Is the government creating another subprime-mortgage bubble?

The first time around, the three-headed federal serpent – the Bush administration, the Treasury Department and the U.S. Federal Reserve – used Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) to “legitimize” trillions of dollars worth of toxic financial waste known as subprime mortgages.

The result was the worst financial crisis since the Great Depression – a mess that was global in nature.

And we’re now headed for a repeat performance.

Some of the players may have changed since the first subprime-mortgage crisis, but the game apparently remains the same. With banks currently unwilling to lend, the new federal triumvirate of the Obama administration, the Treasury and the Fed are trying to inflate the moribund U.S. housing market. This time around, however, the FHA is the weapon of choice.

Obama & Co. are making an all-or-nothing bet that the

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Credit rating agencies are facing constructive criticism from the U.S. Securities and Exchange Commission (SEC). Recently, the rating agencies have been in news for providing inaccurate information about some securities to some clients. Now the market watchdog criticized a rating agency for approving the application of another agency, even though the former rating agency was suspicious about the authenticity of the financial information.

The SEC Inspector General David Kotz showed concern over this issue and expressed doubts about whether this could have been done in the public interest. SEC did not disclose the name of the rating agencies involved in this issue. Eleven big rating agencies including Moody’s Corp. (MCO), McGraw-Hill Company Inc. (MHP) and Standard & Poor’s are registered with the SEC and one of the eleven agencies may very well be involved in it.

On the other hand, SEC staff identified other credit rating agencies, whose applications were

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Upbeat headlines have been everywhere in recent weeks, and they all seem to point to a single conclusion: The U.S. economy is in the early stages of a very rapid recovery.

In fact, when you peruse the news it’s difficult to come to any other conclusion. For instance:

A number of key earnings reports have been much better than expected, and company executives buttressed those profit figures with positive comments about the next 18 months. The trading operations of Goldman Sachs Group Inc. (NYSE:GS) and JPMorgan Chase & Co. (NYSE: JPM) both just reported record profits. U.S. housing prices rose in May for the first time in three years. Initial jobless claims have plunged 15% since their April peak. The Conference Board’s Index of Leading Economic Indicators rose 0.7% in June, its third successive positive reading. And just ...

It’s a good day for robbing a bank – they’ve got money for a change! How fast the bankers redeemed themselves… just a few months ago, we were making jokes about them:

“What do you say to a banker who has lost his job on Wall Street?”

“Uh…can I have fries with that?”

But now they’re geniuses again. And they can prove it…just look at their pay stubs!

And if there’s any fear that these dumbbells might blow themselves up again, you can forget it. They’ve got the full faith and credit of the United States of American behind them. Here’s the latest from Associated Press:

“The watchdog overseeing the federal government financial bailout says the government’s maximum exposure to financial institutions since 2007 could total nearly $24 trillion, or about $80,000 for every American.

“The whopping amount compiled by the inspector general for the $700 billion Troubled Asset Relief Program takes into account about

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