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.
Venezuela’s protests are new, but country has long been in a state of economic upheaval. Its economic problems include, but aren’t limited to:
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prolonged shortages of basic goods, including sugar and milk;
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after inflation hit 56%, the highest of any of 103 countries examined by Bloomberg, Venezuela forced retailers to cut prices. Businesses must also give the government information on their profit margins;
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it has devalued its currency several times in the last few years;
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it ranks as one of the most crime-addled economies in the world;
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foreign currency reserves are at a 10-year low;
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while it pays overseas bondholders on time, Venezuela has been frequently late in making payments to domestic companies that own government bonds.
The WSJ explains how these late payments are leading to shortages -- auto assembly is down 83% over last year -- and shortchanging Venezuelans:
The overdue tab to private companies includes $14 billion owed to partners and contractors in the oil industry, $9 billion to importers and more than $4 billion to services companies like airlines, Ecoanalitica estimates. There also are more than $10 billion in profits that foreign companies have wanted to convert from bolívares to dollars but have been unable to since 2008.
Venezuela does have the largest oil reserves in the world. But, as, Megan McArdle writes, oil prices have fallen, production is now below pre-Chavez levels, and the country’s crude is relatively hard to extract. Less oil money, the FT writes, means less to spend on imports and social programs. As the oil industry has had less cash to invest, its production has continued to fall.
David Frum says the Maduro regime hasn’t been able to use oil money to adequately bribe potential opponents, a key tool of Chavez’s power. Raul Gallegos points out that even the Maduro government has suggested publicly that it has bungled the distribution of the country’s oil money. “What was happening was that we saw how many dollars we had, but their utilization had no planning”, Venezuela’s energy czar said. -- Ryan McCarthy
On to today’s links:
Crisis Retro
A great timeline of the 2008 Fed transcripts and the financial crisis - NYT
The newly-released Fed transcripts from the height of crisis - Federal Reserve
What the Fed suspected about LIBOR-rigging in 2008 - WSJ
Charts
What US inflation tells about how the global economy is shifting - WSJ
The Fed
The world is in the midst of "the sum of all tightenings - Barnejek’s blog
Facebook
Facebook, WhatsApp, and the difference between price and value - Aswath Damodaran
"The WhatsApp acquisition is a statement by Zuckerberg that mobile matters more than money" - Felix
Inequities
The commuting penalty of being poor and black in Chicago - Emily Badger
Chicago's arguably racist crime-predicting algorithms - The Verge
Possibly Useless Data
The lies a beautiful map can tell - Runkeeper
Servicey
The flu is bad. The flu vaccine works. Get vaccinated - Incidental Economist
Seven fund managers your should follow on Twitter - Financial Acrobat
Correlation of the Day
Cat bites are linked to depression - PopSci
Data Points
Calculating Wayne Rooney's salary (and a registered nurse’s) in real time - Mirror
Billionaire Whimsy
Donating $200 million to projects the Federal government probably would have funded anyway - NYT
Long Reads
The vanished queen of Scientology - Vanity Fair
Innovation
Tesla's most disruptive product may not be its cars - Quartz
Explained
Credit card companies explain why your credit cards aren't safer - WaPo
JP Morgan
JP Morgan shareholder wants an "ongoing dialogue" on splitting Jamie Dimon's jobs, not a vote - WSJ
Awful
The head of Colorado’s prisons on what a night in solitary confinement feels like - NYT
Oxpeckers
"Gawker's reliance on journalists is, Denton believes, a fatal weakness, one he means to correct" - Jeff Bercovici
Follow Counterparties on Twitter. And, of course, there are many more links at Counterparties.
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