U.S. stocks soared yesterday (Tuesday) – with the Dow Jones Industrial Average gaining 485 points in posting its third-biggest point gain ever – as investors surged back into stocks just one day after the surprise rejection of a $700 billion bailout plan touched off a record sell-off.

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…

This week, FDIC chair Sheila Blair said the insurance fund might have to borrow to cover the nation’s bank failures.

The FDIC’s $53 billion simply isn’t enough to cover the assets held by the growing number of “problem” banks. The FDIC’s list has increased from 90 at the end of March to 117 in June. Total assets affected now stand at $78 billion.

If even a portion of the these banks go under, says Adam Lass in Taipan Daily, the XLF December 20 puts (XLF XT), which track the S&P 500’s Financial Select Sector, could gain of some 52%. A big number of failures could send these options up 79%…

Imagine waking up on a sunny Saturday morning to find you can’t use your debit card to buy groceries or pay for gas any longer? You can’t withdraw a single dollar from the ATM. And your bank froze your credit cards.

Once again, the entire world tuned in for the Fed-sponsored dog and pony show this week. As usual, the Fed’s meeting managed to slow market activity before the FOMC decision, and then (drum roll please)…

As you know, the biggest banks worldwide have owned up to enormous losses, now more than US$300 billion and still counting, over the last year. That includes the failure and bailout of the fourth largest U.S. investment bank, Bear Sterns.

Say what you may, you certainly cannot accuse Hillary Clinton of inflexibility. Following the Democrat motto of “Do as I say, not as I do,” the Clinton campaign has become a living kamasutra of moral contortionists — a migrant carnival of double-jointed confidence artistes whose spectacular limberness would normally earn someone a place in Ripley’s Believe it or not!