Local Stories, Events
Ref. : Civic Events
Ref. : Arts & Education Events
Ref. : Public Service Notices
Books, Films, Arts & Education
Ref. : Letters to the editor
Health Care & Environment
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]
News Media Matters
US Politics, Policy & 'Culture'
Economics & Corrupt Capitalism
04.09 Neoliberalism promised freedom – instead it delivers stifling control [Walmartization]
International & Futurism
04.16 Our Zero Emission Future [Be smart or life dies]
04.15 Fear and despair engulf refugees in Libya's 'market of human beings' [EU policy should more directly minimize factors creating immigration. Essential infrastructure projects and jobs are desperately needed for villages in poverty, most especially including renewable energy, clean water and waste managment.]
Thinking About Inventories
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 firstname.lastname@example.org. –
Copyright © 2009 The Baltimore News Network. All rights reserved.
Republication or redistribution of Baltimore Chronicle content is expressly prohibited without their prior written consent.
Baltimore News Network, Inc., sponsor of this web site, is a nonprofit organization and does not make political endorsements. The opinions expressed in stories posted on this web site are the authors' own.
This story was published on February 2, 2009.