DEAR BEN (YES, YOU, MR. BERNANKE),

Thanks for that confusing message last week, which shaved nearly 4% off our stock portfolios. I know, I know, you were trying to calm a market worried the U.S. is sliding back into recession when you promised to buy more government debt.

But, dude, you’re scaring people.

For a start, your plan won’t help our slowing economy much. The money you’re reinvesting in Treasuries is coming from mortgage securities in the government’s portfolio that have been paid down, which is roughly $20 billion a month. You aren’t injecting new money into the markets, just stalling the ebb in previously provided funds.

Interest rates already are low, and as Morgan Stanley argued, the sum is trivial.

What mattered was the symbolism, and by vowing to prop up the economy, you are confirming investors’ nascent fears that our recovery has weakened enough to require propping. Maybe this was your way of reassuring us you’re on the case. But “a half-measure meant to instill confidence actually undermined it,” says BTIG chief market strategist Mike O’Rourke. By the time you and Anna settled down to watch “So You Think You Can Dance,” risky assets from crude oil to copper were selling off, and the dollar was rebounding in a flight to safety.

On top of that, you set off a Treasuries rally that drove the yield on 10-year notes to a 16-month low below 2.7%, while that on 2-year Treasuries dipped to 0.513%, the lowest ever. Investors have been sniffing anxiously for signs the U.S. is entering a Japan-like era of puny yields and stagnant growth, and slumping Treasury yields reek of deflation.

On the brighter side, I suppose your bias has shifted from monetary tightening toward neutral, so we can all quit worrying, at least for now, about when the Federal Reserve must raise interest rates. But we’ve been far more distressed lately about staid growth than rising rates. Just last week, Cisco Systems (ticker: CSCO) exacerbated those fears when it told investors to expect slower revenue growth this quarter, and JPMorgan cited deteriorating computer orders in downgrading Intel (INTC).

Already, this has been the summer of indifference and indecision, with the Standard & Poor’s 500 index flip-flopping desultorily between 1020 and 1120. Now, the crowd of fence-sitters is swelled by the suspense over what you might pull next. You won’t speak publicly until the Fed’s late-summer annual retreat at Jackson Hole—and even then you might not clarify things much, given your fondness for indirect sentences and shaded subterfuge. So what are we to do until then?

THE DOW JONES INDUSTRIAL Average ended its three-week winning streak and fell 350, or 3.3%, to 10,303. The Standard & Poor’s 500 ceded 42 points and has retreated six of the last seven sessions. The Nasdaq Composite Index gave up 115, or 5%, to 2173, while the Russell 2000 fell 41, or 6.3%, to 609.

Clearly, the economy is slowing anew after its government-sponsored rebound. Volatile weekly unemployment claims increased last week, and retail sales improved a ho-hum 0.4% in July from June. The global- growth glow dimmed as the Chinese imported goods at a less giddy pace.

A lousy economy doesn’t always mean lousy corporate profits. Per-share earnings of S&P 500 companies are up 84% from a year ago, or 22% excluding financials. Revenues are up 6%, or 16% at more global companies.

Stellar profits are made possible by severe cost-cutting and buttressed margins. That’s why data last week showing U.S. productivity wilting 0.9% from April to June, its first droop in nearly 18 months, was worrisome.

“Productivity is slowing, and corporations have little fat left to trim on the cost side,” writes Morgan Stanley strategist Gerard Minack. If margins stop growing, will projections for 2011 earnings have to come down?

Uncertainty about jobs, consumer zeal, corporate margins, monetary policy and tax changes will cap any stock rallies in the short term. But downside damage could be limited too, not least because stocks look reasonable compared to bonds.

Goldman Sachs, for one, thinks there is a “meaningful probability” of another recession, but pegs the odds at 25% to 30%.

Still, “several components of economic activity that usually help drag the economy down during recessions have already suffered large hits and are unlikely to fall much further, if at all,” argues economist Ed McKelvey (Source: Barrons Online).