The Fed’s first credit crisis lawsuit… who’s suing and why, AmEx, Fannie Mae unload more financial follies… government “fixes” problem with more taxpayer dollars, Chris Mayer with a credit crisis byproduct (and opportunity) that could affect the entire world, China announces big stimulus plan… so why did commodities fall? A hefty chink in Dubai’s armor, Plus, Dan Amoss with a once-favored investment theme due to be back in the spotlight soon

Fannie Mae (FNM) and Freddie Mac (FRE), the mortgage giants taken over by the federal government back in September, will lower monthly payments for hundreds of thousands of struggling U.S. homeowners as part of a plan to accelerate anti-foreclosure efforts, federal officials announced yesterday (Tuesday).

The China good feeling dissipates…  Currencies lose their edge…  Fannie Mae needs more!  Silver manipulation? And Now… Today’s Pfennig!

Government bailouts for private banks are having a strange impact on bond markets, says Andrew Gordon. Fed guarantees have investors swapping traditionally safe government sponsored enterprise bonds for corporate bank bonds.

Thrift lender IndyMac (IMB) has become the fifth U.S. bank to go belly up this year. It’s one of the the largest U.S. bank failures ever. This from MarketWatch:

The Federal Deposit Insurance Corp. said in a statement it will take over operations of IndyMac, which will open for business on Monday as IndyMac Federal Bank. The thrift - the fifth U.S. bank to fail so far this year — had total assets of $32.01 billion as of March 31.

Much of IndyMac’s business was built on Alt-A single family mortgages, which were often made to borrowers with poor credit.

Bill Bonner says the world as we know it is finished. We are entering a new era of inflation and dollar weakness, and it’s here to stay. Even T-bonds aren’t a safe haven anymore…

Everyone is perfectly happy to let capitalism do its stuff – as long as they like the results. But cometh a correction and all of a sudden the press is full of whining pundits and meddling politicians.

You can’t blame Fannie Mae for trying. Last year saw British property buyers snap up around 20,000 homes in the United States.

Fannie Mae is supposed to be prime, but it turns out that much of its loan book is made up of less than perfect credit.

Forbes reports that yesterday “Fannie Mae executives told analysts that 43.0%, or $946 million, of the $2.2 billion in losses incurred during the first quarter involved Alt-A loans. They also said that the company’s ‘Alt-A book will continue to drive an outsize portion of our overall credit losses.’

Reading this Bloomberg story about the increasing demands being made on the Fed, I couldn’t help but think of the theme song to the vintage TV series “Car 54, Where are You?”