A vote for Bernanke

As the stock market tanked at the end of last week, streams of venom were cast toward the White House and President Obama, who had just come down very hard and very publicly on bankers and those who run financial institutions. Obama promised to start hitting recipients of big bonuses with a big new tax.

It was an interesting tact by Obama. And not just because he's tended, when the heat starts to rise just a little, to start threatening (and, of course, blaming George Bush).

But it was strange considering the federal government has essentially allowed these institutions to make 8 kajillion tons of money during the last year and, therefore, want to reward its top people.

More on that later. That wasn't the reason for the rabid sellout on Wall Street, though.

In a sense, it was the anti-Obama administration voices who caused the drop.

That's right. And no, I'm not crazy.

Fed chairman Ben Bernanke isn't the most popular guy in Washington these days. He's increasingly unpopular on the right, and talk the past month or so that he was a virtual slam dunk to be reconfirmed for another term caused many heads to spin.

Well, what else happened around the middle of last week? A monumental upset in a Massachusetts Senate election essentially turned Washington on its ear.

Suddenly, the prospects for health care reform didn't look so great. In fact, nothing much on Obama's agenda did.

Including Bernanke's confirmation.

This sent investors into a panic. The key here is understanding who those investors are.

The very bankers and financial guys Obama went off on.

As I've said repeatedly, all this talk of a recovery is nonsense. Yes, the media can pull a number here and a number there, quote some "leading economist" (usually code language for "White House advisor") and announce with aplomb that THIS is a sure sign we're recovering.

Well, there's certainly no recovery where employment is concerned. Foreclosures and credit card defaults continue upward. Demand for energy is the lowest of our lifetime as evidenced by U.S. refineries operating now at only 76 percent capacity. Sales tax receipts are off by double digits every month in even the states least affected by these hard times.

What's been good? Well, Wall Street has been. The DOW made an upward climb most of the year. Commodity prices were up, as well. Everyone knows how volatile the price of oil has been the last 12 months. $60 per barrel one week, $70 the next. Back down to $60. Up to $75.

That's not demand or world events. That's someone monkeying with the market.

Now think about this, folks. Joe Citizen is hurting and hurting bad. He's losing his job, his house. He's not buying much.

So where's all this money in the stock market coming from?

The banks and financial institutions. How, you might ask, especially considering the fact that well more than 100 banks have gone belly-up the last 13 months?

Stimulus. Quantitative stimulus. Or, what I see most people erroneously refer to as the government "printing money."

In a nutshell, banks lost their shirts in 2008. Along came TARP to cover all that bad paper banks were holding. The government basically bought those bad loans, allowing the biggest banks (that were "too big to fail") to survive.

Only the rules changed a bit when Obama stepped into the White House.

Fannie Mae and Freddie Mac wound up with a lot of bad paper, as intended. But they could only take so much, considering they already were drowning in red ink.

So rules were further relaxed on what constituted a "holding company" ... the lines became blurred between your average bank and various types of financial institutions.

And the fed opened its window to all these companies and has been lending money -- LOTS of money -- at zero percent interest.

The banks had to get well, after all. They'd taken a beating like none had ever experienced. Several of the big ones went down.

But here's the rub. It wasn't business as usual. They didn't start lending again ... not to Joe Citizen, not to small businesses (who weren't really in a position to borrow anyway, given the recession, unemployment and falling demand for most everything).

Instead, they took that money ... with Bernanke's and the federal government's blessings ... and gobbled up T-bills by the 10s of billions. Why not?

If the government offered to loan you $1 million tomorrow at zero percent interest, then held a bond sale the next day with a "special" rate, you'd be a fool to turn it down.

Well, add four or five zeros to that $1 million, and yes, banks got well in a hurry. They also played the markets, and along with your Warren Buffets, kept them on an upward trend. Same with commodities, which were a slam dunk investment with the dollar in the toilet for most of the year. With the rules relaxed, anyone and everyone could set up "hedge funds" (Obama went off on those, too, remember?) ... and they did. Now you see $60 oil. Now you don't.

A lot of these companies got so well, they were able to start paying back large chunks of TARP money ... too fast, in fact, for Washington's liking if you'll remember.

The happy days hit a big ol' pothole last week, though. Bernanke's tenure suddenly fell into question. A change easily could whip things in a new direction, because what the government was doing economically clearly and obviously was helping no one but the very banks liberals love to demonize.

Buffett himself told CNBC last week that if he had two votes, he'd give them both to Bernanke. "If he's not reconfirmed," Buffett said, "tell me a day ahead of time so I can sell stocks."

So there's a big part of the problem with the markets. And it will continue to be this week. So long as Bernanke's future is on the line.

I'm no fan of the man. And the direction we're headed isn't a good one.

Thing is, I don't see that changing given the current makeup in Washington. At least not for the better.

I've joked about it with Twitter friends, but it really isn't all that funny. Bernanke might be bad. But his replacement? Probably not a whole lot better. And very possibly, if not likely, a whole lot worse.

Viva Keith Olbermann

Growing number of folks out there are calling even more loudly for Keith Obermann to be taken off MSNBC after his repugnant rant Monday night about Massachusetts Senate candidate Scott Brown.

Please stop this silliness.

I'm not defending Olbermann by any stretch. And this isn't even about the First Amendment.

But we spent eight years listening to liberals and the media (redundant, yes I know) claim that it was George W. Bush and conservatives who were "devisive" and at fault for this country being divided more than at any other point.

Yes, the same people who every day for eight years spewed the most vile filth about Bush and anyone who supported him.

And Olbermann? Yes, he's about as despicable as they come. But I want him on the air, every night at the same time. I even want more people to watch ... just enough to keep him relevent enough to the folks who put him there.

That way, he can serve as a constant reminder, and as a lesson to those on the fence, of just how venomous and detached from reality liberals really are.

A Brownout one way or the other

Tuesday's special election in Massachusetts already has been eye-opening in so many ways. I would have no more thought a Republican would stand a chance in such a liberal stronghold than I would bet San Francisco would toss Nancy Pelosi out on her ear.

But here we are on Election Eve, and Republican Scott Brown has emerged from Ron Paul For President-like depths in the polls to leading Martha (Don't Call Me Marsha) Coakley by anywhere from 5 to 11 points.

Will he win, though? Yes, that's the $40K question, isn't it?

As eye-opening as Brown's meteoric rise has been, Tuesday's result largely will determine this country's direction. And I'm not talking health care, Cap & Trade or open borders.

Democrats can not lose this election. The reasons are numerous.

First, imagine the shock waves throughout the party if a Republican wins a Senate seat occupied for nearly half a century by a Kennedy in such a liberal mecca. The media's collective "this has no national significance" claims would become the very definition of vacuous.

Then there's the pending health care legislation that Democrats desperately need their 60-vote super majority to force down America's throat.

The repercussions of a Brown victory would be immensely negative for Democrats, President Obama in particular, on both fronts.

This is why SEIU and ACORN have been pouring people and resources into Massachusetts for at least a month. Obama and the uber liberal machine backing him cannot leave anything to chance. The stakes are too high.

So this election will offer Republicans (well, conservatives anyway) a sneak peek at what they can expect going forward.

What is the magic number for a Republican to overcome fraud? Is it 5 percent? Six? Or is it to the extent already that no lead is sufficient and the concept of a legitimate election of consequence has passed?

And what will be the reaction if that is so? Will America simply bend over as it did in Minnesota last fall and again in New York District 23 and accept the outcome?

We'll soon find out. Either Brown will represent the beginning of a political tidal wave or we'll be left to wallow in brown of quite another sort.