ECONOMIC ANALYSIS:

Thinking About Sisyphus

Bernanke, as the Chairman of the FED, is jogging on quicksand with leaden shoes. Anyone familiar with my columns knows that I am NOT a fan of the Bush administration, but Ben Bernanke is one of the few Bush appointments with which I approve. Following “Maestro” Alan Greenspan is a thankless task – in TRUMP spades. The only more difficult job is following “W” Bush in the Oval Office. Mistakes were made – colossal mistakes were made – but hindsight is always 20/20! The FED has limited ammo left in a crisis this gargantuan – and we are talking about financial losses in the TRILLIONS – maybe in the MULTI-TRILLIONS. This is a crisis about solvency, not liquidity. Drawing a line “in the water” and lowering interest rates, may buy time; but it will not fix a blasted thing. “Helicopter Ben” has a reputation to live down to. His actions thus far have reinforced myth.

Pick a market, any market. The graphs show the same 100 point + declines again and again - retrenching from false bumps engineered by market “fluffing” from any alleged-conspiratorial activity of a “plunge protection team,” the market makers of Wall Street, or the cash rich sovereign wealth investment funds - dumping their dollars. Is such not truly “the invisible hand” of a market correcting to some sane pricing of equities based upon historical multiples of earning per share (or their perceived future EPS)? Market graphs of late show a futile Sysyphus at work – up and back.

In an election year, the public is geared up for hearing - not the truth - but a song and dance. We have been exposed to both “eloquence” and - “trust me - I’ve got the experience and know how to get US/ us thru this.” Who has even specifically IDed what “this” is? Just what are their solutions - to the problems which they dare NOT even speak the names? Our next President will face hurdles of Olympian proportions. Are they nuts, or merely ODed on Prozac? (Beat me, hit me, kick me – more, more, more... I’m still not satisfied.) “Hello... I’m running for President, my name is... but just call me Sysyphus.”

I’m Fred Cederholm and I’ve been thinking. You should be thinking, too.

Copyright 2008 Questions, Inc. All rights reserved. Fred Cederholm is a CPA/CFE, a forensic accountant, and writer. He is a graduate of the University of Illinois (B.A., M.A. and M.A.S.). He can be reached at asklet@rochelle.net.