All eyes and ears are on the Fed this week. With Bernanke in New York discussing potential new bubbles and the New York Fed getting heat for overpaying AIG’s many creditors, investors are having a tough time knowing exactly who to follow.

For those of you who hold up the “Fire the Fed” signs, move over. I am thinking about joining your camp.

Guess which investment bank has done the best under the patronage of Team Obama? Hint: It’s the same bank whose former CEO wrote the rules of the $700 billion TARP. The same bank that has had the good fortune of seeing two of its former employees fill the role of the past and current head of the New York Fed.

I know we’re only three and a half weeks into the new administration.  But I think it’s already time that informed lay people can start guessing how long Tim Geithner will last as Treasury Secretary.

In the currency market, the dollar sank against the euro. Late Friday, the euro was trading at $1.2587 vs. $1.2453 on Thursday. There were no hard economic numbers out on Friday. The major news item seems to have been the belief that President-elect Obama intends to name New York Fed President Tim Geithner as Treasury Secretary.

In the currency market, the dollar erased early losses and firmed against the euro for the second straight day. Late Thursday, the euro was trading at $1.5432 vs. $1.5459 on Wednesday.

In my recent article, “The FED’S End Run,” I wrote this: Beginning late Friday evening, March 29, we have been in the midst of an end run by the Federal Reserve System around Congress. The FED is about to be given authority to regulate the nation’s largest non-commercial financial institutions, including stocks and commodities.

Ben Bernanke’s testimony yesterday in front of congress is being taken by Wall Street as a signal that the Fed is prepared to continue to lower interest rates.

According to Bloomberg, traders now see a one-in-five chance of a half-point reduction in the benchmark rate, to 1.75 percent, at the April 29-30 Fed meeting.

Bernanke told congress yesterday that the Fed is “ready to respond to whatever situation evolves,” and referred to “considerable stress” in markets.