Connecticut Senator Chris Dodd has joined the baloney brigade -- the term Gary Weiss coined for the tinfoil hat crowd of conspiracy theorists who blame corporate problems on short-sellers.

Referring to the collapse of Bear Stearns, which some have blamed on shorts, Senator Dodd said that "This goes beyond rumors. This is about collusion."

Hold up. So Bear Stearns didn't collapse because of massive losses and a balance sheet like something out of a 1950s horror movie? No, apparently not. Bear Stearns collapsed because short sellers were betting it would collapse.

But isn't that like saying that the Patriots lost the Super Bowl because people bet against them in Las Vegas? The soaring short interest in Bear Stearns was an indicator of the company's problems, not a cause of them. The fact that JPMorgan needed guarantees from the Federal Reserve to acquire the company is proof of that.

In the classic comedy Rush Hour 2, Chris Tucker explains his method of detection to Jackie Chan:

James Carter (Chris Tucker): Lee, let me introduce you to Carter's new theory of criminal investigation: follow the rich white man.
Lee (Jackie Chan): Follow the rich white man?
James Carter: Behind every big crime there's a rich white man waiting for his cut.

And sure enough, according to MarketWatch, most hedge funds made out like bandits in February, as they had correctly forecast the subprime lending crisis that led to the collapse of companies like Novastar Financial.

In the mind-boggling world of credit derivatives (Incidentally, go pick up a copy of Traders, Guns, and Money), even the experts can't quite seem to figure out who was bearing the risk that allowed the funds to succeed. Some suggest pensions funds and overseas investors, but no one really knows.