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!

Obama Wealth Destruction

With good reason, many individuals from various walks of life are second guessing casting their vote for Barack Obama, who essentially has created war against small business and the investor class; prosperity for that matter.

A famous voice on Wall Street and Obama supporter, CNBC's Jim Cramer, made a plea on his nightly show Mad Money for Obama to change course on his economic policies before it is too late. Take a listen:


Over at NBC News, where the love fest with Obama continues daily as the stock price of their parent company, General Electric (GE:NYSE), continues to cliff dive, correspondent Tom Costello, a former CNBC reporter himself, fires some questions at Obama Press Secretary Robert Gibbs, who is fresh off an altercation with CNBC reporter Rick Santelli, and Gibbs continues his assault on CNBC, and thus us, the investor class: Listen up:



The destruction of wealth since Obama's election has been beyond alarming. Considering the uncertainty he is imposing on the market through seemingly daily and erratic governmental interaction and regulation and his astounding lack of economic knowledge, particularly with respect to role capital investment plays in providing the fuel needed to ignite and engage the expansion of economic progress, it is easy to see why Wall Street is in full scale retreat.

As Cramer accurately points out, "Hey it's amateur hour at our darkest moment." Make no mistake, Wall Street is Main Street. If you aim to destroy Wall Street, the collateral damage will be no doubt found on Main Street. Look around!

The Great American Ponzi Scheme

The unique perspective of Investors Business Daily's Pulitzer Prize winning cartoonist Michael Ramirez is once again on the pulse of America in timely fashion.

Much of the media if focusing on the abhorrent theft of fund manager Bernie Madoff, and rightly so. The scope of his fraud, inclusive of many charities and high profile investors such as Larry King, Kevin Bacon, Norman Braman (former Philadelphia Eagles owner and car dealer), Morton Zuckerman (through investment fund) and The Royal Bank of Scotland, is mind boggling.

As incredible as this is, there is another giant ponzi scheme looking to burst, and President Bush has warned us about it and requested legislation to curtail it, of which he has got none from our do nothing Congress, before the ship has left the dock. Others, such as David Walker of the Peter G. Peterson Foundation, have been sounding the alarms for quite some time.

CNBC's Jim Cramer takes a whack it. Lets see what he says:

Ladies and gentlemen, it is our own Social Security System. Estimates say about 2040 it will blow up and life as we know will never be the same. If you are under 40, I recommend you invest for retirement as if you will get nothing from the system. Caveat Emptor!

The Sky Is Not Falling

If you are an investor in the stock market and you are not reading Investors Business Daily, you are operating with one hand tied behind your back. Not only is the proprietary stock analysis top notch, but the editorial page is emerging as the nations best.

The IBD editorial page today ran part one of a two part series on our current economic situation and investigated potential parallels of the Great Depression. In the IBD table presented below, we appear to have already had it. The graph shows another 4 years of meandering, which seems to me to signal a non growth, high tax Obama administration. The market has trouble moving forward when the opportunity for growth of companies, thus individuals, is handicapped.

The market actions of the last several weeks are intriguing. Governmental interference is not welcomed, as the DOW has dropped almost 2000 points since the bailout, which we were told was going to prohibit total economic collapse, was proposed. The significant wild swings and massive bottom diving is characteristic of a bear market ending. Everyone, not just the investment community, is sick to the stomach and wants nothing, I mean nothing, to do with the market. The sickness has apparently gotten hold of CNBC's Jim Cramer.

I do love my boy Chicken Little, but contrary to media reports, the sky is not falling. Although I do not know what I am having for dinner tonight, I am compiling a list of stocks with strong relative strength through researching the IBD stock tables. Let the market dictate, not the emotional headlines ruling the day. October surprise anyone?

They Know Nothing

On CNBC's Stop Trading with Erin Burnett a year ago today, Jim Cramer absolutely lost it while discussing the subprime mess.

And what a mess it is. Cramer is just great entertainment and Bear Stearns, trading 109 on this day, is now a morsel of JP Morgan. Since then, the FED has cut over 300 basis points and difficulty in acquiring credit remains at extreme levels as we continue to wring out these excesses and absorb the existing housing inventories.

Message of the Markets: Noise

The confirmed rally is staggering right now in what may be an effort to shake out some investors. The DOW is the most damaged chart of the indices but refuses to cave in even with bad news screaming everywhere. I have not bailed as of yet. Today, the GM shareholders meeting ruled the day, but yesterday it was rumors that another shoe was set to drop on the financial front, more specifically Lehman Brothers (LEH:NYSE).

This would be troublesome as it would signal that the money center banks still have not got a handle on losses triggered by the subprime lending debacle. Financials continue to be crushed, with Lehman showing the way. But, is it just noise?

Noise is a major factor in market action, and rhetoric tossed out by guest analyst can leave your head spinning.

For example, I fondly remember analyst Jerry Favors back in the day calling for an intermediate top in the March 20-23 range which could be significant. He was often on target, but I think he was tossing darts at some zodiac board. I recognize there are theories based on dates people subscribe to, but I found it more entertaining than substantive. Jerry, unfortunately, passed away in 2006.

Everyone seemed to be bullish during the dot.com boom, except, of course, Bill Fleckenstien, who as Gary Kaultbaum said, has been bearish since Noah's Arc. Analysts showed up daily, singing the praises of the bull as everyday folks were hanging in getting crushed.

Perhaps the top perma-bull of the day was Joe Battapaglia, formerly of Gruntal and now with Stifel Nicolaus. In all the interviews I saw, I recall him staying bullish on each leg the NASDAQ took down. Now, Battapaglia, frequently a guest on Kudlow & Company on CNBC, is leading the bearish parade. I find it hard to place any weight on his comments, but he probably knows something I don't. I just nestle up with IBD.

The market will give you the message you are looking for. Certainly, there are great analysts out there, and I am a fan of Jim Cramer like the rest of you. But, had you listened to many of these folks without doing your own due diligence, you could well be under water. So, you should proceed with caution when investing, do your homework and discard all the noise while performing your own due diligence. Without question, that includes anything you read here on the blog. Hope you find the next cup and handle!