Eric Balkan

http://ibrakefortrees.wordpress.com
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    • Wed Aug 15th 11:29 AM | Rating: 0 0
      Commented on:
      Cramer's Meltdown Spills Into Print
      I recall seeing a news article some weeks ago about a mortgage broker in distress selling their loan portfolio for 6 cents on the dollar. As Malkiel points out above, these loans and their derivatives are illiquid. So even though they will likely be worth more someday, if you need the money now, today, to stay in business, and you can't find a buyer, the value might as well be zero.

      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.
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    • Sun Aug 5th 18:38 PM | Rating: 0 0
      Commented on:
      The Plunge Protection Team Exposed
      I can agree that most conspiracy theories don't pan out, but they probably wouldn't start if there wasn't some unexplainable event that provides the seed for the theory. In the case of the Kennedy assassination, the Warren Commission was given the job of coming up with the simplest explanation, so as to avoid a crisis. E.g., before they did in-depth interviews with people on the scene, they asked these potential witnesses where they heard the shots coming from. If they said the Texas Book Deposity, they were interviewed. The 50 or so people who said the grassy knoll were never interviewed. That's how you start a conspiracy theory.

      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.
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    • Sun Jul 8th 17:21 PM | Rating: 0 0
      Commented on:
      13 Implications of the U.S. Current Account Deficit
      I thought this was a reasonably good post, up to the end. People are not working harder? I've seen two studies comparing the number of hours Americans work compared to workers in other developed countries. In one, we were #6, in the other, #1. Compared to Europe, we work more hours during the week and take much less vacation time. We even bring cellphones and laptops on vacations. No, the problem is not that people aren't working hard enough. (Sorry, but I just get ticked off when this myth gets passed around.)

      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...
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    • Mon Jun 11th 03:22 AM | Rating: 0 0
      Commented on:
      A Symbiotic Relationship Between the United States and China
      Why do people assume that the exporting of US jobs overseas will stop with manufacturing? What white collar jobs can't be done cheaper overseas? If exporting jobs to where they're cheapest is a good idea, then why don't we take that to its logical conclusion and export all jobs?

      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...
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    • Thu May 24th 18:33 PM | Rating: 0 0
      Commented on:
      Pressuring China On Exchange Rate Policy: Even When You Win, You Lose
      Attracting capital causes a trade deficit? Then China, the country attracting the most capital worldwide -- an estimated 70% of their economy is due to FDI -- should have the largest deficit.

      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.
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    • Wed Mar 28th 19:13 PM | Rating: 0 0
      Commented on:
      Housing and Subprime: No Documents? No Problem - Until Now
      I saw a news report the other day that the governor of Ohio, which is the state with the highest number of foreclosures, has proposed providing $100M to help prevent additional foreclosures. That's probably not enough, but I think it's the right idea.

      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.
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    • Tue Mar 27th 16:35 PM | Rating: 0 0
      Commented on:
      Housing and Subprime: No Documents? No Problem - Until Now
      It would be nice if bubbles didn't burst, but just deflated slowly. But the reason we use a bursting bubble analogy is because the situation goes from one extreme to another, i.e., from overbought to oversold. Sure, things will return to "normal", whatever that is, but we're likely to have a nice little crash first.

      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?
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    • Thu Mar 8th 13:14 PM | Rating: 0 0
      Commented on:
      Ethanol: A Few Myths Debunked
      Very informative article. But... the extract from Kholsa states that the right question to ask is greenhouse gas emissions per mile, and then the article doesn't answer that question. Agriculture produces nitrous oxide, a greenhouse gas 296 times worse than carbon dioxide, according to a Citigroup research paper, so the effect of increasing cropland would reduce the slim benefit gained in a switch from gasoline to ethanol.

      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.
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    • Sun Oct 15th 13:01 PM | Rating: 0 0
      Commented on:
      China's Oil Demand in Perspective
      Seem like we should be able to keep fact-free political opinions out of this discussion. There's an open question as to whether or not oil reserves can expand sufficiently to meet Asian needs. I've seen different numbers in this regard....

      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
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    • Fri Oct 13th 09:29 AM | Rating: 0 0
      Commented on:
      China's Oil Demand in Perspective
      Phil, where does that 10% come from? Sept imports are up 24% vs last year. And at least some analysts are saying this rate will increase. Marc Faber, for instance, says that, with cars now available for $3700 in China, vs $20K a few years ago, there are now 50 million Chinese who can afford a car vs the 1 million back then. (Though he didn't say when "then" was.)
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    • Tue Sep 19th 02:35 AM | Rating: 0 0
      Commented on:
      Why The West Needs Indian Outsourcing
      Depressing but not surprising. Sports therapists can't be outsourced. There's little incentive to become an engineer if you know that, upon graduation, you'll be competing with Indian engineers willing to work for $10K/yr.

      - Eric Balkan
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    • Fri Aug 25th 17:33 PM | Rating: 0 0
      Commented on:
      Amazon and Overstock's New Headache: BuyCause.com
      Their website still down? I brought it up in a browser and all I got were some email address links.
      Is it a secret? It's not indexed by Google.

      - Eric
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    • Tue Aug 22nd 09:55 AM | Rating: 0 0
      Commented on:
      Gold Bugs, Don't Dig In Too Deep
      "If Central Banks decide to lighten up on gold by just 10%," Have they said they would? The goldbugs seem to be thinking that Central Bank sales will increase....
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    • Sat Jul 1st 00:11 AM | Rating: 0 0
      Commented on:
      Who Loses From Google Checkout? Not eBay, but Amazon.
      I disagree that convenience is Amazon's biggest plus. Think about the user reviews. I know I personally always check the Amazon listings before buying something, anything, to see what other people have said about it. Other big plusses for Amazon are: free shipping over $25 from their own warehouse and $25 "gift" coupons earned with their credit card. Perhaps Amazon's biggest plus is that their management knows how to market to consumers.
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