The verdict in the Bear Stearns fraud case has far-reaching implications for Wall Street execs, and it's all good — for them.

Ralph Cioffi and Matthew Tannin were found not guilty in Brooklyn federal court of fraud and other charges related to their blatant lying about their hedge funds, which were built on the subprime-mortgage house of cards.

In the only federal prosecution so far of any of the goniffs who helped cause last year's Wall Street meltdown, they got away with murder (of their investors' money), if you read the last year's indictment. Even their participation in the homicide of Bear Stearns (their funds lost almost $2 billion) was blessed by the jury, which said the prosecutors didn't give them enough evidence.

According to the indictment, back on March 2, 2007, Cioffi and Tannin were freaked out by their funds' extremely shaky — even doomed — liquidity because the subprime mortgages underlying the CDOs they were peddling were collapsing. They drank "a vodka toast" privately just for surviving the previous month without having to fold their huge hedge funds, and they kept their worries to themselves, not even telling their bosses, apparently. To investors, however, they lied, saying everything was hunky-dory (lie) and that they were putting their own money into their funds (lie).

The next day, March 3, according to the indictment, Cioffi told Tannin that things could be worse: "[W]e have our health and families ... [w]e are not a 19-year-old Marine in Iraq. ..."

The only real prosecution for securities fraud relating to the subprime crisis has flopped: Bear Stearns hedge fund managers Ralph Cioffi and Matthew Tannin were acquitted today of fraud charges. A federal jury in Brooklyn took less than six hours to reach the verdict, after a month-long trial.

They were indicted in June 2008, a year after two funds they managed failed, costing investors a cool $1.6 billion. The duo were accused of not telling investors about the the shaky subprime-mortgage foundation of their funds.

The WSJ notes that the trial "trial was viewed a test of the boundary between putting a positive spin on bad results and outright fraud."

As my colleague James Lieber recently noted in a Voice cover story, Cioffi and Tannin were the targets of a Bush-era prosecution (and they were hardly big fish), and Barack Obama's crew has yet to launch a major securities fraud prosecution of its own.

In any case, the not-guilty verdict makes such prosecutions even more unlikely now.

Goldman Sachs CEO Lloyd Blankfein says he's doing "God's work." He probably is, considering God's dark sense of humor.

Don't rely on second-hand reports of this revelation about Blankfein's true calling as leader of the bank that shagged us. See the Sunday Times (U.K.) profile of Blankfein, "I'm doing 'God's work.' Meet Mr. Goldman Sachs," by John Arlidge. A terrific piece. Nothing much new, but it might give you some insight about exactly why you're either so jealous of or pissed off at schnooks like Blankfein.

Here's the paragraph in question:

My personal favorite graf from Arlidge's breezy description of life inside Goldman's HQ:

Quick roundup in the WSJ Deal Journal by Michael Corkery about Goldman Sachs's great week:

• Lusting after cheapo Fannie Mae housing tax credits so it can offset its taxes and perform its required community-reinvestment duties without creating new affordable housing.

• Scoring swine flu vaccine at a higher rate that Memorial Sloan-fucking-Kettering Cancer Center, for Christ's sake. And getting the vaccine while kids around the nation are told there's no vaccine to be had.

Like a scurry of squirrels, companies are stashing a greater percentage of assets in cash than at any time in the past 40 years. They're clearly hoarding for an unclear winter that could turn into a nuclear winter when the commercial real-estate market crashes and the Federal Reserve starts to kick out some of the props under this bubblicious market.

Just remember that the next time you hear the banks, which are saving, moaning that consumers need to step up their spending to save the economy.

So this week's Fed confab takes on special meaning. When will Ben Bernanke and crew start to unwind their frantic pumping of money into the economy and start pulling back?

Bloomberg's Craig Torres lays it out well this morning, saying there could be big problems if Bernanke "is counting on private investors to fill the void left by the Fed when its purchases [of mortgage-backed securities] ends."

It wasn't long ago when Frank DiPascali was called the "key" to the "global intrigue" of Bernie Madoff's Ponzi scheme.

That was when his lawyer (Marc Mukasey, son of Bush era Department of Terror chief Michael Mukasey) crowed that DiPascali would be a snitch ""of a historic nature, somebody who can pull the curtain back on a fraud and answer a lot of questions" — questions that "the whole world wants to be answered."

You want answers? You want financial crooks brought to justice? Barack Obama's administration isn't doing it, as my colleague James Lieber points out this week. The best steps toward justice so far in both the Madoff scandal and Wall Street's meltdown are being taken by 2nd District federal judges in lower Manhattan. They're talking the talk and walking the walk.

In the murky Bank of America/Merrill Lynch affair, federal judge Jed Rakoff previously blasted both the bankers and Obama's SEC, rejecting their suspiciously kid-gloved settlement and ordering the case to trial. And now, in the Madoff scheme, federal judge Richard Sullivan has rejected a joint request by Obama's Justice Department prosecutors and DiPascali's lawyers to grant bail to the Madoff flunky.

Thousands of people set up shop this week to protest the big banks and the American Bankers Association convention in Chicago, armed with banners, sneers, and shouts. No big deal to the U.S. media, apparently, so read this morning's account in the Guardian (U.K.), "Protests at US bankers' convention."

Is it that the number of protesters seems small? It's not that most Americans are happy, that's for sure: Consumer confidence has now fallen to a 26-year low, according to the venerable Conference Board gauge. Economists had expected confidence to rise slightly, which shows you how little any of us really know about what the fuck is going on.

Maybe people are too depressed to take the streets and reporters are too depressed about the state of the dying newspaper industry to take their notebooks and cameras to the ABA convention. Look in vain for coverage of this in even the Chicago Tribune. The WSJ's account is solid and thorough, as usual, but the NYT relies on a Reuters story and a DealBook post.

Feinberg's task was difficult, but he wielded more of a loofah than a whip. And the idea of the Fed Reserve Bank's stepping in to regulate compensation at banks is little more than fancied-up self-regulation by the banks. By its nature, the Fed is not much of a regulatory agency except in macroeconomic matters. Just look at the board of the New York Fed: It includes such "regulators" as JPMorgan Chase CEO Jamie Dimon, plus GE CEO Jeff Immelt and Pfizer CEO Jeff Kindler. They'll keep those Wall Street execs in check.

No wonder Warren Buffett says the U.S. economy has improved "tremendously." Just look at Wells Fargo's record third-quarter profit. Buffett's the bank's biggest shareholder, at 6.5 percent, or more than 300 million shares.

Details of the earnings picture, at 247wallst.com, about what you can reasonably call Buffett's banks. A bigger picture? Buffett as a "lagging indicator" of the bubblicious current market.

East Coast papers are continuing to bow and scrape before U.S. Attorney Preet Bharara for prosecuting the Galleon alleged $20 million insider-trading case that has nothing to do with the Wall Street meltdown.

Meanwhile California Attorney General Jerry Brown is actually pursuing one of the Street's biggest players, suing Boston-based State Street Bank for $200 million for an alleged fraud of public funds.