Eric Balkan's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/1590/comments http://seekingalpha.com/article/76156-why-inflation-is-lower-than-you-think?source=feed#comment-164033 164033 Thu, 08 May 2008 09:07:56 -0400 http://seekingalpha.com/article/65853-indian-outsourcers-fight-back-against-presidential-candidates?source=feed#comment-118759 118759 First the ads, then the layout, then the circulation office, then the editing, then when the actual printing goes electronic.... I guess the reporters are safe, though I imagine the investors are trying to figure out a way to replace them with H-1Bs. ]]> Mon, 25 Feb 2008 12:01:45 -0500 First the ads, then the layout, then the circulation office, then the editing, then when the actual printing goes electronic.... I guess the reporters are safe, though I imagine the investors are trying to figure out a way to replace them with H-1Bs. ]]> http://seekingalpha.com/article/65812-a-look-at-the-phillips-curve?source=feed#comment-118443 118443 ]]> Sun, 24 Feb 2008 17:07:30 -0500 ]]> http://seekingalpha.com/article/65681-1970s-style-stagflation-i-don-t-buy-it?source=feed#comment-117796 117796 Fri, 22 Feb 2008 08:49:53 -0500 http://seekingalpha.com/article/63871-a-housing-bubble-within-a-bubble?source=feed#comment-115534 115534 Sun, 10 Feb 2008 13:17:30 -0500 http://seekingalpha.com/article/63390-america-s-middle-class-living-large?source=feed#comment-114955 114955
Want to have dueling stats? Here's a little one to chew on. The US has the highest rate of downward mobility among any developed country in the world.

ericbalkan@yahoo.com]]> Wed, 06 Feb 2008 18:29:26 -0500
Want to have dueling stats? Here's a little one to chew on. The US has the highest rate of downward mobility among any developed country in the world.

ericbalkan@yahoo.com]]> http://seekingalpha.com/article/60783-learning-from-dan-sullivan-experience-or-errors?source=feed#comment-111722 111722 Sun, 20 Jan 2008 14:08:47 -0500 http://seekingalpha.com/article/59659-do-rising-prices-indicate-inflation?source=feed#comment-109418 109418 In any case, the money supply, which the Fed has been increasing by around 10-15% over the past couple of years -- estimating M3 -- does not include values of non-liquid assets. If we all owned a zillion dollars worth of land on the Moon, and the Moon was destroyed, wiping out our entire investment, that would still not be monetary deflation, i.e., a reduction in the money supply.
The Wash Post figured the cost of a Thanksgiving dinner this past Nov as being 11% higher than the previous year. Given, as Jim Rogers points out, a continued shortage of commodities, plus continued increases in Asian demand for fuel, that trend is unlikely to go away by itself.

]]> Thu, 10 Jan 2008 11:41:33 -0500 In any case, the money supply, which the Fed has been increasing by around 10-15% over the past couple of years -- estimating M3 -- does not include values of non-liquid assets. If we all owned a zillion dollars worth of land on the Moon, and the Moon was destroyed, wiping out our entire investment, that would still not be monetary deflation, i.e., a reduction in the money supply.
The Wash Post figured the cost of a Thanksgiving dinner this past Nov as being 11% higher than the previous year. Given, as Jim Rogers points out, a continued shortage of commodities, plus continued increases in Asian demand for fuel, that trend is unlikely to go away by itself.

]]> http://seekingalpha.com/article/58121-tax-vs-interest-rate-cuts?source=feed#comment-106433 106433
The last time a major income tax cut was implemented, sales of Mercedes went through the roof. How does that help the US economy?

Increase taxes on the wealthy and pump that additional money directly into alternative energy companies (but not corn-ethanol), into helping people make mortgage payments, into providing health care for those who don't have it.... Stimulate the economy by increasing spending here in the US, not by giving money away to people who are going to send it overseas. ]]> Fri, 21 Dec 2007 16:00:54 -0500
The last time a major income tax cut was implemented, sales of Mercedes went through the roof. How does that help the US economy?

Increase taxes on the wealthy and pump that additional money directly into alternative energy companies (but not corn-ethanol), into helping people make mortgage payments, into providing health care for those who don't have it.... Stimulate the economy by increasing spending here in the US, not by giving money away to people who are going to send it overseas. ]]> http://seekingalpha.com/article/56333-an-analysis-of-ben-stein-s-beef-with-goldman-sachs?source=feed#comment-104129 104129 Wed, 05 Dec 2007 08:51:17 -0500 http://seekingalpha.com/article/52769-credit-crisis-mortgage-mess-deflation?source=feed#comment-101296 101296 Thu, 08 Nov 2007 08:43:52 -0500 http://seekingalpha.com/article/49174-flaws-in-the-u-s-economy?source=feed#comment-97991 97991 Mon, 08 Oct 2007 11:29:47 -0400 http://seekingalpha.com/article/48769-bill-gross-on-the-mortgage-mess?source=feed#comment-97647 97647
Personally, I think Greenspan didn't see the housing bubble because he didn't want to see it. People overlook that Greenspan is a life-long libertarian. I.e., someone who believes that government intervention in the economy is wrong on principle. That's what got him the job in the first place. Libertarian economics specifically holds that the short term can be ignored because the free market will work everything out for itself in the long term. JM Keynes had a comment about that kind of thinking. ]]> Thu, 04 Oct 2007 03:44:18 -0400
Personally, I think Greenspan didn't see the housing bubble because he didn't want to see it. People overlook that Greenspan is a life-long libertarian. I.e., someone who believes that government intervention in the economy is wrong on principle. That's what got him the job in the first place. Libertarian economics specifically holds that the short term can be ignored because the free market will work everything out for itself in the long term. JM Keynes had a comment about that kind of thinking. ]]> http://seekingalpha.com/article/46958-what-is-ben-stein-smoking?source=feed#comment-95778 95778 "Subprime mortgage rates can easily get into the double digits, and homeownership makes very little sense in that situation."

That sounds right to me. When these ARMs reset, they often do reset to rates that are in double-digits.

A lot of these refinancings only made sense in a world where real estate prices keep going up forever. Here on planet Earth, which I invite Ben Stein to visit sometime, there are a lot of homeowners who would indeed have been better off as renters, until they could have really afforded to buy a house. ]]> Tue, 11 Sep 2007 16:10:06 -0400 "Subprime mortgage rates can easily get into the double digits, and homeownership makes very little sense in that situation."

That sounds right to me. When these ARMs reset, they often do reset to rates that are in double-digits.

A lot of these refinancings only made sense in a world where real estate prices keep going up forever. Here on planet Earth, which I invite Ben Stein to visit sometime, there are a lot of homeowners who would indeed have been better off as renters, until they could have really afforded to buy a house. ]]> http://seekingalpha.com/article/44566-cramer-s-meltdown-spills-into-print?source=feed#comment-94007 94007
The current problem has a lot to do with mortgage lending being based on the profit motive, a.k.a greed. The more loans the broker makes, regardless of quality, the more money he makes. The Fed used to regulate this -- which is why we didn't have this big a problem before -- but this is an anti-regulation era so the Fed doesn't do that any more.

ibrakefortrees.wordpre...]]> Sat, 18 Aug 2007 19:34:16 -0400
The current problem has a lot to do with mortgage lending being based on the profit motive, a.k.a greed. The more loans the broker makes, regardless of quality, the more money he makes. The Fed used to regulate this -- which is why we didn't have this big a problem before -- but this is an anti-regulation era so the Fed doesn't do that any more.

ibrakefortrees.wordpre...]]> http://seekingalpha.com/article/44566-cramer-s-meltdown-spills-into-print?source=feed#comment-93717 93717
The very first share of stock I bought, as a teenager, was the Pennsylvania Railroad. Great balance sheet -- they were one of the largest landowners in the U.S. But when they needed cash to keep running, they couldn't get it, and so went bust. Turned out there wasn't much of a market for plots of land 10 miles long and 15 ft wide.]]> Wed, 15 Aug 2007 11:29:34 -0400
The very first share of stock I bought, as a teenager, was the Pennsylvania Railroad. Great balance sheet -- they were one of the largest landowners in the U.S. But when they needed cash to keep running, they couldn't get it, and so went bust. Turned out there wasn't much of a market for plots of land 10 miles long and 15 ft wide.]]> http://seekingalpha.com/article/43403-the-plunge-protection-team-exposed?source=feed#comment-92916 92916
During the late Feb-Mar drop, someone noted that late on the day of the drop, the Fed loaned a couple of brokerage houses $40B. These brokers then went into the thinly traded overnight market and bought DJI futures. Then, when traders saw this "bullish" activity the following morning, they figured the drop was largely over. This was reported by at least two regular contributors to Seeking Alpha, one of whom reproduced a copy of the Fed loan record in his article. So, make of that what you will.]]> Sun, 05 Aug 2007 18:38:25 -0400
During the late Feb-Mar drop, someone noted that late on the day of the drop, the Fed loaned a couple of brokerage houses $40B. These brokers then went into the thinly traded overnight market and bought DJI futures. Then, when traders saw this "bullish" activity the following morning, they figured the drop was largely over. This was reported by at least two regular contributors to Seeking Alpha, one of whom reproduced a copy of the Fed loan record in his article. So, make of that what you will.]]> http://seekingalpha.com/article/40397-13-implications-of-the-u-s-current-account-deficit?source=feed#comment-90647 90647
There are at least 2 problems:
1 - Being competitive against economies where $15K/yr is a great salary exerts a downward pressure on salaries. Some economists have called this "The Race to the Bottom".
2 - The decline of unions means that workers no longer have the bargaining power their parents did. That when companies make money, the rewards are more likely to flow to upper management than to the bulk of the workers.

There's more, if you think about it.

- Eric Balkan
ibrakefortrees.wordpre...]]> Sun, 08 Jul 2007 17:21:00 -0400
There are at least 2 problems:
1 - Being competitive against economies where $15K/yr is a great salary exerts a downward pressure on salaries. Some economists have called this "The Race to the Bottom".
2 - The decline of unions means that workers no longer have the bargaining power their parents did. That when companies make money, the rewards are more likely to flow to upper management than to the bulk of the workers.

There's more, if you think about it.

- Eric Balkan
ibrakefortrees.wordpre...]]> http://seekingalpha.com/article/37861-a-symbiotic-relationship-between-the-united-states-and-china?source=feed#comment-88210 88210
Our relationship with China is symbiotic only in the sense that a drug addict has a symbiotic relationship with his supplier.


New economics blog: ibrakefortrees.wordpre...]]> Mon, 11 Jun 2007 03:22:01 -0400
Our relationship with China is symbiotic only in the sense that a drug addict has a symbiotic relationship with his supplier.


New economics blog: ibrakefortrees.wordpre...]]> http://seekingalpha.com/article/36368-pressuring-china-on-exchange-rate-policy-even-when-you-win-you-lose?source=feed#comment-86962 86962
I agree that changing the yuan-dollar rate won't change much. The trade deficit we have with nearly everyone is because we no longer make very much that other people want to buy: airplanes, movies, packaged software... that's about it. Pretty much everything else, from medical care to computers to fuel is better/cheaper overseas.]]> Thu, 24 May 2007 18:33:13 -0400
I agree that changing the yuan-dollar rate won't change much. The trade deficit we have with nearly everyone is because we no longer make very much that other people want to buy: airplanes, movies, packaged software... that's about it. Pretty much everything else, from medical care to computers to fuel is better/cheaper overseas.]]> http://seekingalpha.com/article/30826-housing-and-subprime-no-documents-no-problem-until-now?source=feed#comment-83335 83335
The basic problem here is that even though Victorian-era-style capitalism was rejected 100 years ago, it's made a comeback under the last few administrations. Because the Neo-Victorians don't believe that the profit motive should be reined in by government, the result is that Adam Smith's "invisible hand" is around our throats and throttling us.]]> Wed, 28 Mar 2007 19:13:44 -0400
The basic problem here is that even though Victorian-era-style capitalism was rejected 100 years ago, it's made a comeback under the last few administrations. Because the Neo-Victorians don't believe that the profit motive should be reined in by government, the result is that Adam Smith's "invisible hand" is around our throats and throttling us.]]> http://seekingalpha.com/article/30826-housing-and-subprime-no-documents-no-problem-until-now?source=feed#comment-83241 83241
Some things to chew on: 20% of current mortgages are subprime mortgages. Most of those are ARMs. Another 20% are Alt-A mortgages. Most of those are ARMs. ARMs work when real estate prices rise and you can refinance, using your new equity, before you get clobbered with the higher monthly payment. But if real estate prices don't rise, well, oops.

Something else I haven't seen mentioned: most subprime mortages are refinances, not new morgages. A lot of these are people who fell behind on their credit cards and decided to amortize those unpaid auto repair and hospital bills over 30 years. Another oops. And not just their personal problem -- every foreclosed house lowers property values for the neighborhood.

The rise of the stock market over the past 5 years has coincided with a rise in real estate prices over that period. One reason given is that people felt better off financially than they had been, and moved extra money into stocks rather than store it into safe money market funds. If they start worrying about their home equity, will they still be up for playing the market?]]> Tue, 27 Mar 2007 16:35:54 -0400
Some things to chew on: 20% of current mortgages are subprime mortgages. Most of those are ARMs. Another 20% are Alt-A mortgages. Most of those are ARMs. ARMs work when real estate prices rise and you can refinance, using your new equity, before you get clobbered with the higher monthly payment. But if real estate prices don't rise, well, oops.

Something else I haven't seen mentioned: most subprime mortages are refinances, not new morgages. A lot of these are people who fell behind on their credit cards and decided to amortize those unpaid auto repair and hospital bills over 30 years. Another oops. And not just their personal problem -- every foreclosed house lowers property values for the neighborhood.

The rise of the stock market over the past 5 years has coincided with a rise in real estate prices over that period. One reason given is that people felt better off financially than they had been, and moved extra money into stocks rather than store it into safe money market funds. If they start worrying about their home equity, will they still be up for playing the market?]]> http://seekingalpha.com/article/29035-ethanol-a-few-myths-debunked?source=feed#comment-82198 82198
It's particularly disturbing when the Brazilian model is followed, where they clear-cut forests -- which reduce CO2 -- and plant sugar cane instead.

Isn't the real answer to the greenhouse gas / air pollution problem to obtain power through means, like nuclear energy, that don't involve venting burnt byproducts into the atmosphere? Just asking.]]> Thu, 08 Mar 2007 13:14:39 -0500
It's particularly disturbing when the Brazilian model is followed, where they clear-cut forests -- which reduce CO2 -- and plant sugar cane instead.

Isn't the real answer to the greenhouse gas / air pollution problem to obtain power through means, like nuclear energy, that don't involve venting burnt byproducts into the atmosphere? Just asking.]]> http://seekingalpha.com/article/18404-china-s-oil-demand-in-perspective?source=feed#comment-70135 70135
In regards to refinining oil, I'm not sure where the "can't refine more oil" idea came from. According to industry sources, US refiners are at 93% capacity, which is not 100%. Also, that includes oil we're refining and shipping to Europe. Which brings up the point: refiners no longer have to be co-located with their users. The shipping industry has built and is currently building "product" tankers that can ship refined oil products anywhere.

- Eric Balkan
ericbalkan@yahoo.com]]> Sun, 15 Oct 2006 13:01:37 -0400
In regards to refinining oil, I'm not sure where the "can't refine more oil" idea came from. According to industry sources, US refiners are at 93% capacity, which is not 100%. Also, that includes oil we're refining and shipping to Europe. Which brings up the point: refiners no longer have to be co-located with their users. The shipping industry has built and is currently building "product" tankers that can ship refined oil products anywhere.

- Eric Balkan
ericbalkan@yahoo.com]]> http://seekingalpha.com/article/18404-china-s-oil-demand-in-perspective?source=feed#comment-69734 69734 Fri, 13 Oct 2006 09:29:25 -0400 http://seekingalpha.com/article/17070-why-the-west-needs-indian-outsourcing?source=feed#comment-64670 64670
- Eric Balkan]]> Tue, 19 Sep 2006 02:35:36 -0400
- Eric Balkan]]> http://seekingalpha.com/article/15968-amazon-and-overstock-s-new-headache-buycause-com?source=feed#comment-60627 60627 Is it a secret? It's not indexed by Google.

- Eric]]> Fri, 25 Aug 2006 17:33:52 -0400 Is it a secret? It's not indexed by Google.

- Eric]]> http://seekingalpha.com/article/15808-gold-bugs-don-t-dig-in-too-deep?source=feed#comment-59965 59965 Tue, 22 Aug 2006 09:55:32 -0400 http://seekingalpha.com/article/12750-who-loses-from-google-checkout-not-ebay-but-amazon?source=feed#comment-52576 52576 Sat, 01 Jul 2006 00:11:30 -0400