Wassaap Wall Street?!! ... One year later.

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Believe it or not, today (September 19th) is the one year anniversary of the day I finished illustrating this cartoon for my Managing 2 Laugh feature in ValueRich magazine. At the time, Cramer was pitching fits on television for Fed Chairman Ben S. Bernanke to wake up and smell the impending subprime meltdown. Bernanke was, in a word, "detached" concerning the whole thing and held out for quite some time before he eventually started cutting rates. But after that, continued to cut them with abandon. Today, he's going around saying he's got $800 billion at his disposal if need be to bail out failing Wall Street institutions. Which is, of course, exactly what the third character in my cartoon wants. Back then, the Investment Banks and Funds were mainly lobbying Washington to have their $ billions in profits classified as capital gains rather than income. Now, they have Congress exactly where they want them ... soiling their pants, and are in line for bail outs at our expense.

Ah, life is so full of irony.

Subprime programming is now our reality show

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As editor of ValueRich magazine, I did a full-page cartoon series called Managing 2 Laugh. A recurring character in the series was Jonesy the Insult Wall Street Bull, a send up of Robert Smigel’s Triumph the Insult Comic Dog from the Conan O’Brien Show (I’m a big fan). Jonsey’s job was to basically point out the myriad insulting ways Wall Street, the financial media and government typically stiff-arm small business.

The most recent Jonesy episode was illustrated in August of 2007, when most of us were just beginning to get a whiff of how serious the subprime mortgage fiasco could get. CNBC and many other financial media outlets were still shining a rose-colored light on the whole thing, with the exception of Jim Cramer who famously exploded in Erin Burnett’s face over inactivity from Fed Chairman, Ben Bernanke and comments made by St. Louis Fed president William Poole. “He has no idea how bad it is out there!”

You could see all the sides lining up to play it to the hilt. Cramer, who claims to be on the side of small investors, was spitting and screaming for an investment bank bailout. Of course, as he actually said on the air, a big reason for this is that he was “getting calls” from buddies within the big hedge funds and banks.

These are the same hedge funds and investment banks who provided a speculative market so that mortgage companies and commercial banks could easily absolve themselves of application vetting risks by reselling the loans. They were already lobbying hard in Washington to keep tax breaks on their incredible profits. All they had to do was call their lobbyists and tell them to quickly change the pitch to “save our homes.”

Poor Ben Bernanke, who had just taken over from former Fed Pope Alan Greenspan, was caught in the middle. Being new to the position and anxious to establish his own gravitas, he probably figured he’d push back against cries for action from these large special interests, but as we now know, that wouldn’t last long.

Believe me I’m no market expert. But human nature being what it is, I saw the train coming down the track … hence this cartoon.

It’s interesting to look at the cartoon now and see where we are today … The once reticent Fed has now pumped so much money into the economy that we might as well call the dollar the peso … Bear Sterns is being acquired for cents on the dollar with government backing … former Fed Pope Greenspan crying, “It wasn’t me.” The repercussions keep a poppin’ every day.

And where does this leave us middle class small investors? Who knows? If I had to bet, my wager would run counter to what they’re saying on CNBC right now, that the market is bouncing off the bottom and we’ll be making a comeback sometime within the next year. My bet would be that, right after the election is over in November, all the Fed’s unaffordable propping up is going to go away and the bottom is going to drop further than ever. Think about it. What incentive will there be to keep it going? Wall Street’s positions will certainly be covered by then. We’ll have a new regime in Washington who can’t be blamed … human nature.

What do you think?

I think it’s time to blow the C harp and sing the blues. Xcuse me while I whip this out:
Whaaaaa-awhaaaaaa
We saw this train a comin,’
Comin’ down the track.
Now that it’s done got here,
It’s hard to push it back…

Small-caps in South Beach... Now that's sexy!

It's 33 day's until the next ValueRich Small-cap Financial Expo in Miami (March 27-28, 2007) and I can hardly wait.

ValueRich Expos are very high energy, financial networking events that feature 50 small-cap public companies to an audience of roughly 1,000 buyside and investment banking professionals. The CEOs and management teams of the companies are available non-stop at office-like exhibition areas throughout the event and they also make Web cast financial presentations.

Beyond that, we have plenty of lavish networking and social activities. This year, we're taking the whole group to the famous Shore Club at South Beach. The Florida Marlins Mermaids will be on site throughout the event ... last year it was the Dolphins Cheerleaders (see myself and my beautiful wife Kayla with them above). And we will have a special guest actress who is our new iValueRich.com spokesperson on site as well.

If you are an investment banker, fund manager, money manager, institutional investor or public company officer, you owe it to yourself to join us in Miami ... even if it is just to see how it's possible to really create excitement and results around micro- and small-cap companies. And make some great connections and have a good time, of course.