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.

I woke up this morning to a loud thud. No wait a minute, it didn’t really sound like a “thud.” It was more like an explosion…a nuclear explosion.

Suddenly I remembered what our Investment Director, Eric Roseman said a few months ago just as the markets seemed to be stabilizing and everyone was running back in to buy financial and bank stocks at these “unprecedented lows.”

Eric said: “Keep your powder dry…there’s another shoe to drop”

Well drop it has… and it fell like a nuclear bomb. The U.S.’s two largest mortgage lenders, Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE) have failed (or at least they WOULD have failed, if Paulson and Bernanke had not stepped in with “emergency finances”).

In any case, stick a fork in Freddie and Fannie…they’re as good as done.

The Great Actors on the Non-Existent Stage

I really have to hand it to our economic leaders… Treasury Secretary Paulson, Ben Bernanke, Congress and most of the CEO’s of mortgage and banking companies. They’re really, really great actors.

How many times can they get up in front of the public and read from their well-rehearsed scripts with straight faces? How many times can they lie to us? They tell us everything will be all right while they know, and are working on plans to the contrary.

How many CEO’s will drive “their” companies into the ground just to receive HUGE pay checks… and then smile into the camera and try to explain why they deserve the money, the country club membership and use of the company plane.

How many times will Treasury Secretary Henry Paulson testify (lie) in front of Congress? (By the way, if you haven’t watched this comedy show in a while you really should tune in!)

It’s not a little white lie like the ones you told your teachers. This is huge, and it affects so many people’s lives in so many ways. Yet they do it time and time again… looking straight into the camera.

These guys really should be allowed to compete for an Oscar… they’re a shoe in.

The Congressional delegates on the panel will huff and puff…they’ll interrupt the testimony and make believe they’re really trying to get to the bottom of this. The media will show sound bites of the harsh words flying back and forth and then we’ll get the usual statement

“We’re from your government and we’re here to help”

Oh please!

What to Do When You’re Tired of Waiting for the Truth

So what do we do? Do we shake our heads…wring our hands, complain to anyone who’ll listen and then do nothing? Or do we take back some control over our lives.

Politically, I’m really frustrated and don’t know how to change the mess we’ve gotten ourselves into but…

Financially, I do have a solution and can help.

First, stop listening to Paulson. Bernanke immediately, all the Congressmen and most of the CEO’s out there.

If their lips are moving… they’re lying.

Second, stop listening to most of the talking heads on the financial TV shows. Talk about double speak. I’ve never heard so much hedging in my life. “I said to buy it… I said to sell it… I told you this was the top… I was the first to call them bottom.”

Amazing how they’re never wrong.

Third, re-assess your investments. In this market, you really need to be careful. I’ve spent over 25 years in the investment industry. I’ve been a broker and an investor and 3 things I’ve learned over the years are: Take a deep breath, remind yourself of your longer term goals, and adjust your portfolio accordingly.

Are you diversified? Have you re-balanced? Do you really know what the heck you’re invested in?

If You Want Protection, Start With Your Serious Money

Let me help. Let’s talk about your serious money for a moment. Your retirement money…that IRA that constitutes the bulk of your savings. What are your plans for it? How do you plan to keep it growing faster than you’ll spend it?

Have you given it much serious thought lately? Not just some cursory quick pop into and out of your head. “Boy I really need to make sure I have enough money to retire on.” Have you made some real adjustments?

For starters, have you packed a few gold plays around your usual stocks, bonds and mutual funds in your IRA? Gold is the one safe haven commodity that will keep going higher during this market misery — particularly when Bernanke and Paulson are chartering about their “strong dollar policies.” (By the way, that’s double-speak for “Oh no, the dollar is falling again — but if we say this, maybe no one will notice.”)

As I said, Eric Roseman called this market turmoil back in February. And in case you don’t know it, Eric is also the original gold-bug. As he said in his latest issue of Commodity Trend Alert — “Gold is where I continue to place new money.”

Eric has recommended his Commodity Trend Alert readers be incredibly well positioned in precious metals since day one and is still calling for higher highs. Eric will be here tomorrow, to tell you all about his favorite metal. Make sure you tune in.

Source: And the Oscar Goes to: Ben Bernanke and Henry Paulson, for ‘Best Lip Service!’