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The Five Dumbest Things on Wall Street This Week: May 30

1. No Rest for the Bearded

Here's hoping Federal Reserve Chairman Ben Bernanke doesn't have any vacation plans this fall. The bearded banker is short-handed and someone needs to stand ready at the printing presses just in case we haven't really seen the worst of the credit crisis yet.

Fed governor Frederic Mishkin submitted his resignation to President Bush this week, with plans to go back to teaching at Columbia University at the end of August. That leaves a whopping three vacancies on the board of the central bank as Wall Street muddles its way through the mortgage mess.

Luckily, rules that once required approval from at least five Fed governors to take emergency monetary action in a crisis were relaxed after 9/11. Now, only support from four governors is required for extraordinary actions like those taken by the Fed in March when it orchestrated the fire sale of Bear Stearns (BSC) to JPMorgan Chase (JPM - Get Report) and opened up the discount window for investment banks facing a liquidity crunch.

Four central bankers are still hanging on at the Fed, and Wall Street needs every one of them -- even poor old Randall Kroszner, whose term has expired. He's permitted to continue serving until a replacement is sworn in, but he's not holding his breath. The President's appointees for vacancies at the Fed are awaiting confirmation in the Senate, where Senate Banking Committee Chairman Chris Dodd (D., Conn.) runs the show.

Dodd takes the blame for the Fed, but what about the Securities and Exchange Commission, where the two commissioner seats saved for Democrats to ensure bipartisanship at Wall Street's watchdog are vacant?

The Washington Post reported this week that with eight months left in the Bush presidency, "scores of senior officials [in the federal government] already are heading for the exits, leaving nearly half the administration's top political positions vacant or filled by temporary appointees." As of December, 616 top officials at federal agencies were people appointed by President Bush and confirmed by the Senate, amounting to only 56% of the 1,100 officials that are typical at the peak of an administration.

Never mind two wars, the threat of terrorism, soaring oil prices, the weak dollar and economic weakness. The subprime leadership problem looks contained.

Dumb-o-meter score: 95. How many congressional committees does Chris Dodd run, anyway?
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