18 banks have gone under so far this year. But how do you know if yours will be next? Keith Fitz-Gerald says the IRA Bank Industry Stress Index can be used like a financial X-ray to see what’s really going on in the banking sector.

Governments are hosing down the markets with bailout money. Central banks, meanwhile, are making sure the cost of borrowing is as close to zero as possible. We smell another bubble in the making…and another inevitable crash. Talk about priming the pump for the next bout of excessive exuberance.

U.S. stocks futures fell this morning despite yesterday’s barnstormer rally and heavy hints of a further rate cut by the Fed. “S&P 500 futures dropped 21 points to 917.70 and Nasdaq 100 futures fell 32.5 points to 1,275.50. Dow industrial futures dropped 200 points to 8,889.00,” according to MarketWatch.

Yesterday, US stocks soared. Today, Asia followed. Europe is up. More gains are on the table in the US.

Who can we thank for the jump start in equities? The mainstream press is tripping over itself to hail the efforts of our dearest leaders. Political titans like Silvio Berlusconi, Gordon Brown, Hank Paulson and, of course, George Walker Bush.

Bill Bonner is more skeptical. He says a bear market bounce is not cause for celebration; it’s cause for selling. Bill reckons the Dow will hit 5,000 before long.

The Fed held rates steady today following its FOMC meeting. It was a unanimous decision.

Many market players had anticipated that the Fed would cut rates to help ease the deep liquidity crisis facing Wall Street.

The Dow fell about 100 points on the Fed’s announcement. The index had already risen index by 105 points and plunged by 175 in a tumultuous day of trading.

In late afternoon trading the Dow was up again nearly 84 points.

Everyone assumed that the government would ride to the rescue of doomed brokerage Lehman Brothers (NYSE:LEH). Everyone was wrong. The financial markets are close to ruin. But there is a bright side, says John Stepek in British financial magazine MoneyWeek. The remaining players now know that not everyone is too big to fail…

We know bad things happen to common shareholders of companies blighted by greedy management. Companies like Enron, Tyco and Worldcom. Eric Fry at Rude Awakening says you can add the names Lehman Brothers (NYSE:LEH) and Merrill Lynch (NYSE:MER) to this list.”Greed and capital preservation don’t seem to mix very well,” says Eric. And the bonus system on Wall Street ensures that greed is the numero uno driving force driving the system…

– If the stars of yesterday’s going were toxic mortgage twins Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE), Lehman Brothers (NYSE:LEH) put in a damned good supporting role. Traders pummeled the bank’s stock after a proposed investment deal with a Korean bank fell through. Lehman’s shares dropped 45%. Lehman wasn’t the only Wall Street bank to fare badly. Financial stocks overall tumbled more than 6%.

– This morning, the bad news continued for Lehman. It told Wall Street it will post a second straight quarterly loss but promised to slim down in the future, putting an end to a brief pre-market rally in its shares.

Several data releases last week - including new home sales, durable goods orders and GDP growth - signaled an improvement in the U.S. economy. But Rick Pendergraft in Investor’s Daily Edge says it is important to distinguish between stabilization and reversing course. A huge backlog of unsold houses and ongoing job losses will keep the economy on shaky ground for the time being…

Big banks don’t trust each other in the post-Bear Stearns market, and lending across the financial system is drying up.

This tighter credit environment is hitting money supply. Last month, money supply actually shrank - it grew at under the rate of inflation.

Charles Delvalle at Investor’s Daily Edge says this means investors should now expect deflation to hit asset prices.

This echoes Bill Bonner’s recent warnings about the risks of a coming deflationary slump in the U.S…