Fed Drops Interest Rates - Again

Watching inflation or the stock market? That was the question after the FOMC decided to drop both the Fed Funds Rate and the Discount rate by a quarter basis point to 4.5% and 5% respectively.

The move was a little surprising after GDP reports showed a decent 3.9% growth on an annual basis. But credit concerns still predominated as the subprime mess still looms across the economic horizon and a growing economy will be dependent on readily access to cheap loans.

Of course, our export economy is also addicted to the cheap dollar, one of the reasons for the decent GDP figures. No surprise that the lower interest rates pushed a barrel of crude to nearly $100 as the dollar weakened on the news of the Fed decision.

FOX with a Ticker

In the aftermath of News Corp buying Dow-Jones and its Wall Street Journal, I was curious about the premiere of Fox Business News. I'm not the biggest fan of the WSJ but I do have respect for its tradition and the role of financial journalism in general. But after watching some of the first two days of FBN, I wonder if two people are rolling in their graves.

The company that Charles Henry Dow and Edward Davis Jones created in the post-Civil War era when the US corporation was emerging as a major economic power is almost synonymous with America's economic rise. Dow and Jones first started with the Customer's Afternoon Letter and in July of 1884 the created the first Dow Jones Industrial Average with 11 companies. The WSJ was created in July of 1889 with the explicit goal of offering news, not opinion.

Well, it seems its the same old Fox news. "We Report, You Decide" - give me a break. One indication is that they are rehashing David Asman, who seems to have his microphone so far up... well never mind on that. Asman is proficient in the language of cynicism, the chief currency of Fox News.

Of course we should have expected this, when Murdoch himself announced that the new network would be “more business friendly than CNBC”. I guess that is like Fox News being more administration friendly. CNBC, the financial news network owned by GE, is quick to “leap on every scandal,” said the NewsCorp chief according to according to BusinessWeek.com, whose parent, McGraw-Hill is no small corporation itself. Well, I don't know about you, but I'm sure glad CNBC jumped on that little scandal called WORLDCOM.

Well, perhaps the market is giving us a vote on the FBN. Down 248 points - from 14,160 Monday morning to 13,913 today - is one indication that Fox Business News is getting the thumbs down from Wall Street.

The Politics of Global Warming

Congratulations to Al Gore for sharing the Nobel Peace Prize! And relax, the Supreme Court did not award it to George Bush.

The issue of global warming is a curious one politically as it places science at the fulcrum of public policy. This places the Right on one side frightened over a possible change in the status quo and enhanced economic and social power going to government. The Progressive Left sees global warming as a vehicle to address a range of problems from dependence on oil, carbon-based pollution, and the possibilities of new industries emerging around alternative energy.

Big Oil and other entrenched powers such as American auto and electricity industry have a lot to lose if the public embraces the threat of global warming. Whereas the war on terrorism has been good for the oil industry, the war on warming will be its undoing--unless it can stall it until it can find ways to capitalize on it.

The "Charge it to My Kids" Republicans

Its no wonder that the Republicans are trying so hard to kill the inheritance tax (Otherwise known as the "death tax"), they know that their kids are going to need all the help they can get to pay the tab they have been running up. Thomas Friedman came up with the catchy but apt phrase after watching Dana Perino, the White House press secretary, fumble out this answer in response to a question about raising taxes to fund the war. “Does anyone seriously believe that the Democrats are going to end these new taxes that they’re asking the American people to pay at a time when it’s not necessary to pay them?” added Ms. Perino. “I just think it’s completely fiscally irresponsible.” In other words, why should I pay taxes now if I can just borrow the money for the war from China or Japan and have my kids pay the bill.

Read more:

http://www.nytimes.com/2007/10/07/opinion/07friedman.html?ref=opinion