The only real prosecution for securities fraud relating to the subprime crisis has flopped: Bear Stearns hedge fund managers Ralph Cioffi and Matthew Tannin were acquitted today of fraud charges. A federal jury in Brooklyn took less than six hours to reach the verdict, after a month-long trial.

They were indicted in June 2008, a year after two funds they managed failed, costing investors a cool $1.6 billion. The duo were accused of not telling investors about the the shaky subprime-mortgage foundation of their funds.

The WSJ notes that the trial "trial was viewed a test of the boundary between putting a positive spin on bad results and outright fraud."

As my colleague James Lieber recently noted in a Voice cover story, Cioffi and Tannin were the targets of a Bush-era prosecution (and they were hardly big fish), and Barack Obama's crew has yet to launch a major securities fraud prosecution of its own.

In any case, the not-guilty verdict makes such prosecutions even more unlikely now.

The Republicans' Deaf Ear Is a Preexisting Condition (WashPost, Dana Milbank)

Funny piece on the first day of the Senate's "debate" on the health-care bill. GOP senator Jim Bunning declared he was against the bill, no matter what form, and then he promptly fell asleep. The Republicans might as well have sung "Whatever It Is, I'm Against It," Groucho Marx's bit from Horse Feathers (1932). Or just stayed home to watch re-plays of former colleague Tom DeLay dancing with the stars.

A New Bubble Of the Fed's Creation (WashPost, Steven Pearlstein)

Stimulus packages boost the market so much that, well, another boom is underway. Here's an example of excessive greedsters feasting on carcasses artificially bloated by government money, from the WSJ: "Speculators Seek Fortune in AIG." The NY Post notes that Lehman alums are setting up funds to pick at the carcass of their failed bank. Stocks are rising and traders are waiting with bated breath as the Fed meets this week to figure what, if any, action it will take.

Delayed Foreclosures Stalk Market (WSJ)

Though some foreclosures are being delayed out of good intentions to help beleaguered homeowners, "some analysts believe the delays are prolonging the mortgage crisis and creating a growing 'shadow' inventory of pent-up supply that will eventually hit the market."

A Teflon Rally Running on Volume Fumes (Seeking Alpha, Babak)

Warning: "... this rally is the largest one powered by the least volume ..." Even crazier, an astonishing share of volume has been from a mere handful of stocks. See Liam Denning's "Smoke Signals From the Stock Rally" in the WSJ.

Prosecutors say half of Bernie Madoff's investors lost nothing in Ponzi scheme (NY Daily News)

MORE HEADLINES FOLLOW

A week from today, PBS will air the first episode of The Ascent of Money, historian Niall Ferguson four-parter video takeoff on his book. But you can already watch the first episode here.

Oh, is it glib. But pretty entertaining. LibraryJournal.com's Lawrence R. Maxted includes it among the five DVDs essential to "deciphering the mortgage crisis."

The others:
House of Cards
I.O.U.S.A.: One Nation. Under Stress. In Debt.
We All Fall Down: The American Mortgage Crisis
Inside the Meltdown.

Perhaps better than those, especially because it zooms in on America's oligarchs, is the "Following the Money" episode of Bill Moyers Journal, starring Baseline Scenario's Simon Johnson. (For a good crash course on modern money, see the Baseline Scenario's "Financial Crisis for Beginners."

Back to Niall Ferguson: Check out the above video for a good a preview of Ferguson (a sparring partner of Paul Krugman's): TVO's 15-minute interview with him on The Agenda, a Toronto-based series hosted by Steve Paikin, as adroit an interviewer as Ted Koppel. Here's a snippet about the global financial crisis from the voluble Ferguson:

Always armed with pop-culture references, Ferguson also discourses on the relationship between democracy and capitalism, calling it "a kind of a double helix of modernity."

So here's one that will get no notice at tomorrow's meeting Charlotte, North Carolina:

It involves the sweetest of all mortgage deals that BofA gave just last year to exec Barbara Desoer, who runs the bank's notorious Countrywide subprime mortgage unit.

Only yesterday, Desoer announced that the bank was renaming Countrywide "BofA Home Loans." Don't remember Countrywide? The Sacramento Bee reminds you:

David Kellerman, the acting CFO of Freddie Mac, has committed suicide, according to breaking reports.

Kellerman, who was only 41, was found dead at his home in suburban D.C. Few details are available at this second, but the AP says TV outlet WUSA says his wife told cops it was a suicide.

It's early days, but adding to the mystery at least right now is that Kellerman was named the acting chief financial officer only last September, when the government-sponsored mortgage lender was placed under conservatorship. So he wasn't one of the goniffs who brought Freddie to its knees.