Friday morning, Federal Reserve Chairman Ben Bernanke stated that the central bank is ready to take further action if necessary. In prepared remarks, Bernanke told the assembled conference at Jackson, Wy., that the Fed would consider another large-scale purchase of securities should the economy "deteriorate significantly and signs of deflation were to flare."

Bernanke didn't give a specific plan of action, but his intimations suggest we could see another Fed purchase of securities, either government debt or mortgage securities. The Fed would do this to drive down rates on mortgages in hopes of prompting more Americans to spend money.

The Labor Department reported that producer prices rose 0.2% in July. Excluding food and energy, core producer prices rose 0.3%. Core prices are up 1.5% the the past year.

Last Friday the Labor Department reported that consumer prices rose in July.

The Labor Department's numbers for core prices are real joke. We spend most of our income on basics: food and energy. If you think there is no inflation, look at these numbers:

The Federal Reserve Open Market Committee (FOMC) issued its statement indicating again that interest rates will remain low for an extended period of time and that proceeds from agency debt and agency mortgage–backed and Treasury securities will be re-invested into Treasury securities. Thomas Hoenig dissented against the FOMC statement and wants a tighter monetary policy.

The FOMC mentioned the economic improvement continuing albeit at a reduced pace but indicated that it was a mixed picture with high unemployment and depressed housing. It also mentioned that "bank lending has continued to contract."

Federal Open Markets Committee (FOMC) meets again on Tuesday. Though the August meeting of the FOMC is generally uneventful, this time there is speculation about whether the FOMC will resort again to some quantitative easing -- a way of pumping additional money into the financial system.

Fed chairman Ben Bernanke has already hinted at such a move, given that economic growth has clearly slowed. Last week's disappointing employment numbers are the latest confirmation of that. The question is whether the Fed's decision to take action will happen at this week's meeting, perhaps aggravating deflation fears, or it may wait until the September meeting, at which point it risks impacting the upcoming mid-term elections.

Oil prices headed lower on Wednesday after the Department of Energy announced a surprise increase in inventories last week.

Analysts had been expecting to see oil reserves decline last week by 1.4 million barrels, but the weekly inventory report showed that inventories actually increased during the week by 400,00 barrels.

Nassim Taleb, author of The Black Swan, predicts trouble ahead for world economies. The Black Swan is a metaphor for unexpected events because people view the world as something structured, ordinary and comprehensible.

Some of his statements are factual, and some are conjecture. Here is list of quotes from his interview on CNBC:

Today's Beige Book was effectively ignored because Ben Bernanke's testimony defended the low-rate or no-rate policies that left no concern of a Fed rate-hike rush any time soon. EIA weekly inventories showed a surprise for the bullish case based on draw downs and T. Boone Pickens called for $95 oil... And earnings are so far up in most of the DJIA components.

Here were the unofficial closing bell levels:

Dow 11,123.11 +103.69 (0.94%)
Nasdaq 2,504.86 +38.87 (1.58%)
S&P 500 1,210.65 +13.35 (1.12%)

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Most of this past week the stock market was erratic. News from Asian and American Markets was generally positive, sending the indexes higher, until unsettling news from the European Union let the air out of the tires, resulting in 100 point swings of the Dow Jones Industrial Average, which ended Friday up about 50 points for the week at 10,850.36.

Each day started upbeat and then we would hear about Greek debt, bonds coming due, Germany pushing for IMF participation in any plan to help Greece. Finally when this looked to be settled, we then got news of economic turmoil in Portugal. This activity stimulated me to write the following recent commentary:

Today could be called the Bernanke cheer. Ben Bernanke managed to successfully convince Wall Street that interest rates were not going to rise any time soon. A slate of favorable earnings also added to spate of news that overseas emerging markets.

These were the unofficial closing bell levels:

Dow 10,374.84 +92.43 (0.90%)
S&P 500 1,105.12 +10.52 (0.96%)
Nasdaq 2,235.59 +22.15 (1.00%)

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Have you heard the news? Federal Reserve Chairman Ben Bernanke is so deliriously happy about the way economic recovery is progressing that he's already making plans to chill the entire party. That's right, the Fed Chairman is already getting all shaky and whiny about inflation. Who could blame him? It's what he does best.

Now here's the rub: Ben Bernanke is plotting his quicksand parade stopper at the very same time that President Obama is calling for sweeping efforts to break loose credit markets for small business expansion and for employers to hire more workers.

The current investigation of the American International Group (AIG) bailout by Congress has brought to light the inner workings and secret deals that were made.

Center stage in the investigation is the New York Federal Reserve. There are 12 Federal Reserve Banks that operate under the supervision of Federal Reserve's Board of Governors, chaired by Ben Bernanke. Member bank presidents are appointed by the nine member board, who themselves are appointed by other bankers.

The Federal Reserve Open Market Committee (FOMC) issued its statement indicating again that interest rates will remain low for an extended period of time. The decision was not unanimous with one dissenting vote.

The Fed continues to avoid any potential language which could disrupt the financial markets. Chairman Bernanke, a student of the Great Depression, does not want to do anything to damage the current stabilization in the economy. This is particularly true with a controversial vote on the Chairman's confirmation coming soon.

Senator Russ Feingold, D-Wisconsin, announced Friday he will vote against U.S. Federal Reserve Chairman Ben Bernanke's re-nomination, Reuters reported, even as chatter surfaced that Senate Leaders may fall short of the 60 votes needed for the re-appointment to clear procedural hurdles. A vote on the re-nomination is expected next week.

As it stands now, the reappointment will likely require Republican votes to pass, and to-date since the start of the Obama presidency, that's been an uncertain proposition, to say the least.

Big Ben Bernanke is letting his opinions be known early in 2010, and he is pointing the finger of blame for the economic crisis right at weak regulation. Bernanke is waiting for confirmation of his second term as Fed chair and he is looking for greater regulatory authority from Congress.

Bernanke told the American Economic Association that "Stronger regulation and supervision aimed at problems with underwriting practices and lenders' risk management would have been a more effective and surgical approach to constraining the housing bubble than a general increase in interest rates." This statement was part of Bernanke's response to accusations that the Fed was a major contributor to the financial crisis. The Fed head believes that the interest rates set by the Federal Reserve from 2002 to 2006 were appropriate.

'Tis the season to be greedy! Fannie Mae (FNM) CEO, Michael Williams, and Freddie Mac (FRE) CEO, Charles Halderman, will each receive $6 million in total compensation for 2009!

How would you like to work for a company that will guarantee every single loss you have. The U.S. Treasury said that they would absorb all losses for Fannie and Freddie for the next three years, if necessary.