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Firat Ünlü  

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  • Internet Bubble 2.0: Facebook and Lessons Learned [View article]
    If facebook plays it wrong it might just become an address-book with little else use.
    Jul 25, 2011. 01:57 PM | Likes Like |Link to Comment
  • A deal between NFL owners and players could prevent serious economic loss in cities with teams for thousands of businesses that rely on the sport for revenue. As for the proposed deal itself,  two sports economists break down the impact: (1) consumer demand stays hot; (2) NFL owners will increase profits; (3) hyper-period of free agency.  [View news story]
    Another option: a virtual strike.
    Jul 22, 2011. 11:17 AM | Likes Like |Link to Comment
  • China's Bubble: You Ain't Seen Nothing Yet? [View article]
    Agree with you on the government but a couple of points where I'd like to expand the debate as your stance seems too 'American' to me as it neglects factors Europeans would include. The amount of people jumping on the China bandwagon blindsightedly is frightening in a way and made me more cautious.

    Isn't the European case that, yes, whilst high-speed rail is rarely economically viable it produces benefits for the country as a whole that go beyond the revenue stream? Spain's case might be interesting here. Another problem is that infrastructure once built is difficult to upgrade, hence it may make sense to 'build big' as any further extension comes with extra cost and problems not evident yet. Infrastructure is difficult to scale to exactly needed size and demand. Airport extensions anywhere in Europe take several years at best.

    Another idea specific to China may be that they have one or maybe two decades of really cheap labour left; so why not use it now and get things done?
    Sep 27, 2010. 09:47 AM | 8 Likes Like |Link to Comment
  • Does QE Drive Asset Prices Higher? [View article]
    Any link on the Credit Suisse document?
    Sep 24, 2010. 01:56 PM | Likes Like |Link to Comment
  • The Fed's Minimum Price Stability, Maximum Unemployment Policy [View article]
    "It order to tackle the non-existent deflation problem"

    There is deflation in the one sector that is of importance to the FED - asset prices.
    Sep 22, 2010. 02:27 PM | 5 Likes Like |Link to Comment
  • China, Japan and the U.S. [View article]
    "but there are a number of security issues, like North Korea and Iran that may be easier to address if the two largest economies in the world cooperated."

    China feels that by engaging with ASEAN the US is engaging in its sphere of influence and causing problems down the line. Hence cooperation on Iran and North Korea will be limited at best. The US has the nice option of confronting China via its vast array of neighbors whereas China cannot retaliate in similar fashion as the US is protected by two oceans and two friendly countries up north and down south. China is thus forced to knock the US somewhat via third states such as Iran. Anything that makes the Chinese feel like containment policy will have a negative effect elsewhere.
    Sep 22, 2010. 12:29 PM | 3 Likes Like |Link to Comment
  • Japan Is Not U.S.: Balance of Payments [View article]
    Don't you mean third? ;)
    Sep 22, 2010. 10:47 AM | Likes Like |Link to Comment
  • Japan Is Not U.S.: Balance of Payments [View article]
    Well, one could make a very good case that Japan cannot fulfill its obligations either. The main reason they got away with deficit spending at such rates was their captive financial system. If the US did the same with its citizens people would be outraged all over the place.
    In fact one could argue that Japan is facing more trouble than the US as Japanese people's pensions are tied up into JGB's. Unfortunately the Japanese government wasted their savings on unproductive measures that did not have an adequate rate of return.
    As one commentator above suggested, if the US defaults foreigners are sc***** but if Japan defaults then the Japanese are sc****.

    If you're making a profit but wasting the proceeds at the same you're not really saving.
    Sep 22, 2010. 09:34 AM | Likes Like |Link to Comment
  • The Currency 'Nuclear Option' That Isn't [View article]
    It is hardly a huge challenge to find out which exact securities China holds, that side-issue is so small as to be considered irrelevant. Seriously.

    China can trade US dollars it earns via trade to other economies but for the most part it seems content in racking up dollar-denominated assets, US Treasuries are just one part of those which is why it's pointless to look at solely these. For all the talk about moving into gold, compared to the bond market it is a miniscule market. If they want a substantial trade surplus with the US the only real market of sufficient size to re-invest those dollars is the Treasury market. Anything else is really too small. That's basic economics.

    Don't delude yourself regarding China just because you're unhappy with US policy. Many people make the mistake of transfering their wish of US interest rising on to some third actor in vain hope. That's hardly mature.
    China does not possess magical abilities no matter how many people wish it had these. Its actions are constrained by real economic forces.

    I've laid out the argument in easy to understand terms, as it seems that you do not wish the follow the argument any further debate seems pointless and unproductive.
    Sep 20, 2010. 04:28 AM | Likes Like |Link to Comment
  • The Currency 'Nuclear Option' That Isn't [View article]
    The point is that interest rates would not go up as the US could either declare them null and void (which is different from defaulting) or print (what some economists would even love to see). Secondly, whether or not interest rates rising would be a good thing for the economy is a totally different matter altogether as only few people would claim that China has the right to get the US back on the right track of fiscal discipline through 'the school of hard knocks'.

    Believing that the US needs higher interest rates and hence declaring any outside intervention to achieve that outcome welcome is different from a deliberate ploy of trying to undermine US economic (and national) security. That's why it's called 'nuclear option' and not 'external stimulus'. The short-term consequences of such an action would either be cleaned up by the FED through printing (rendering the 'dump' useless) or by the US government declaring those bonds null and void (again rendering the 'dump' useless). The US migt declare the bonds null and void temporarily until tensions subside and the Chinese threat is revoked, taking some heat off the confrontation and gaining moral upper ground.

    As far as protectionist measures are concerned, as a German I'm quite sick of others trying to excuse their way out of poor economic-policy by merely shifting the blame on exchange-rates. The Japanese are still reeling from the Plaza Accord when they gave in to US demands. I don't even need to mention agricultural subsidies in Europe and the US that have caused havoc in huge parts of the world.

    Shall we really open that can of worms?
    "They're led by former U.S. President Bill Clinton — now U.N. special envoy to Haiti — who publicly apologized this month for championing policies that destroyed Haiti's rice production. Clinton in the mid-1990s encouraged the impoverished country to dramatically cut tariffs on imported U.S. rice."
    Sep 20, 2010. 01:23 AM | Likes Like |Link to Comment
  • The Currency 'Nuclear Option' That Isn't [View article]
    The only way the Chinese could conceivably make use of the 'nuclear option' would be in an environment of extreme geopolitical instability. You need to remind yourself of the serious consequences any such action would have on the economy. There is good reason to believe that a case of deliberate 'economic warfare' would be considered unlegitimized even outside the US. Yes, the Chinese would sell into the global market place but who would buy bonds that have been rendered null and void, without the promise of the USG to pay they are worthless.

    The reason others would have little to nothing to fear is that they wouldn't be so stupid to engage in economic warfare in the first place. Do you seriously believe that the USG would just let itself be rolled over instead of taking decisive action?
    Sep 19, 2010. 11:53 PM | Likes Like |Link to Comment
  • Washington Post Fails to Understand How Currency Values Affect Trade [View article]
    America runs a trade deficit with 90+ nations, the yuan is just one piece of the puzzle.

    As for currencies.



    Care to draw any conclusion based on this data or are Germany and Japan supposed to have been undervalued all the time?
    Sep 19, 2010. 09:24 AM | 2 Likes Like |Link to Comment
  • From the Industrial Age to the Information Age, Kicking and Screaming [View article]
    Many interesting points but I'd just like to mention that we could move from an agricultural society to an industrial one because the agricultural sector managed to increase production and feed the population just as well whereas in the move to the information age the domestic American industrial sector has failed to keep up with demand. Hence the comparison isn't quite the same.
    Sep 19, 2010. 04:58 AM | 1 Like Like |Link to Comment
  • Geithner's Decision on China [View article]
    The reason those countries are not joining in is that their currencies have actually FALLEN since 2008 compared to the $ and hence to the yuan which is pegged to the dollar.
    Sep 17, 2010. 03:08 AM | 3 Likes Like |Link to Comment
  • Deflation and a Growing Economy? [View article]
    I would love to see a coherent argument that deflation is 'bad' for the economy. The mere fact that people believe that rising house prices are 'good for the economy' sums it all up. We are in deflation now because we had been through an unsustainable credit boom for at least a decade. What is so difficult in grasping this concept?!
    Of course you can prop up AD but eventually you run up against a brick wall.

    As far as the so-called productivitiy boom is concerned, I'd love to see the data on it. My gut tells me that finance/RE were behind it.
    Sep 14, 2010. 06:53 AM | 3 Likes Like |Link to Comment