The crisis in youth unemployment
Though recent events in the Middle East are considered a major surprise to markets, the indices show no signs of pausing in their upward climb. While many explanations exist for the rapid changes in Tunisia and Egypt, at the core is a frustrated youth class, characterized as underemployed, underpaid and under authoritarian rule. With unemployment rates in excess of 20%, the streets have been filled with cries of protest, and more importantly, cries of change.
As investors, we focus too often on the shorter-term impacts of earnings, interest rates and commodity prices. Easily overlooked in all the market noise is demographics: the long change in population swings that is easy to identify, but hard to trade, except when something blows up, as in Egypt.