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04.16 'That Backfired': Watch Bernie Sanders Counter Right-Wing Talking Point, Make Case for Medicare for All on Fox News

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04.16 Scientists Unveil World's First Human Heart 3D-Printed From Patients' Own Cells

04.15 What It Was Like to Have a Baby in Sweden

04.14 'Shut the country down': British climate group Extinction Rebellion heads to US

04.13 With Youth Climate Actions Backed by Leading Experts, Latest Round of Protests Highlights Call for Bold and Urgent Action

04.11 Will You Rise Up for Climate Justice Next Week? Don’t Let Fatalism and Cynicism Hold You Back

04.11 300+ Groups to Congress: #GreenNewDeal 'Must Transform Our Food System and Revitalize Rural America'

04.10 Glaciers and arctic ice are vanishing. Time to get radical before it's too late [Willfully ignorant "conservatives" and corporately-bribed liberals diddle self-obsessively while life on earth dies]

04.10 Is there a beautiful, briny solution to the world’s clean water crisis?

04.08 'The perfect storm': hydrogen gains ground on LNG as alternative fuel [Good!]

04.08 Himalayan glaciers on the eve of destruction

04.08 Russia moves to free nearly 100 captive whales after outcry [Good!]

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04.16 How Progressives Can Fix the Progressive Income Tax

04.16 Why the US Elected a Despot, and Why It's Poised To Do It Again

04.16 'This Is a Big Deal': Warren Vows to Ban New Leases for Fossil Fuel Drilling Offshore and on Public Lands

04.15 'We're not a dump' – poor Alabama towns struggle under the stench of toxic landfills

04.15 Bernie Sanders Accuses Liberal Think Tank of Smearing Progressive Candidates

04.14 Cummings moves to subpoena Trump financial records

04.14 'Shut the country down': British climate group Extinction Rebellion heads to US

04.14 Progressives Urge Democratic Leaders to Fight Back Against '200 MPH Right-Wing War Machine' Targeting Ilhan Omar

04.14 Why Conservative Attacks on an Out-of-Context Ilhan Omar Quote Are Dangerous

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04.16 Our Zero Emission Future [Be smart or life dies]

04.16 'The Time for Excuses Is Over': Extinction Rebellion Protests Shut Down European Cities

04.16 The Trump-Netanyahu Alliance

04.15 The Guardian view on Extinction Rebellion: one small step

04.15 Only rebellion will prevent an ecological apocalypse

04.15 Thousands join Extinction Rebellion protests across London

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04.14 World leaders ignore David Attenborough at their peril

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04.14 Finland election: voters may pick first leftist prime minister in two decades

04.14 Rape and abuse: the price of a job in Spain’s strawberry industry?

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  Thinking About Transparency
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COMMENTARY:

Thinking About Inventories

by Fred Cederholm
We don’t have a clue what the summation difference is between market value and the outstanding mortgages. Are they multiple BILLION underwater, or mega TRILLION?
I’ve been thinking about inventories. Actually I’ve been thinking about Christopher Columbus, the Obama stimulus putsch, housing, and unemployment. An inventory refers to a categorical listing of things. It can be used by an individual, business, or governmental unit to take stock in what is available for consideration in making their forward moving decisions. It is an accounting of items at a snapshot in time - a benchmark reckoning. After all... how can you plan for where you are headed, if you don’t have an inking of what you’ve got on hand when you started out?

You see Christopher Columbus “knew” where he wanted to go, and what he wanted to accomplish. He just wasn’t certain where he was... relative to his goal destination. When he started out, he lacked an honest sense of direction – he forged ahead. Progress was in days transpired. When he “arrived,” he really didn’t know where he was. When he returned and claimed success, he really didn’t know where he had been. And... he did all of it on borrowed money! Sound familiar? Humm!

Planet Earth is about to undertake similar voyages of collective discovery. The major global economies are looking at a systemic meltdown - economically, financially, and monetarily. All are embarking on their individual quests to fix “their” messes, yet few are considering what the impact of any successes (or failures) will have on the rest of the group. All “talk” about the astronomical costs, yet none have “inventoried” (or accurately quantified) those impending costs behind their malaise/travails. Since the US economy has been the driving force behind the world’s consumption of goods and services, Uncle $ugar’s recent apocalyptic downturns and the newly installed Obama Administration’s stimulus planning are under the microscope and the spotlight of all global parties.

As snips and snippets of the Obama team intensions leak out, it becomes clear that the economic crises (and the costs of resolution/turnaround) are escalating on every front. The numbers still continue to grow, we have yet to see any progress from the TRILLIONS spent to date from the previous administration, and we don’t have a clue as to the ultimate costs and polices ahead. Housing, unemployment, and consumption HAVE been IDed as central targets for the stimulus. Yet, do we know where we are as far as the bottom? In a word... NO! The Administration is pushing hard to begin their turnaround, but toward what end? And... to what definition of “success?”

A comprehensive inventory of non-performing loans at the major US banking/financial giants, including the GSE’s Fannie, Freddie, and Ginnie has not been performed! They have tapped into 100s of BILLIONS of assistance to date, and are now returning to the public coffers for more. We don’t have a clue what the summation difference is between market value and the outstanding mortgages. Are they multiple BILLION underwater, or mega TRILLION? As more properties default into the resale market and prices continue to drop, what is the growth in deficiencies (losses) for each 1% decline in resale market value(s)? If those inside the Administration, the US Treasury, or the FED know, they certainly aren’t telling the public! Without such quantification, I strongly suspect we are only ONE-THIRD to the Real Estate bottom. We've seen a majority of the Sub-Primes loans unwind, the Alternative-A category is only beginning, and the Lion’s share of the negative amortization interest only ARM’s looms on the horizon. ONE THIRD may be a correct presumption.

The Obama team has (for now) upped their job creation goals to 4 MILLION new jobs in two years. Employment fell by 1.9 MILLION in the last four months of 2008. We are now looking at losses of 500,000 to 600,000 a month for 2009. Do the math, is this enough? The Obama plan calls for mega buck infusions for infrastructure to create jobs. Such may work fine for those unemployed from the construction sector, but what about those from banking/Wall Street, retailing, mfg, and services? How “equipped” are they to build roads, bridges, schools, railroads, airports, and the like. What ARE the skills of our unemployed? Then too, how many of them are the newly “green carded” (or illegal) aliens matriculated into the US economy during the boom years? What is our responsibility for them?

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. –

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This story was published on February 2, 2009.

 

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