In normal times the second-largest U.S. bank failure in history would be the lead story in the mainstream media.

But we’re not living in normal times, says Dan Denning in The Daily Reckoning Australia. What we’re experiencing is a financial quagmire caused by the loud popping of an unprecedented credit bubble.

The collapse of IndyMac (IMB) has been overshadowed by the threat of insolvency at Fannie Mae (FNM) and Freddie Mac (FRE). The rescue plan for the twin mortgage giants is nothing more than backdoor nationalization, says Dan. Expect runaway inflation as a result of the government’s meddling…

The news on the Street is not looking good. The Fed, it seems, is spoiling the party. Few expect it to slash rates further.

Then there’s oil. The black goo rose 87 cents to $137.61 a barrel in electronic trade this morning.

MarketWatch has S&P 500 futures down 6.5 points to 1,311.80 and Dow industrial futures down 54 points.

Dan Denning in The Daily Reckoning Australia expects a ‘highly differentiated’ performance in stock markets for the rest of the year.