Hats off, Shelby and Bunning. The latter is threatening to filibuster Paulson's proposed bailout of Fannie Mae (FNM) and Freddie Mac (FRE).

Paulson's absurd decision to ask Congress for "authority to buy unlimited stakes in and lend to the companies, aiming to stem a collapse in confidence" can only be described one way: Paulson Crosses Rubicon, Lands In 5th Dimension.

Earlier today, Senators Bunning and Shelby blasted Bernanke on monetary policy.

Bunning sure has the Fed nailed with this statement: "Now the Fed wants to be the systemic risk regulator. But the Fed is the systemic risk. I am not going to go along with that and will use all my powers as a Senator to stop any new powers going to the Fed."

Here are some interesting quotes from Bloomberg:

Senate Banking Committee Chairman Christopher Dodd: "I'm uneasy about giving this blanket authority without having any kind of checks."

Shelby: "I've never known Congress" to give "an open-ended blank check for somebody to fill in."

Shelby again: "When you're dealing with the taxpayer's money I don't think ambiguity has a place...We are potentially layering taxpayer resources on top of massive systemic risk."

Democratic Senator Jon Tester of Montana: "It could be a trillion bucks" that Paulson could appropriate under his proposed authority.

Republican Senator Jim Bunning of Kentucky: "The taxpayers have reacted and the market has reacted to your plan by driving down Fannie Mae shares 26% today, right now...Freddie Mac's are down 29% at this moment, just in case you are interested in how the markets are reacting to your wonderful plan."

"Bernanke told lawmakers it's 'important' for Fannie Mae and Freddie Mac bonds and stocks to rise...Paulson said the two companies are 'essential' because they represent the only "functioning" part of the home loan market."

Check that out. Bernanke said it's important for the stock market to rise (specifically Fannie Mae). How many mandates does the Fed have now?

Fed Mandates
 

• Price Stability
• Economic Growth
• Full Employment
• Rising Stock Market

So far, you have to give Bernanke an "F" on all counts.

Who’s Being Bailed Out?

Want to know? Here's the answer: China and PIMCO's Bill Gross. For more on this aspect, please see Operation "Rescue Fannie" Underway.

I thought this wheel was greased from the start, but with a few senators on each side of the aisle willing to stand up to Bernanke, perhaps there's a chance that this absurd bailout proposal will be killed where it stands.

Contact Your Senator Today!

It's time to contact your senator. Here's contact information for Senators of the 110th Congress.

Phone or email your Senators today. Tell them in your own words.
 

• No Fannie Mae bailout at taxpayer expense.
• Taxpayers should not have to bail out Bill Gross at PIMCO.
• Taxpayers should not have to bail out China.
• Bondholders wanted the extra yield, so bondholders should have to pay the price for the risk.
• Tell them that you agree with Senators Bunning and Shelby that "The Fed is the systemic risk."
• Ask them to read the Fed Uncertainty Principle and send along this link.

Finally, tell them you agree with Ron Paul that the Fed should not be given extra powers, but should instead be dismantled. The free market should set interest rates.