The FDIC is beefing up its staff in anticipation of more bank failures, reports The Dallas Morning News today. This doesn’t bode well for the insurer, says in David Newman in The Sovereign Society. The problem is the FDIC is running our of cash to fulfill its obligation to insure deposits…

U.S. stocks rallied on Friday. The Dow rose 1.7% to 11628.06. The broader S&P’s 500 climbed 1.1% to close at 1292.20. The Nasdaq closed 1.4% higher at 2414.71.

For the week, however, the Dow shed 0.3%. The index has now closed down four out of the last five weeks.

So what are investors to make of U.S. stocks? David Newman in The Sovereign Society says you can’t trust this kind of market for long. We’re in a secular bear market. That means a lot more pain for your portfolio if you don’t hedge your investments carefully…

The big debate on “The Street,” (besides whether we’re really in a bear market or not) is will the next move be bullish or bearish? And my answer is “Yes, the next move will be bullish and bearish.” (I know what you’re thinking: “Great, David…that’s a lot of help!”)

Right now, stocks look uglier than the Wicked Witch of the West having a Bad Hat Day. So what do you do if you’re convinced we’re in a bear market…and stocks may be at today’s levels two to three years from now?

Stricken twin mortgage giants Fannie Mae (FNM) and Freddie Mac (FRE) are making a surprise rally. Fannie added 19% to $10.93, after rising 31% yesterday. climbed 21% to $8.33 after a 30% gain yesterday.

So were rumors of their death really exaggerated? David Newman thinks not. Forget them, they’re as good as done.

How should you protect your investments? First off, don’t listen to Ben Bernanke or Hank Paulson – when their lips move they’re lying. Secondly, don’t listen to the talking heads on TV. Finally, diversify. If all your investments are in stocks and bonds, get a few fingers in the precious metals ‘pie’ too.