Is the government creating another subprime-mortgage bubble?

When it comes to the U.S. credit crisis, we’ve all heard the numbers. The stock market decline wiped out $7 trillion in shareholder wealth. It forced the federal government to commit to $11.6 trillion in bailout programs and stimulus spending. And it’s led to the longest U.S. downturn since the Great Depression.

When it comes to the U.S. credit crisis, we’ve all heard the numbers. The stock market decline wiped out $7 trillion in shareholder wealth. It forced the federal government to commit to $11.6 trillion in bailout programs and stimulus spending. And it’s led to the longest U.S. downturn since the Great Depression.

A new Federal Deposit Insurance Corp.  (FDIC) plan to offload busted banks to vulture investors strikes an uneven balance between private equity players and public taxpayers and may inadvertently sow the seeds for another round of bank failures.

With its regulatory overhaul of the U.S. financial system, the Obama administration has granted the federal government new powers to take over systemically important businesses, but has done so in a way that may well mask a potentially dangerous drift toward American state capitalism.

U.S. Treasury Secretary Timothy F. Geithner says the Obama administration’s overhaul of U.S. financial regulations is aimed at creating a “boring” financial system.  But after President Barack Obama unveils this boring – and not-so-new – regulatory structure tomorrow (Wednesday), expect a pitched battle that will pit the interests of Wall Street players against those of everyday Main Street investors.

While the entire U.S. housing market was on the verge of collapse and corporate America was being systemically undermined, regulators purposely looked the other way.  Why would they do this?

Not a fan of socialism? Me either. But, if the federal government has to backstop free market excesses with taxpayer dollars, how will it eventually unravel the veil, or tarp of intervention? Or should it? The answers are about to unfold before our eyes.

The recent stock market rally may not be a bear-market trap or a “dead cat bounce,” but may in fact be the first signs of dust from an oncoming and unexpected bull stampede.

It’s called the “Shadow Fed.” And it’s the next potential hot spot in the ongoing financial crisis. But few outside the Federal Home Loan Bank system, the Federal Deposit Insurance Corp. (FDIC), the U.S. Federal Reserve and the U.S. Treasury Department are remotely aware of the problems that are smoldering.