It takes a big man to concede that he was completely wrong about someone. I am only a medium-sized man, so I will only state that after totally trashing Ben Bernanke for the past year or so, I have been moderately impressed by his actions of the past 10 days.

I must tell you that up til now, I have been afraid that our current Fed chairman was a bit of a “deer in the headlights,” a former academic trying to fill outsized shoes who simply could not figure out what to do when the manure hit the fan.

My evidence for this fear has been a near-total absence of action for the vast majority of his term in office. Sure he executed two small short-term rate hikes right at the very beginning, but they were programmatic moves already placed in the pipeline by his downright frenetic predecessor, Alan Greenspan.

Since then, he has set a record as the least active chairman in the history of the office. Rather than preempt -- or even react to -- events, he makes terse statements noting how things are worrisome now. The economy is awfully slow, and inflation is awfully tenacious. But -- for reasons unnamed and at a time unspecified -- these worries might rectify themselves without any action whatsoever.

An interesting theory, but it does seem to render the mission of the Fed a bit moot. After guys like Volker and Greenspan, we’ve become accustomed to -- if not more activity, at least a bit more theoretical vigor. Last week, I must say that I was impressed, both by what Bernanke did and did not do.

On Monday the market approached a key bottoming moment: the 5% retracement from May’s close. As regular readers know, I have been expecting this exact move since, well, since the close of May, as similar drops have occurred six out of the past nine years.

One could easily imagine the heated phone calls Mr. B must have been suffering through as he prepared for last week’s Federal Open Market Committee meeting. And yet once again, the FOMC decided to keep its target for the federal funds rate at 5.25%.

Did we see the sort of deep Greenspanian situational analysis? Naaah: just the usual three paragraphs: “Economic growth was moderate… financial markets have been volatile… credit conditions have become tighter… nevertheless, the economy seems likely to continue to expand at a moderate pace… blah blah blah.” For all practical purposes, we could have been reading a mimeographed copy of his very first statement.

Now come the latter half of the week, things began to change in ways that might be hard to note by merely watching the share-price ticker. Yes, the market matched the previous low, and yes, this event was just as critical as the previous -- to a stock market guy.

The big difference was that this time it was the banks on the phone. Seems that they had funded the private purchase of major mortgage portfolios, for which we may label them as idiots. The whole point of selling off mortgage portfolios is for the banks to ameliorate risk. If they fund the opposing parties’ purchase of same, the banks are simply reacquiring said risk at a marked premium.

On a moral basis, you or I could feel free to tell the bankers to suffer the hoisting of their own petard. But in the end, Mr. Bernanke really is just the country’s head banker, no more and no less. And this time, he did act, and in the most judicious way.

Once again, he did not change the federal funds rate. Rather he dumped some $70 billion into the system by exchanging cash for the excess bonds lying about. This sort of act injects the cash needed to assure banks that they should continue to honor each other’s transactions, thus preventing bank runs and holidays. But unlike a rate change it is quite easy to undo without triggering anxious headlines on MSNBC.

So while I may yet argue with the validity of some of his methods and theories, I will now concede that Mr. Greenspan at least has some. It has also become apparent that he has absolutely no intention of rashly “rescuing” a market that is still up substantially over the course of his term.

Brass tacks? If it was a bad investing idea last week (banking stocks like Bank of America (BAC: NYSE) and Wachovia (WB:NYSE) come to mind), then it is still a bad idea today.

And what you ought to have bought last week, you should buy more of this week. Practically speaking, that means buying corn/energy companies like Archer Daniels Midland (ADM:NYSE), Monsanto (MON:NYSE) and CSX Rail (CSX:NYSE) (available at a marked discount as I sit to write!). And military winners like Raytheon (RTN:NYSE), Northrop (NOC:NYSE), and United Technologies (UTX:NYSE).

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