It’s panic time for U.S. legislators, regulators, banks and lenders. More than $24 billion worth of adjustable-rate mortgages (ARMs) are expected to “re-set” to higher interest rates in November – boosting the likelihood of further home foreclosures.

And it gets worse. That increase in borrowing costs will spread to other parts of the global debt market, representing an across-the board threat to corporate, institutional and sovereign borrowers. If interest rates remain high and interbank lending remains tight, the credit crisis is not likely to recede.

This raises two key questions. Are desperate times prompting desperate measures? Is LIBOR being manipulated by banks that are trying to make their financial positions appear better than they really are?

If that’s the case, it’s one more reason the credit crisis will fester and spread undetected: The artificially low interbank lending rates removed a key “early warning” indicator, leading investors to believe the credit market was healthy

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As the WSJ reported today, the collapse of Lehman Brothers and the sale of Merrill Lynch to Bank of America is just the latest chapter in a stunning redesign of the financial world.  Stand-alone investment banks are dying rapid deaths, with three down in 2008 already (who can forget the spectacular demise of Bear Stearns?).  In their place, a new king is rising - commercial banks.

The key difference between an investment bank and a commercial bank is the source of their cash flow.  A commercial bank like Bank of America or Wachovia takes consumer deposits, which are insured by the federal government to prevent depositors from pulling out all at once (a major catalyst of the Great Depression in the 1930s that is now prevented by tighter regulation and insurance).  Investment banks take no such deposits, and as a result benefit from lighter government

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It’s hard to believe 7 years have passed since that sad day. But so it has. It was another strange day to say the least. Market internals reveal terrible breadth despite the headline index numbers. But a late day rumor suggested Bank of America will buy Lehman or maybe just a piece like Neuberger Berman. That accounted for the big time stick save in the last half hour. LATE BREAKING: As I go to post this, another rumor is circulating of an imminent Fed rate cut. This is “not” what the market needs right now since rates are already ridiculously low. If true, the dollar would fall and commodities rally along with stocks. I can’t imagine it helping bonds other than short term. Then, if that's not enough, the Washington Post reports the Fed is working ...

VANCOUVER, B.C. - The U.S. financial crisis has cut so deep - and the government has taken on so much debt in misguided attempts to bail out such companies as Fannie Mae and Freddie Mac - that even larger financial shocks are still to come, global investing guru Jim Rogers said in an exclusive interview with Money Morning. Indeed, the U.S. financial debacle is now so ingrained - and a so-called "Super Crash" so likely - that most Americans alive today won’t be around by the time the last of this credit-market mess is finally cleared away - if it ever is, Rogers said. The end of this crisis "is a long way away," Rogers said. "In fact, it may not be in our lifetimes." During a 40-minute interview during a wealth-management conference in this West Coast Canadian city last month, Rogers also said:...

Alex’s Notes: Dont know about you, but I consider Jim Rogers to be a very smart man. You dont become a Billionaire in commodities by being stupid. He has some very interesting things to say about the Federal Reserve Chairman Ben Bernanke in a recent interview.

In my opinion, this guy gets inflation and the big picture better than just about anyone.

8.19.2008 Latest Jim Rogers Interview,

During a 40-minute interview during a wealth-management conference in this West Coast Canadian city last month, Rogers said that:

• U.S. Federal Reserve Chairman Ben S. Bernanke should “resign” for the bailout deals he’s handed out as he’s tried to battle this credit crisis. • That the U.S. national debt – the roughly $5 trillion held by the public– essentially doubled in the course of a single weekend because of the Fed-led credit crisis bailout deals. • That U.S. consumers and investors can expect much-higher interest rates

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The First of Two Parts.] Keith Fitz-Gerald Investment Director Money Morning/The Money Map Report VANCOUVER, B.C. – The U.S. financial crisis has cut so deep – and the government has taken on so much debt in misguided attempts to bail out such companies as Fannie Mae (FNM) and Freddie Mac (FRE) – that even larger financial shocks are still to come, global investing guru Jim Rogers said in an exclusive interview with Money Morning. Indeed, the U.S. financial debacle is now so ingrained – and a so-called “Super Crash” so likely – that most Americans alive today won’t be around by the time the last of this credit-market mess is finally cleared away – if it ever is, Rogers said. The end of this crisis “is a long way away,” Rogers said. “In fact, it may not be in our lifetimes.” During a ...