The housing bubble may have burst but another American real estate boom rolls on: Since 2000, U.S. farmland values have risen by 58% after inflation, according to the FDIC. And since 2003, they've risen by over 10% annually.

Surging agriculture prices, a weak dollar, fear of financial assets and rising global demand for food have all contributed to this boom. The question now is whether it's becoming a bubble.

"It's very reminiscent of period we had in 1970s," when farmland prices surged 350% in less than a decade, says Bill Isaac, former FDIC chairman and current chair of Fifth Third Bancorp. "I'm hoping we don't let it get that far."

At an FDIC symposium in Washington this week, Isaac discussed the "worrisome trends and similarities between the 1970s and today," including: loose fiscal and monetary policies, massive deficits creating inflation, and a weak dollar spurring demand for agricultural exports.

When Paul Volcker became Fed chairman in 1979, he had a mandate to break the back of inflation. In the process, Volcker burst the farm bubble: foreclosures skyrocketed as land prices tumbled and about 300 farm banks failed.

"It was very painful," Isaac recalls. "I hope we don't go through another boom-bust cycle."

The FDIC symposium was designed to avoid such an outcome by alerting bankers to the potential risk of their ag-related exposure. Although the 100 largest banks account for about 25% of farm-related loans, Isaac says he's more worried about smaller, less diversified community banks in agricultural producing regions.

Suggesting regulators and bankers have learned the lessons of the 1970s farm boom and the more recent residential housing bubble, Isaac is hopeful this cycle will be less painful. That is, "as long as we don't let the bubble get out of hand," he says. "If we let bubble get out of hand, all bets are off. "

And as long as Ben Bernanke is at the helm of the Fed, the ‘smart money' is going to keep betting (on) the farm.

Crisis may create opportunity, but Congress completely flubbed its opportunity to enact meaningful financial reform in the aftermath of the worst crisis since the Great Depression, says the former chairman of the FDIC, Bill Isaac.

The Dodd-Frank reform bill--the one major piece of legislation to emerge since the financial crisis--is mostly meaningless, says Isaac, who is also the chairman of regional bank Fifth Third.  Dodd-Frank does nothing to address the root causes of the financial crisis, Isaac says, and it won't prevent the next one.

Specifically, Dodd-Frank will just create more bureaucracy and red tape. Meanwhile, our biggest banks are still "Too Big To Fail." Our commercial banks are still allowed to take way too much risk. Our regulators are still balkanized and political. And we still haven't addressed Fannie Mae and Freddie Mac.

Isaac suggests the solution may be to re-implement the Glass-Steagall Act which separated commercial and investment banking. But, at this stage of the game, that's not likely, considering the size and scope of the bank lobby in Washington.

In other words, it's fair to say that Wall Street won the financial crisis.

And it's no mystery who lost.

Oil prices fell sharply Thursday morning but stocks tumbled as Moody's downgrade of Spain put Europe's debt crisis back in focus. European bourses tumbled overnight and the euro fell sharply vs. the dollar, which in turn put downward pressure on stocks, commodities and other so-called risk assets. 

After falling below 12,000 Thursday morning, the Dow was recently down 177 points to 12,035. Gold and oil prices were also sharply lower. (See: Charles Nenner: Crude and Other Commodities Nearing a Cycle To.)

Thanks to unrest in the Middle East and rising oil prices, Europe's debt crisis has been off center stage for a while. But problems in the Eurozone remain unresolved; namely, banks are still saddled with billions (if not trillions) of bad debt and there's not enough political will for another massive bailout -- even if the money were available.

In Spain, for example, the government had earmarked 20 billion euros for a bank "restructuring" package, a.k.a. another bailout. Some private forecasters have put the tally closer to 120 billion euros and Moody's says there is "a meaningful risk that the eventual cost of the recapitalization effort could considerably exceed the government's current projections."

Meanwhile, investors continue to speculate on potential defaults by other European sovereigns, most notably Greece, Ireland and Portugal. The price of credit default swaps on those nations' debts has hit record levels this week, Bloomberg reports.

Following a WSJ report earlier this week, there are also concerns the latest bank stress test won't nearly be stressful enough.

Finally, ECB President Jean Claude Trichet's recent comments about the likelihood of a near-term rate hike have revived questions about growth in the eurozone.

Like America in 2008-09, the Europeans were successful in kicking the proverbial can down the road with the EU-IMF bailout fund last spring. Less than a year later, Europe appears to be catching up to the can, as Henry and I discuss in the accompanying clip.

The number of housing foreclosures are falling. There were slightly more than 225,000 foreclosure proceedings in February, down 14% compared to January, and an even more impressive 27% drop vs. a year ago, according to RealtyTrac.

Good news for struggling homeowners, as more of you are staying in your home. However, this doesn't mean the housing market has turned the corner.  The decrease in foreclosure activity, RealtyTrac says, is likely due to a slowdown in filings because of various lawsuits regarding improper foreclosures by the banking industry.  If anything, the legal holdups are probably just dragging out the process and will prolong any real estate resurgence. 

The housing market remains troubled.  December's S&P/Case-Shiller Index showed a drop in home values across the board. Like Case-Shiller, RealyTrac's data shows the hardest hit areas are still suffering. Foreclosure activity is still highest in Nevada, Arizona and California.

The solution according to Aaron and Henry is to let nature takes its course.  The Obama administration's mortgage modification plan is having little lasting effect.  The principle reduction ideas being floated may help existing homeowners and may aid banks somewhat, but they likely keep prices inflated and dissuade those on the sidelines from buying. (See:
"Pretty Ham-Fisted": Glenn Hubbard Reviews Obama's Newest Housing Fix)

What's the best solution?

Last week's budget agreement averted a government shutdown, but there's a major political showdown coming ahead of the new March 18 deadline.

In addition to the battle over Obamacare, entitlement programs and the tax code, there's a big fight brewing over funding for the SEC, Commodity Futures Trading Commission (CFTC) and other financial regulators.

If Republicans get their way "both individual consumers and the financial system will be back at risk," says Rep. Barney Frank (D-Mass.), one of the chief architects of the financial reform legislation passed last year.

"We passed a good bill to deal with derivatives and deal with investor protection and [House Republicans] withheld the funds," he says in the accompanying video. "They weren't doing it to save money, they were doing it because they ideologically believe derivatives should be unregulated."

In addition to the pushback on derivatives legislation, Rep. Frank cited oversight of hedge funds, and funding for the Consumer Financial Protection Bureau as areas where the GOP wants to "re-deregulate the economy." (See: New Consumer Agency Under Attack: "This Is About Cops on the Beat," Warren Says)

"Our efforts to get at the shadow banking system... will be made very difficult by the Republican's budget," Rep. Frank says. "Their view [is] ‘let's keep the shadow banking system in the shadows'. It will be bad for consumers, bad for investors [and] ultimately bad for the economy."

Rep. Frank is, of course, a partisan player and a highly controversial figure. But on this issue, at least, he's got the support of The Financial Times, which is not exactly a bastion of radical liberalism.

"The pressure to cut the SEC and CFTC budgets is part of the Republican war on the White House," according to The FT's editorial board. "Dodd-Frank is not perfect, but it improves on what came before. It cannot work, however, if politicians do not support regulators' efforts. If the Republicans want another financial crisis, they are going about it the right way."

The Consumer Financial Protection Bureau doesn't officially open for business until July 21, but its opponents have already launched some preemptive strikes.

Amid the budget wrangling in Washington, House Republicans have proposed capping the CFPB's budget at $80 million this year vs. the $143 million requested. Separately, legislation has been proposed to move the bureau into Treasury, which would give Congress greater oversight of its operations.

"Let's face it...the whole notion behind [this] is to try to make this agency weaker," says Elizabeth Warren, who President Obama tasked with setting up the agency. "I don't get why you want to do that to consumers."

On Wednesday, the House Financial Services committee is schedule to hold a hearing on the CFPB, where these and related matters are certain to be discussed. Citing the bureau's "extremely broad rulemaking authority," the Chamber of Commerce sent a letter to Treasury Secretary Tim Geithner ahead of the House hearing requesting no rules be made by the CFPB until the White House nominates a director who is then confirmed by Congress.

In September, President Obama put Warren in charge of setting up the CFPB, an agency she helped champion. The President did not formally nominate her to run the agency, thus avoiding a potentially nasty Senate hearing - and possible rejection. (Whether that was an act of political shrewdness or cowardice is a matter of opinion and a discussion for another day.)

It's been a little more than a year since the CARD Act became law and contrary to what the banking lobbyists claim, Elizabeth Warren says it's working.

Asked to respond to a claim, made by the chief attorney for the American Bankers Association, that the act has made credit more expensive and harder to access, Warren shot back: "The data doesn't support that," she said, suggesting it's hard to determine whether any decline in consumer credit is due to the CARD Act rather than less demand for credit from debt-laden consumers or banks' unwillingness to lend as freely as during the go-go days of the early 2000s. 

In terms of the Act's measurable impact, an Office of Comptroller of the Currency study found that since the law took effect:

• -- Only 2% of credit cards accounts were subject to rate hikes, down from 15% of accounts prior to the new laws. 
• -- The total amount of late fees collected dropped by more than half from $901 million in January 2010 to $427 million in November 2010.
• -- Over-the-limit fees "virtually disappeared," dropping from 12% of credit card accounts to 1%.

Tech Ticker recently caught up with Warren in Washington, D.C. where she is tasked with setting up the Consumer Financial Protection Bureau (CFPB)...

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Indeed U.S. banks posted net income of $87.5 billion in 2010, the best since 2007. But former TARP Cop Elizabeth Warren isn't as sure as Geithner that the coast is clear.

"I think there are parts [of the system] that have changed but I still worry, a lot," she says. "We have more concentration in the banking industry than we had before [and] we're going to have a ‘too big to fail' problem lurking around the edge of this financial system until we've demonstrated how we're going to deal with financial institutions who take on too much risk."

Back in October 2009, when she was chair of the Congressional Oversight Panel,, Warren was "speechless" when asked about record bonuses and lamented that Wall Street executives "can't see that the world has changed in a fundamental way - it's not business as usual. All I can say right now is they seem to be winning this argument."

Today, Warren is serving as a Special Adviser to President Obama, charged with the task of setting up the Consumer Financial Protection Bureau, which she championed.

In 2010, the average cash bonus fell 9% to around $125,000 but overall Wall Street compensation rose 6%. So does Warren still think the banks are winning?

"There's no one in Congress who's talking about the salary structure for the largest financial institutions but there are people in Congress who are talking about ‘let's beat back the consumer agency and cut it's funding in half," she notes. "So I think we see where the battle lines are drawn. And given the crisis we just went through, I'm genuinely shocked that's the place where we're fighting. "

Stay tuned for additional clips from this interview, which I'll note occurred before Monday's announcement that Citigroup Chairman Richard Parsons and AmEx CEO Kenneth Chenault were joining President Obama's Council on Jobs and Competitiveness.

Aaron Task is the host of Tech Ticker. You can follow him on Twitter at @atask or email him at altask@yahoo.com

Editor's Note:  This is an interview Tech Ticker conducted with "Inside Job" filmmaker Charles Ferguson in October.  In honor of the film's best documentary Oscar, we've decided to play it for you again.  Enjoy!

The collapse of Lehman Brothers in September 2008 sparked a global financial crisis that pushed the U.S. economy into the worst recession since the Great Depression. Two years later, billions upon billions of taxpayers’ dollars have been spent on government bailouts to save the banks that started the contagion, yet not one person has been held accountable or slapped with criminal contempt.

In his new documentary Inside Job, filmmaker Charles Ferguson spoke to some of the biggest names from Wall Street to Washington to academia to get a first hand account of what caused the 2008 financial meltdown and how the financial system reach its breaking point.

Ferguson points to 20 years of deregulation, rampant greed (a la Gordon Gekko) and cronyism. This cronyism is in large part due to a revolving door between not only Wall Street and Washington, but also the incestuous relationship between Wall Street, Washington and academia.

The conflicts of interest that arise when academics take on roles outside of education are largely unspoken, but a very big problem. “The academic economics discipline has been very heavily penetrated by the financial services industry,” Ferguson tells Aaron in the accompanying clip. “Many prominent academics now actually make the majority of their money from the financial services industry, not from teaching or research. [This fact] has definitely compromised the research work and the policy advice that we get from academia.”

Example after example of this revolving door between Academia and Wall Street and academia and Washington are brought to light in Inside Job. Ferguson showcases this unspoken problem by actually interviewing a number of academics with ties to the government and/or financial sector.

To wit:

Martin Feldstein is currently the George F. Baker Professor of Economics at Harvard University and President Emeritus of the National Bureau of Economic Research. While holding advisory positions in both the Reagan and GWB administration he also served on the board of both AIG and AIG Financial Products from 1988-2009.

Glenn Hubbard is currently the Dean of the Columbia Business School. Hubbard was Chief Economic Advisor during the Bush Administration, currently on the board of Met Life and previously on the board of Capmark.

Frederic Mishkin is currently a professor of finance and economics at the Columbia Business School. From 2006-2008 he was a member of the Federal Reserve Board. Also in 2006, he was paid $124,000 by the Icelandic Chamber of Commerce to write a report on Iceland’s financial sector.

Academics at 20 Paces
This last example is probably the most notable in Inside Job. Mishkin became combative and seemingly uncomfortable at some of Ferguson’s questions – especially regarding the report commissioned by Iceland’s Chamber of Commerce.

After the premiere of the film this month, Mishkin wrote a piece in the Financial Times accusing Ferguson of ambush journalism. “In July 2009, I agreed to be interviewed on camera for a film that was presented to me as a thoughtful examination of the factors leading up to the 2008 global economic collapse," Mishkin writes. "About five minutes after the microphone was clipped to my lapel, however, it became clear that my role in the film was predetermined - and I would not be wearing a white hat.”

Feguson tells Aaron there is little truth to what Mishkin contends. “I conducted an interview with professor Mishkin that lasted over an hour and touched on many subjects. I certainly did ask him his views on the crisis, but it did turn out that professor Mishkin did have a number of things to conceal and he became very uncomfortable during the interview.”

Since our interview, Ferguson wrote a response to Mishkin in the FT. “Professor Frederic Mishkin misrepresents both his own activities, including his interview for my film, and the widespread conflicts of interest which have distorted academic economics and its role in the financial crisis,” Ferguson writes. “The only reason we now know of Prof Mishkin’s payment for the Iceland report is that he was later forced to disclose it when he was appointed to the U.S. Federal Reserve Board.”

Ferguson is astonished by the lack of regulation demanding financial disclosure of all academics and is now pushing for it. “At a minimum, federal law should require public disclosure of all outside income that is in any way related to professors’ publishing and policy advocacy,” he writes. “It may be desirable to go even further, and to limit the total size of outside income that potentially generates conflicts of interest.”

It should be noted that Ferguson himself has ties to academia. He spent many years as a visiting scholar at M.I.T. and U.C. Berkley.

• New home sales fell 12.6% in January.
• Mortgage applications are near a 15-year low.
• The Case-Shiller Index has fallen five straight months.
• Foreclosed homes were 26% of total sales in 2010.
• 27% of mortgage holders are under water on their mortgages.

Against that grim backdrop, and with its HAMP program widely viewed as a failure, the Obama Administration is floating a proposal for its latest plan to fix the housing market, The WSJ reports: Force banks to pay for reductions in loan principal for struggling homeowners.

"The administration is looking at the right problem, but in a pretty ham-fisted way," says Glenn Hubbard, Dean of Columbia Business School and the top economic adviser to President George W. Bush during his first term. "The issue with principal forgiveness is that it's very hard to do."

Because of the securitization of mortgages, multiple parties would have to agree to the principal write-downs at the core of the plan -- or risk having contracts and bond covenants wiped out. "This [plan] would really run roughshod over the rule of law," Hubbard says.

According to The WSJ, the cost of the principal write-downs "won't be borne by investors who purchased mortgage-backed securities." In other words, bondholders would get 100 cents on the dollar (yet again).

Barring (yet another) government bailout, the only way to do that would be for the banks to have to cover payments on those securities, Hubbard says. "The problem is the government is also telling banks they need to keep raising equity capital; those two statements are in direct opposition to one another."

How to Build a Better Mousetrap

Hubbard has long argued that the most efficient way for the government to "fix" the housing problem is through "mass refinancings" funded by Fannie Mae and Freddie Mac. (See: Refi Madness: Use Fannie and Freddie to Solve the Housing Crisis, Hubbard Says)

 Because the government has given those reviled institutions an unlimited backstop through 2012, "we're already on the hook for the credit risk," he says. "We've already guaranteed Freddie and Fannie so there's no incremental cost to taxpayers of doing this."

In the accompanying video, Hubbard mentions other potential ways to resolve the housing crisis, including a modern version of the Depression-era Homeowners Loan Corp. or the covered bond model used in Europe.

"It's not that we have to reinvent the wheel ... but we really need to take action now," he says. "Unfortunately I don't see that action coming now. The president would have to lead on a broader set of reforms then he has," at least to date.

Aaron Task is the host of Tech Ticker. You can follow him on Twitter at @atask or email him at altask@yahoo.com