Some (Not Very Convincing) Evidence That This is Still the Greatest Country in the World

Today is not a great day for the American government, people, economy and reputation. But that doesn't mean a good dose of schadenfreude can't lift the gloom some.
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Today is not a great day for the American government, people, economy and reputation. But that doesn't mean a good dose of schadenfreude can't lift the gloom some.

The unemployment rate in the euro zone edged up in January to a new record, official data showed Friday, as the ailing European economy continued to weigh on the job market….

Unemployment in the 17-nation euro zone climbed to 11.9 percent in January from 11.8 percent the previous month, according to Eurostat, the statistical office of the European Union.

For the 27 nations of the Union, the jobless rate in January stood at 10.8 percent, up from 10.7 percent in December. All of the figures were seasonally adjusted….

The jobless data “suggest that wage growth is set to weaken from already low rates” and further depress consumer spending, which has already been damped by government austerity measures, Jennifer McKeown, an economist at Capital Economics in London, wrote in a research note.

Data firm Markit said its manufacturing purchasing managers' index slid into contraction territory with a weaker-than-expected 47.9 in February from January's 50.5. Economists had forecast the index would rise to 51.0.

Sterling sank in response to the numbers. By midafternoon in Europe, the pound was trading below the $1.50 level for the first time since July 2010, taking its losses against the dollar so far this year to more than 7%. Sterling also weakened against the euro….
A separate report showed consumer lending retreated in January, a reflection of Britons' limited appetite for borrowing.

Consumer lending grew just £593 million ($899.2 million) in January, down from a £1.8 billion increase in December, according to Bank of England data. Mortgage lending also slumped, as it grew just £147 million in January after December's £877 million increase.

Mortgage approvals—a good forward-looking indicator of lending and house prices—totaled just 54,719 in January from 55,632 a month earlier.

Canada’s economy expanded at a snail’s pace as 2012 ended.

Gross domestic product grew by just 0.6 per cent, on an annualized basis, in the fourth quarter of 2012, Statistics Canada said Friday, close to what was expected but a weak end to a year that saw crucial commodity prices soften, the housing market slow down, and retail spending slip.

On a monthly basis, GDP fell by 0.2 per cent in December alone. And for 2012 as a whole, growth slowed to 1.8 per cent, the smallest growth since the recession in 2009. It was also the first time in six years that Canada’s full-year numbers were lower than in the United States, National Bank Financial economist Krishen Rangasamy pointed out.

Euro Zone Unemployment Rises to Record [NYT]
Unemployment Worsens in Euro Zone [WSJ]
Grim U.K. Data Knock Sterling [WSJ]
Canada's economy still 'sickly' [Globe & Mail]

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Dispatches From The World Series Of Poker

What do you do when you’re a mid-20s male that dropped out of college to play online poker for a living, and the government suddenly cuts off your source of income? The answer, it seems, is move to Mexico. That’s right; apparently there is an expatriate community of American online poker professionals that have relocated to Baja California, just across the border from San Diego. A larger group is centered in Cabo San Lucas, which is much nicer but also more expensive and farther from the States. Hundreds of players have made the move and resumed playing on Pokerstars and the smaller European sites. However, right now it is June, and that means poker players live or online are in Las Vegas for the World Series of Poker. I was curious to see the long-term repercussions of the government’s crackdown on internet poker last April. Unsurprisingly, it seems like the live poker industry has contracted. Overall, Americans had $150 million stuck online in the now-defunct Full Tilt Poker, and removing all that cash from the poker economy was bound to hurt the live games. From what I saw, most of the cash games at the Rio were small-stakes No Limit Hold ‘Em or Pot-Limit Omaha. There were a few bigger-stakes mixed games but nothing above $50/$100 limit. As for the WSOP itself, the number of entrants to most events has fallen off dramatically year-over-year. Last year, the first $1,500 no limit tournament had 3,157 entrants; this year it had 2,101. A dealer told me that Harrah’s overestimated the player pool and hired a lot more staff than was necessary. The fabled ‘big game’ with Doyle Brunson et al no longer runs regularly in Las Vegas. Amazingly, the biggest games in the world have now moved to Macau, where the ultra-high-limit players are competing with Chinese businessmen in No Limit games with blinds of HKD$10,000/HKD$20,000($1,300/$2,600). Probably the biggest story from this year’s WSOP was Phil Ivey nearly winning another bracelet. Ivey didn’t play last year’s series due to the Full Tilt debacle, but this year he’s back and five-bet bluffing as usual. First-place money in a preliminary WSOP event has long since ceased to matter to Ivey, as he regularly plays in games with million-dollar swings. However, he’s got huge side bets that pay off if he wins a bracelet. The rumors going around place the odds for these bets at either 2-1 or 3-1, and the amounts are likely in the millions. In other words, if Ivey wins a bracelet, he gets the first-place money, but he also gets several million additional dollars from the side bets. He’s come close twice already – he took 3rd in the $5K Omaha 8 event and 2nd in the $10K pot limit hold ‘em event. In the latter tournament he was defeated in heads-up play by a former Wall Street equity trader. The next big thing at the WSOP is the million-dollar-buyin tournament coming up on July 1st. The event is capped at 48 players, and it seems likely to sell out. Nearly every confirmed entrant so far is a professional poker player, many of whom have likely sold off big pieces of their action. There are a couple of confirmed non-professional players including an “anonymous hedge fund manager.” For the next few years, it doesn’t seem likely that the WSOP will reach the size that it did in 2006, when the number of entrants to the main event peaked at 8,773. The live poker boom of the mid-2000s was always fueled by internet poker. When the major sites were shut down, the WSOP lost a major feeder source of new players. Americans still have $150M in funds locked up on Full Tilt, and it remains doubtful that any of that money will come back. The only hope for a revival for the struggling industry is the legalization of online poker in individual states. In a supremely ironic twist, the Justice Department changed its mind about internet poker last December and cleared the way for regulated intrastate poker. Nevada has already passed legislation and will probably have games up and running within a few months; it seems likely that other states will follow.