize the vicinity of a top in the equity market seems to be in place. The stock market is at best fully valued, maybe a little over.” (Check out all of his charts here).

Gundlach writes that he has “never seen a forecast as solidified across every asset class as is the consensus for 2014,” and he suggests that the market could run out of steam. Here’s Gundlach’s look at various equity market returns last year:

Jan 16, 2014
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World inequality forum

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Next week, the World Economic Forum will hold its annual meeting in Davos, and it’s out with the latest edition of what it sees as the biggest global risks. As Linnette Lopez notes, income disparity has been the WEF’s number one risk, at least in terms of likelihood, for the last three years.