Top of the News: Fed Chairman Ben Bernanke seemed to offer a softer case today for make the central bank the super-regulator of financial institutions. Now he says there should also be "council of regulators" involved.

Anyone who has read David Wessel's In Fed We Trust probably comes away with an ambivalent view. On the one hand, the Fed was complacent in the years when the subprime mortgage crisis was building inside the very institutions it was already charged with overseeing. On the other hand, only the Fed had the power and assets to act quickly to keep last fall's panic from becoming a depression.

The real problem is the total breakdown of regulatory oversight and checks and balances in recent years. Enamored with the idea that the market would police itself, regulators, rating agencies and politicians set aside decades of successful practices, beginning with the Clinton era deregulation of financial services. Meanwhile, the unregulated shadow banking industry grew so fast and complex it had the power to take down the system with its bad bets -- and in the end the Fed and taxpayers were forced to save such bad actors as AIG.

The Back Story: If anybody's still paying attention to him, former Fed Chairman Alan "Bubbles" Greenspan predicts that stocks will "flatten out...putting a dull face on 2010." Greenspan made the comments in an interview on Bloomberg television. The good news? He doesn't see a relapse into recession. I knew Greenspan played the saxophone -- but did you know Bernanke does, too?

Economist Nouriel Roubini maintains that Fed policy will be a prime driver. "...the crucial policy issue ahead is how to time and sequence the exit strategy from this massive monetary and fiscal easing...," he wrote recently. "Clearly, the current fiscal path being pursued in most advanced economies...is unsustainable."

Meanwhile, if you didn't see it, here is Drew DeSilver's report on how Northwest stocks fared in the third quarter (nicely).

Today's Econ Haiku:

What Jamie's shakeup
Tells the folks at Morgan Chase:
We won't be Citi