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

Stocks stage huge rally, but will it hold? Key levels to watch, and some historic perspective… Libor continues to ease; famous Wall Street CEO explains why credit still isn’t flowing… John Williams on the “true cost” of the U.S. financial crisis, with charts to prove it… Byron King with an “exploding” foreign resource market…. Plus, a stinging critique of I.O.U.S.A., and one thing you must do before voting Nov. 4.

Take our quiz: Is the market even close to normal anymore?… Credit freeze continues to thaw… Mayer and Denning on what companies need to rebound… Home prices fall again, consumer confidence crashes, but market rallies? … Eric Fry on when this global financial trauma will come to an end… Plus, want a DVD copy of I.O.U.S.A.? Get the details below…

After deciding to nationalize Fannie, Freddie and AIG, Treasury Secretary Hank Paulson is considering setting up a federal government entity to hold banks’ debt. This from Reuters:

U.S. Treasury Secretary Henry Paulson has been shopping around a proposal to congressional lawmakers that would create an entity to deal with the bad debt, similar to what was done in the savings and loan crisis, a congressional aide said.

Forget Fannie and Freddie… The 5 packs the passport for a global economic roundup… Which three major euro economies will fall into recession by 2009… Russia desperate to buoy stock market… suggests pumping SWF dollars to save investors…China’s housing market takes a frightful turn… will the red nation go the way of I.O.U.S.A.?… Mexican billionaire makes contrarian bet on legendary U.S. organization… Byron King with an important perspective on oil prices, and oil headlines…

“U.S. stocks strike solid gains on second-quarter GDP,” ran a gleeful headline yesterday on MarketWatch.

“Investors, showing no sign of concern about the outlook, took the GDP report at face value and pushed stocks up sharply on the news,” ran another breathless piece of editorial, following data that showed U.S. GDP up 3.3% in the second quarter.

But as Addison Wiggan and Ian Mathias pointed out yesterday in Agora Financial’s 5. Min Forecast, the government’s stimulus check program and a weaker dollar were partly responsible…

U.S. consumer confidence is on the mend, we are told. The Conference Board Consumer Confidence Index rose to 56.9 for August from a revised 51.9 in July. This was a higher jump than forecast. The only problem is on the same day that the Conference Board came out with its jaunty view of the collective mind of American shoppers, ABC News spoiled the party by telling us that consumer confidence was at a record low for the week.

Another triple-digit swing for the Dow yesterday. The index shed 130 points a hefty jump in wholesale inflation brought Wall Street flighty optimism down to earth once again.

The Producer Price Index rose by 1.2% in July, more than double the expected rate. The rate for 2008 is now the highest level since 1981.

Who’s to blame? Addison Wiggan and Ian Mathias at Agora Financial’s 5 Min. Forcecast are pointing the finger at Ben Bernanke. The Fed has loaned, on average, $17.7 billion a day last week to US commercial banks - an all-time high.

Days after Bernanke pronounces the worst over, here comes another rescue package. Greenspan says, “It’s not my fault,” as if he hadn’t already made himself clear. Chris Mayer lays out his favorite “distressed” plays to BusinessWeek. Mainstream media picks up on our end-of-cheap-food theme.New commodity boom: Fast-food grease.