It's deja vu all over again: It seems that way too often the hope that the Fed is "finally finished" raises expectations of a pause. We saw that on Wednesday, the markets' best one-day performance since 2003. Alas, it was all given back by Friday. These short-covering/one-day wonders must be becoming quite tiresome to those poor souls who believe in them.

No matter: The economy is terrific, there is no inflation, earnings are great, Iraq is a democracy, oil prices are dropping and peace is due any minute in the Middle East. Oops, my bad. That must have been some incumbent's press release.

Back in the real world, there are real concerns that need to be digested. It's a rainy weekend in New York, and that means an extra-long survey of many of them in our weekly Linkfest:

¿ Are we placing too much blame on Bernanke? After all, he merely inherited a bad economic situation. Slowing growth, rising inflation, high energy costs, a real estate-dependent economy and the longstanding problem of excess liquidity -- none of these rest at the feet of the present Fed chairman. In reality, they are the result of what Tim Iacono charitably describes as The Mess That Greenspan Made.

¿ The most egregious critic of Bernanke is Sen. Jim Bunning (R., Ky.). He called Bernanke an "amateur" and "blasted the former Princeton University professor for unnerving markets with his anti-inflation rhetoric." Perhaps the junior senator from Kentucky needs to be reminded of his own record: In his rookie season with the Detroit Tigers, he hurled a lamentable 6.35 ERA.

¿ The Wall Street Journal's Greg Ip, whom I have criticized in the past for being too trusting of government statements and news releases, removes the scales from his eyes in Fed Reality Check.

¿ Was Wednesday anything more than a Sucker Bet? So far, it seems not.

¿ Real estate moved front and center this week:

- The Fed chairman said in his prepared remarks that the slowdown in housing was "orderly."

- Barron's Alan Abelson quotes D.R. Horton ( DHI) CEO Don Tomnitz saying housing downturns are "longer and deeper than we've imagined" in Eyes Wide Shut. (If no Barrons, go here.)

- The New York Times exhorts us to " Keep Eyes Fixed on Your Variable-Rate Mortgage". (They were kind enough to provide me with this interest-only national map from their print edition.)

- The latest Headache For Homeowners: Inflated Appraisals.

- These are the best places to live in America.

¿ The Middle East is causing all manner of consternation. The Op/Ed pages of American newspapers are rife with fascinating and thoughtful analyses. (I am aware that this may quite possibly be the first time that sentence has ever been written). In the WSJ, Middle East scholar Fouad Ajami writes that Lebanon is Hostage to Hezbollah via Iran and Syria. In The New York Times, Ted Koppel (Yes, that Ted Koppel) addresses the question, Are the Israelis over-reacting in Lebanon?:

"Perhaps they simply perceive their enemies' intentions with greater clarity than most. It is not the Lebanese who make the Israelis nervous, nor even Hezbollah. It is the puppet-masters in Tehran capitalizing on every opportunity that democratic reform presents. In the Palestinian territories, in Lebanon, in Egypt, should President Hosni Mubarak be so incautious as to hold a free election, it is the Islamists who benefit the most."

Meanwhile, in The Washington Post, George Will calls the Weekly Standard the "voice of a spectacularly misnamed radicalism, 'neoconservatism,'" and writes that the magazine is offering up criticism of the Bush administration that is " so untethered from reality as to defy caricature." The Cato Institute concurs. Is National Review next? Some people are surprisingly thrilled about the situation: It means the Rapture is nearly here.

As for the financial repercussions, consider these possibilities:

- Bank of Israel: Markets Will Project a Change for the Worse in Israel's Security and Geopolitical Situation. ( PDF)

- Morgan Stanley: The 'latest' tension is another twist in the endless cycle of shocks in the Middle East.

- BusinessWeek: The Mideast's Economic Fallout.

- Bloomberg: Israel Stocks Rise Most in a Week on Optimism Conflict Near Endn

¿ With all eyes on the Middle East, you may have missed this: Has China's Yuan Tinkering Changed the Global Economy? (It was the anniversary of the unpegging.)

¿ Some interesting ideas came forth this week from the world of investing:

- Random Walk and Outperforming Fund Managers (or, what's left of the efficient market hypothesis).

- The Market is Wired Differently From Human Brains.

- Citigroup's geo-political risk calculator.

- Want to Buy Stocks Making 52 Week Lows? (Don't).

- In case you missed it, Warren Buffett on Charlie Rose.

- "We Now Return You to Our Previously Scheduled Microsoft Bashing"

- Fleckenstein says: The bear market is back.

- Speaking of Big Cap Tech Disasters: Dell.

- What Can Male Traders Learn from Successful Women ... And Vice Versa.

- The trading doc advises Making friends with market emotions.

¿ Option, Options, Options!

Study Finds Backdating of Options Widespread: More than 2,000 companies appear to have used backdated stock options. Fortune's Adam Lashinsky drew the early bead in Options gone wild!

Readers were warned of the adverse impact of options expensing 18 months ago.

A must-read study: CEO total direct compensation at Tech100 firms is inversely correlated with performance. (PDF)

Last week, I wrote how offended I was at the 9/11 option grants. Surprisingly, some defended the practice, so I advised them to form an "Apologist's Fund" and to use their own dollars in a 9/11 Options Grantee Investment.

¿ The Investment Company Institute noted that Americans have over $14.5 trillion stashed away in retirement accounts. Sounds like a lot of money -- until you Do the Math.

¿ What the Naïve Consumers Don't Know, Can Help You.

¿ Some interesting tech and science items:

- Way cool: The Biomedical Image Awards 2006.

- PEW: Bloggers: A portrait of the Internet's new storytellers.

- Geek to Live: Top 10 free and cheap productivity tools.

- Cool Google Maps mashup of the most popular books by city.

- Do you have Netflix Guilt?

A MySpace backlash has begun: The Register notes the social networking site's advice to musicians, a huge provider of content: Sell more T-shirts

¿ A week like this needs lots of funny. We have it for you in spades:

- Ask A Ninja Reviews Pirates of the Caribbean. (Note: This is not safe to play at work!)

- The laugh-out-loud funny Secret Diary of Steve Jobs, Aged 51 1/2.

- Brilliant mashup of Monty Python's Knights of the Round Table, as performed in Star Trek.

- Chad Vader - Day Shift Manager (episode 1).

- Judge: "Extremely Embarrassing" not the same as "Classified".

- The Daily Show on Ted Stevens and on Net Neutrality

Regular readers know I've been a big fan of the program Entourage since day one. But HBO has also been running lots of older movies lately: Animal House, North Dallas Forty, L.A. Confidential, 48 HRS., Houseboat and Field of Dreams. Any of these are perfect for a rainy weekend. (And if you haven't seen Monster-in-Law yet, make sure you do, just for Wanda Sykes' performance.)

And that is all she wrote.
Barry Ritholtz is the chief market strategist for Ritholtz Research, an independent institutional research firm, specializing in the analysis of macroeconomic trends and the capital markets. The firm's variant perspectives are applied to the fixed income, equity and commodity markets, both domestically and internationally. Other areas of research coverage also include consumer, real estate, geopolitics, technology and digital media. Ritholtz is also president of Ritholtz Capital Partners (RCP), a New York based hedge fund. RCP is driven by the analysis performed by Ritholtz Research. Ritholtz appreciates your feedback; click here to send him an email.

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