The irony here is that Bullard is being characterized as a dove when, in fact, the opposite may be true. This is no small matter since Bullard will become a voting member of the FOMC in 2010.

So let's review:

The dollar weakness Monday morning was attributed, in part, to Bullard's comments that he would like to see the Fed continue its program of buying mortgage-backed and other asset-backed securities, rather than let it expire on March 31, as currently planned.

As with last week's brouhaha over his comments about the Fed possibly staying on hold until 2012, the headlines about the asset-buying program miss some of the nuance of Bullard's view.

Bullard recommends continuing the program "at a very low level," Dow Jones reports, adding: "As long as we are at zero [percent], we'd be able to send signals to the markets about what we are thinking about the economy, and how much accommodation the economy needs at various points, by adjusting the asset purchases."

In other words, if the asset-buying program is kept open, it can be another tool for the Fed to communicate with the market by means other than moving the Fed funds rate.

After spending some time with Bullard Sunday evening, it's pretty clear to me that he's no dove. As you'll see in the accompanying video, Bullard is very concerned about the potential for asset bubbles and the Fed's role in creating them...

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Treasury Secretary Tim Geithner took some heavy fire on Capitol Hill Thursday. Days after Oregon Democrat Peter DeFazio called for Geithner's resignation, Texas Republican told the Secretary: "The public has lost all confidence in your ability to do the job."

While these comments were notably terse, it's not unusual for politicians to take shots at a Treasury Secretary or Fed Chairman in order to score points with their constituents. It's a key part of the "dog and pony show."

What is unusual is for a sitting Secretary or Chairman to return the favor, as Geithner did yesterday, telling Brady: "What I can't take responsibility is for the legacy of the crises you've bequeathed this country."

There's obviously a "we inherited a disaster" mentality in the Obama administration and maybe this was just partisan politics and another example of how civility is in ever-decreasing supply in Washington. Or maybe Geithner is getting tired of the criticism and thinking about moving to the private sector sooner vs. later, as Henry Blodget writes.

The other issue here is why Geithner is getting such heat now when the economy is on firmer footing and the crisis seems to have passed. Some possibilities...

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The post-op on the great crash of 2008 continued in Washington Thursday as the Joint Economic Committee (JEC) held a hearing on financial reform.

"Unfortunately, the regulatory regime that failed so terribly leading up to the financial crisis is precisely the regulatory regime we have today," Treasury Secretary Geithner declared. "We need comprehensive financial reform."

As a former executive director of the JEC and professor of government/business relations at University of Texas, James Galbraith knows a bit about public policy. As the son of esteemed economist and "The Great Crash" author John Kenneth Galbraith, he also knows something about what it takes to put the pieces back together after a speculative boom and bust.

There is a way to have a financial system with a "reasonable degree of stability" and "serves a public purpose," Galbraith says. "But it does require having a government which is not run by the financial sector."

Galbraith didn't use the term "Government Sachs," but said "we're not going to get where we need to get...if you have this revolving door where all the people from Wall Street go down to Washington and offer their services and basically serve their own worldview and the financial interests of their friends."

While there seems to be no discussion of prohibiting the sort of "public service" practiced by so many alums of Goldman Sachs, or of reinstating Glass-Steagall (something he also supports), Galbraith says there is some progress being made on the reform front...

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Disappointing reports this week on housing starts and foreclosures, as well as the index of leading economic indicators, have cast a bit of a pall on the "robust recovery" story, putting a crimp in the stock market's ascent in the process.

University of Texas professor James Galbraith was never a believer in the V-shaped recovery and says it's going to take a very long time for the U.S. to recover from a "truly extraordinary slump."

What the optimists are missing is the impact the housing bust is having on both American's ability to borrow and banks willingness to lend. The resulting credit contraction will prevent this recovery from following the path of those following prior post-war recessions, he says.

"There's no question the U.S. economy has stabilized but [it] remains very weak and will likely continue to be weak," Galbraith says. "There's very little sign the benefits that are being felt on Wall Street will be felt in the broader country anytime soon."

Galbraith predicts the unemployment rate will continue to rise into 2010 and decline "very slowly" thereafter. The U.S. economy needs "substantially greater policy intervention," he says, focused on the following...

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"It's dangerous to be short this market," says Peter Boockvar, equity strategist at Miller Tabak.

Despite a penchant for bearishness, Boockvar says the rally can continue as long as the Fed keeps rates at zero.

"When you cut rates to nothing you're encouraging people to take risk," Boockvar says. "As long as asset inflation is [the Fed's] goal, the market could go higher but there are obvious consequences," including inflation.

The Fed is trying to create "the illusion of prosperity" by fueling asset price appreciation, Boockvar says, staying true to his reputation as a deficit hawk. Even if the U.S. stock market keeps rallying, "non-dollar assets" like commodities and emerging markets will continue to outperform, he says.

Unlike the U.S., emerging markets are "not weighed down by enormous debt levels" and local consumers are "much better off" than their American counterparts, the strategist says, expressing a strong preference for China.

"If you want exposure to global growth, it's going to be outside of the U.S.," he says, recommending the following...

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The newswires probably made too much of Bullard's comments - and headline writers overlooked his caveats: "The 'too low for too long' argument may weigh heavily on the FOMC this time," he said.

But TIPS spreads did widen sharply Wednesday and the bottom line is "the market is becoming worried about inflation," according to Peter Boockvar, equity strategist at Miller Tabak. "Not hyperinflation, not crazy inflation but inflation nonetheless."

So the $64 trillion question remains: When will the Fed act?

"The Fed has rates a zero. That was an emergency rate. The emergency is clearly is over. So why do you still have rates at zero. What are you afraid of?," Boockvar wonders. "Does the biggest economy in the world not function with rates above zero? That's what they're saying about us and I don't have that kind of pessimism."

Rather than speculate about when the Fed will stop talking about exit strategies and actually act, Boockvar believes "the market is going to force their hand,"...

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Many investors still look to those tech giants for leadership, but Howard Lindzon, CEO of StockTwits.com, says there's a new group of "horsemen" that deserve your attention and (perhaps) your investment dollars:

• Apple
• Amazon.com
• Google
• Priceline.com
• Gold
• Twitter
• Facebook

Lindzon gives the rationale for investing in this pack in the accompanying video, and talks about how his investing style compares with Warren Buffett's. In a nutshell, Lindzon's momentum style is the complete opposite of the value legend's approach. But "it's not the buying [of stocks] that matters, it's the holding and selling that matters," Lindzon says...

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"Sell-side analysts are somewhat more optimistic across most of our industry than we believe is warranted in light of the harsh realities of the current environment," CFO Doug Scovanner said on the firm's conference call.

In beating third-quarter expectations but issuing cautious fourth-quarter guidance, Target would seem to be in the same boat as its main rival Wal-Mart, which provided similar results/guidance last week.

But Wal-Mart shares rose after its results last week and were higher again Tuesday amid revelations Warren Buffett's Berkshire Hathaway effectively doubled its stake in the retailer to 37.8 million shares in the second quarter. SEC filings also show hedge fund legend George Soros also upped his stake in Wal-Mart in the quarter by 1 million shares to 1.1 million.

Beyond the seal of approval from these two financial heavyweights, Kristin Bentz, a former retail analyst who writes The Talented Blonde blog, says Wal-Mart is winning the big box wars for a variety of reasons, including...

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Tensions over economic policies were on full display on the eve of President Obama's trip to China.

First, Chinese Premier Wen Jiabao urged the U.S. to keep its deficit to an "appropriate size." Then China's top bank regulator, Liu Mingkang, said America's weak dollar policies had created "unavoidable risks" for the global economic recovery.

In between, Treasury Secretary Tim Geithner reiterated America's dedication to a strong dollar policy. Not coincidentally, Fed Chairman Ben Bernanke expressed similar sentiments in a speech in New York on Monday.

While there's certainly plenty to worry about when it comes to America's financial policies, it takes two to tango. There's plenty of concern over China as well:

• In a speech on Monday, IMF chief Dominique Strauss-Kahn stressed the need for China to allow its currency to rise. "Allowing the renminbi and other Asian currencies to rise would help increase the purchasing power of households, raise the labor share of income, and provide the right incentives to reorient investment," he said. "Higher Chinese domestic demand, along with higher US saving, will help rebalance world demand and assure a healthier global economy for us all."
• The UK Telegraph's Ambrose Evans-Pritchard took a more strident tone, accusing China of "dumping its unemployment abroad" by keeping the renminbi pegged to the dollar and, thus, artificially low, echoing recent concerns of Paul Krugman.

Gary Shilling, president of A. Gary Shilling & Co., believes currency levels are "way overrated" in terms of the impact on import-export prices.

But that doesn't mean there isn't plenty to worry about...

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Excluding autos, October retail sales were up 0.2%, half the expected rise, while September's drop was revised down sharply to 2.3% from 1.5% originally.

These disappointing sales data fit squarely with Gary Shilling's grim economic outlook.

"The whole gist of what's going on [with recovery] is in the hands of the U.S. consumer," Shilling says, and that's a problem for the bulls for three major reasons:

• Borrow & Spend No More: After a 25-year "borrowing and spending binge," the ability of U.S. consumers to borrow (especially against their house) is severely constrained, Shilling notes. After years in which U.S. workers borrowed in order to make up for punk wage growth, we have reached a "watershed" moment on this front, he says.
• Golden Years: The U.S. consumer is in a savings mode and that's especially true of aging Baby Boomers, who are going to be less willing to spend as they approach retirement - especially after the shellacking 401(k) accounts took in 2008.
• Got to Have a J-O-B: Yes unemployment is a lagging indicator but it's lagging more this time around vs. in prior recoveries, according to Shilling.

Add it all up and Shilling says...

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