It's time to rein in the Fed

[Crewleader]

In yet another example of the central bank's failed bailout-after-bailout strategy, it's now on the hook for Bear Stearns' losses. We need to clarify the Fed governors' mandate -- or even send them packing.

By Bill Fleckenstein

Last week, those who believe in perpetually higher stock prices continued to play their favorite game -- "This is bullish because . . ." -- in which they slap that label on any and all news.

Thus they ignored the weakest reading on consumer confidence since 1973, when a particularly brutal recession was in its early days. After all, when more than a handful of people react by uttering the word "recession," you have to get ready for the recovery -- because we all know that recessions don't last for more than the blink of an eye. (Or so their logic goes.)

Of course, we saw another incarnation of the game Wednesday. That's when the crowd sent Bear Stearns (BSC, news, msgs) spiking 8% in 10 minutes on the news that Sen. Christopher Dodd would hold hearings this week to probe the role of the Federal Reserve, the Treasury Department and the Securities and Exchange Commission in Bear's sale. What that implied to the bullish community: the potential for an ever-higher stock price for BSC.

http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/ItsTimeToReinInTheFed.aspx?

[soothsayer]

1. Ha! Fat chance. Instead, we're giving them more power than ever.