American optimism at all-time low, 2009 recession imminent… Fannie and Freddie to the rescue? Chris Mayer with good news for oil investors. Another day, another double-digit decline… Russian market, currency plummeting. Pat Cox with a “huge” breakthrough medical tech about to become reality. Have we hit a nerve? The automaker debate rages on in The 5’s inbox

Oy. “The $700 billion financial bailout program,” the New York Times sums up Treasury Secretary Paulson’s speech this morning, “will not be used to buy troubled mortgage-backed assets, as originally intended. Instead, capital would be provided directly to nonbank companies, as well as banks and financial institutions, and that more would be done to prevent home foreclosures.”

Is it any wonder 83% of Americans think the U.S. is “headed in the wrong direction”?

American optimism at all-time low, 2009 recession imminent… Fannie and Freddie to the rescue? Chris Mayer with good news for oil investors. Another day, another double-digit decline… Russian market, currency plummeting. Pat Cox with a “huge” breakthrough medical tech about to become reality. Have we hit a nerve? The automaker debate rages on in The 5’s inbox

Oy. “The $700 billion financial bailout program,” the New York Times sums up Treasury Secretary Paulson’s speech this morning, “will not be used to buy troubled mortgage-backed assets, as originally intended. Instead, capital would be provided directly to nonbank companies, as well as banks and financial institutions, and that more would be done to prevent home foreclosures.”

Is it any wonder 83% of Americans think the U.S. is “headed in the wrong direction”?

DR readers might have been alarmed to read Dan Amoss‘ warning in yesterday’s edition that, “Some in Congress are floating a proposal to steal your 401(k), sell the proceeds, and invest in ‘government-guaranteed’ retirement accounts.”  Alarming especially to folks reading about it for the first time.  So let’s go into a little more depth.

This blog was among the first to warn last month about a proposal to wipe out the tax advantages of 401(k) plans.  During the last week or so, probably because of Mr. Obama’s election, this has caught fire on the Internet.  And like many things that catch fire on the Internet, people are inclined to present the issue in the most dire form imaginable.  So a plan to wipe out the tax advantages of 401(k) plans has morphed into a plan to “confiscate” 401(k) accounts — probably because Argentina’s government did something similar a

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

Here’s a curious development that may be worth watching: Bloomberg is suing the Federal Reserve.

Last week, we took a look at the Fed’s bulging $2 trillion balance sheet. And if you’re a long-suffering 5 Min. reader, you know our futile recounting of the weekly Fed lending programs… all the abbreviations and acronyms: TAF, TSLF, PDCF, CPFF, TARP, etc.

Well, the folks at

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.

The Dow logged its second best one-day point gain, 889 points, in its even more storied history yesterday:

Percentage wise, at 10.8%, the rally ranks sixth. The S&P and Nasdaq trundled alongside the old lady like puppies.

After finding a new “credit crisis” low on Monday, traders on Wall Street snapped back with vengeance. But it’s not the higher highs we’ll

Last week, market volatility reached record levels. Dan Amoss says the wild gyrations in stocks are the result of hedge funds liquidating assets to cover their highly-leveraged positions. This means some good firms — especially those providing vital functions in the food and energy markets — are now massively undervalued.

More from Penny Sleuth:

Congratulations on making it through yet another week of panic, margin calls, and forced selling! If you’re surviving, and you’re not down too much this year, you’re better off than most money managers.

Out of the thousands of hedge funds in existence, hundreds are closing up shop and liquidating, if the past weeks’ trading action was any indication.

Many of these hedge funds should never have been started to begin with, because their illusory gains during the credit bubble were too often made with leverage, rather than analytical talent.

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Recommend Plays That Go Up Even When the Market Goes Down

One

“In my view, the oceans of new fiat money will chase scarce assets: energy and resources,” says Dan Amoss in The 5 Min. Forcast. “It will stave off the deflationary depression scenario, but not re-inflate the credit/housing bubble. This means the biggest reversal in resource stocks in history is likely soon.

It remains to be seen whether fear takes control of the markets again today. So far, global equities have seen a reprieve from the brutal pounding they suffered last week.

The crash in stock prices has most investors spooked. But it's worth keeping you head while others lose theirs, says Strategic Investment editor Dan Amoss.

Right now, there are some very healthy resource stocks are shockingly cheap. What Dan calls "screaming bargains."