Wall Street Influence

Greg Ip writes in WSJ about Ben Bernanke and how he rewrote the Fed Playbook in his first major crisis. The article talks about how Bernanke is different from his predecssors. He likes to debate issues.

Look at the article closely and you see the influence of Wall St. on the Fed. The beggars on wall St. were disapointed because the fed reiterated it's view that inflation is the main risk to economy.

One Fed governor spent hours on the phone grilling contacts on Wall Street.
Another official helped broker a deal to help mortgage lender Countrywide
Financial Corp. through a financing squeeze, aiming to avert a disruptive
unwinding of complex loan agreements.

Mr. Bernanke was no stranger to central bankers, but he was a neophyte
to the schmoozing of Washington and Wall Street. To help him make connections,
Timothy Geithner, president of the Federal Reserve Bank of New York and a
veteran of the Clinton Treasury, arranged breakfasts and lunches at the New York
Fed between Mr. Bernanke and financial "wise men." Guests included Citigroup
executive and former Treasury secretary Robert Rubin, and former J.P. Morgan
& Co. chairman Dennis Weatherstone.

And if you think the mess is over....

As the meeting ended, an attendee recalled, one of the hedge-fund
representatives said, "See you again next year." In an apparent reference to
the
still-fragile state of markets, Mr. Bernanke replied: "If not sooner."