FDIC Economic Wizard Seidman Dies

On the heels of losing another famed Great American on the economic front in Jack Kemp, I was deeply saddened to learn of the passing of another as former FDIC chair and CNBC economics commentator Bill Seidman died today.

Seidman, 88, was a crafty veteran of the economic political theatre and was the chief architect of the Resolution Trust Company which rescued the real estate market decades ago. In fact, I recently wrote if he might be available to help us out yet again.

In an era lacking common sense, Seidman rose above the fray and fired out plain spoken intellectual rhetoric on the economic issues of the day. He forgot more than most knew.

I will certainly miss those segments on CNBC with Seidman. He was a great gentleman a a true titan in banking and economics.

The gang at CNBC mourn the loss, including Sure Herrara, Erin Burnett, Larry Kudlow and Jim Cramer.



Larry Kudlow, an old friend and colleague of Seidman, posted the following tribute:



With the passing over the last few weeks of Kemp and Seidman, the economics department up in Heaven has dramatically improved. Rest in peace Bill!

A Criminal Enterprise?

The TARP (Troubled Asset Relief Program) is already, albeit very quitely, out of hand. Larry Kudlow of The Kudlow Report on CNBC has very interesting discussion of the subject with famed economist Arthur Laffer, co-author of The End of Prosperity, former FDIC chair Bill Seidman and Peter Morici, economics professor at the University of Maryland.

For those who are arm chair quarterbacking this whole bailout thing, this would be a great discussion to wet your whistle. It also illuminates the basis of the what would generate the tea parties, highlighting how the governmental strong arm takeover of the banks is not behaving as it was indicated to us taxpayers it would.

The discussion also touches on Detroit, and how the "takeover" of GM will provide a vehicle for government to issue some sort of mandate for the company to produce cars the government want us to drive, not those we want to drive. This will quickly make this lifelong GM guy ask himself if he has driven a Ford lately?

Can you imagine fraud in the Congress? The discussion also questions an editorial in the Baltimore Sun, where it is outlined that some 20 criminal probes concerning TARP have been opened.

Take ten minutes out of your day to listen to Kudlow lead this worthwhile discussion with three top notch guests:

Stuff the Scam of the Stimulus

The United States currently finds itself at a very serious fork in the road, as legislation of an economic stimulus package is being rammed down our throat.

"A failure to act, and act now, will turn crisis into a catastrophe and guarantee a longer recession, a less robust recovery, and a more uncertain future," President Obama said.

A member of the Obama economic team is famed Harvard economist Martin Feldstein, who was a guest on FOX Business show "Happy Hour", with Eric Bolling, Cody "Wyoming" Willard and Rebecca Diamond. Grab your notepad and take a listen:


There is a video clip in there where Obama thinks cutting taxes on "working folks", will provide more of a stimulus than cutting taxes on the more wealthier citizens, who actually pay taxes, start companies that create jobs, thus trickling cash down the economic ladder to those who need a lift, not a handout. Even Feldstein says Obama's commentary is "a mistake".

Obama campaigned that he will not run Washington with politics as usual, but this package, written by the democratic leadership, is actually a spending package, one that will unnecessarily saddle our children with strangling debt. If we are in fact in a historic economic crisis, then pass legislation to simulate the economy. Instead, here is where some of the money is projected to go:

$246 million tax break for Hollywood movie producers to buy motion picture film.
$75 million for "smoking cessation activities" (Obama is a chain smoker).
$100 million for reducing the hazard of lead-based paint.
$850 million for Amtrak.
$160 million for "paid volunteers" at the Corporation for National and Community Service.
$400 million for the Centers for Disease Control to screen and prevent STD's.
$600 million to buy hybrid vehicles for federal employees.
$650 million for the digital television converter box coupon program.

Are you trying to kid me? This stimulus package is a fraud, and so is Obama and his arrogance.

This package should be defeated, and the congress should do nothing. That is right, NOTHING. Please take a look at the following 9 month chart of the S&P 500:

I have no idea what I am having for dinner tomorrow night, but it sure looks like the S&P 500 has put in a bottom and is well into a basing formation. So, I am of the opinion that if the government stays out of the way, the worst may be behind us. As you may know, the jobs numbers that are now getting posted, as horrendous as they are, are lagging indicators.

If the government must get further involved, I would recommend that we go to the root of the problem, and that is packaged mortgages leveraged at levels of reaching 50 to 1, which will bankrupt the best of all investors. First, lets refresh ourselves on how this got going in the first place:

If it is necessary for government intervention, the formation of a bad bank, or an organization similar in formation to the old Resolution Trust, should be formed. We might even be able to talk CNBC's Bill Seidman out of retirement to run the show. I had thought this was the original plan of TARP 1.

If properly implemented and executed, and that if is larger than the Goodyear (GT:NYSE) blimp, the federal government could grab these mortgages and remove them from the tainted banks books. By the way, have you noticed your little local bank on the corner is not a player in TARP. Yeah, me too. Therefore, some sort of repayment plan would need to be structured going forward with a time period component built in. This would allow these banks to resume "normal" operations, complete with market derived sensible lending practices, not those orchestrated by fraudulent organizations like ACORN. The government can then provide a backstop, sell mortgages to investors, hold them until inventories are exhausted and economic conditions are more favorable or disperse them on to the market at specified installments, perhaps absorbing losses along the way which would be a drop in the bucket to the current bailout philosophy. Tops among those lacking the intellectual strength to run this would be Barney Frank, D:MA.

Unfortunately, the spending package will pass. Down the road, many of you who voted for Obama can grab yourself the new rage in bumper stickers (spotted on Gateway Pundit). That would not be me!
Do you see it differently? Please feel welcome to share your thoughts.