Despite the fact that the Fed Chairman has a legion of fans within the economics community given his vast academic credentials, this is still a tough call. The White House and Congress do not seem to be big fans and what investors should realize is that (i) Bernanke was Bush’s man and is a card-carrying Republican; (ii) this is a political appointment, do not make any mistake about that, and (iii) claims that Mr. Bernanke saved the world is a bit misleading because it was his actions (or inactions) while at the Fed as governor 7-8 years ago that contributed to the bubble. Bernanke was a giant cheerleader for the leverage-induced economy during his time as the chief economist at the White House and while he was aggressive (and likely broke every rule in the book of central banking) in getting the credit market and economy back on track, he failed at the outset to realize the severity of the credit collapse and treated it as a liquidity event only for months.

The Fed’s economic forecast that was published just over a year ago for late 2008 and 2009 is an embarrassment, to say the least. Valuable time was lost under his watch and the question is (i) does the Administration look at his entire record as opposed to his period as a White Knight, and (ii) will Mr. B end up being a scapegoat once the economy relapses in the fourth quarter and the unemployment rate makes new post-WWII highs along the way. See the front page of the NYT for more — Bernanke, a Hero to his Own, Still Faces Fire in Washington. The search committee is already out, by the way, and the likes of Blinder, Yellen, Ferguson and Summers are on it.