“Over a frantic weekend in mid-March, Ben Bernanke rewrote the rule book as chairman of the Federal Reserve. Like a military commander applying overwhelming force, he took steps then and over the next two months that some at the central bank are now calling the Bernanke Doctrine.” from International Herald Tribune

Personally, I don’t think Bernanke has the slightest clue as to how to prevent things to come.  I’ll concede that he’s mitigated the obvious, and current risks of lender failures, but how long and how much can the Fed influence obvious market corrections?  Consumer activity, and the funds related to that activity far exceed any corrective measures the Fed may take.  If Bernanke wants to bail institutional lenders out thinking that’s going to fix the underlying problem, good for him.  It won’t fix the problem.

There’s an awful lot of overvalued property out there, and a lot of loans that make no sense and are probably underwater.  Property values will move to a point where consumers believe the property is a good or reasonable value.  Lenders holding notes on overvalued properties will see the value of their notes fall as the market shifts to more of a qualifying consumer level.  Ben’s “quick-fix” doctrine isn’t going to change or alter the fundamental concept that consumers will determine where the market will go, all Ben’s doing is spending money trying to drag out the inevitable.