The most striking part of the move by the Federal Reserve to allow financial firms to borrow up to $200 billion in Treasurys in exchange for using troubled mortgage-backed securities as collateral is what didn't happen. Interest rates were not lowered.
It had been widely speculated that another drop in interest rates was on the way as the economy struggled, and it was widely suggested that such a move would have been the worst thing the Fed could do. Chairman Ben Bernanke has lowered rates several times to pump fresh capital into the marketplace, but the side effect of lowering the value of the dollar has had a far bigger negative impact than the positive of the additional capital. The price of a barrel of crude oil, for example, climbed above $109 and the euro is at an all-time high vs our greenback.
By doing what the Fed did today, they diplayed some new creative thinking that shows they are truly working to solve the problems faced by our economy, instead of using the old-fashioned response of lowering rates -- because it's what we always do and it seemed to work before. The stock markets had their best day in six years.
Now, I've never pretended to be an expert in economics. I have no idea about the downsides of the agreement and whether it will really help solve the problems in the financial markets, or be another band-aid or worse, actually hurt us in the long run. But the Fed has now realized that interest rates have been lowered too far and that the resulting value of the dollar has sunk too fast. That's good. A good start.
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First one to make strengthening the value of the dollar a campaign issue wins.
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There's certain things about California that are better than New York, such as weather, a more relaxed lifestyle and a governor that women would be willing to pay to share a bed with than the other way around.
The downfall of Eliot Spitzer would be amazing if, in fact, it was a surprise. But it's not. These politicians are like athletes, they think they can get away with anything, because many of them do. Lord knows what others are up to (probably been a lot of canceled paid dates this week). Eventually, though, they'll get caught, whether they be Barney Frank or Larry Craig. Even Bill Clinton was slapped on the wrist for his hanky-panky.
In general, I really don't care if someone goes to see a prostitute or not. Their business. Even understandable for someone who is disabled or a military member on long term deployment. David Vitter, the senator from Louisiana, who cares what he does? Don't like it? Don't vote for him next time.
Spitzer is another matter. He's made prosecutions of prostitution rings, like the one he frequented, a central part of his career. He's made ethics the backbone of his governorship. It's being said that he's destroyed careers and lives of others in order to get ahead (the guy appears to be highly disliked). And it's reported today that he spent tens of thousands of dollars on hookers and preferred to go without condoms. That's bad financial and social judgment.
He's just another politician who hoped you would not notice or care. He was wrong on the noticing. Let's hope he's also wrong on the caring.
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Former Democratic vice-presidential candidate Geraldine Ferraro is under fire today for suggesting that the reason why Barack Obama has risen so high in his campaign is because he's black. Ferraro is a major backer of Hillary Clinton's campaign, sitting on her finance committee and speaking at rallies.
Under fire, she's holding to her position. She's also right to an extent.
Obama's positive campaign about hope and uniting America is inspirational in large part because of what he is, a black man. Voters are used to hearing about the struggles of black America, so when this candidate comes out and tells us how great things can be, we love it. Average White Man can do the same thing and probably do well, but not get as far as Obama has.
This is about proportion. His success is in no way entirely because of his skin color, but his race is definitely not a non-factor. It has something to do with his success. There's always a knee-jerk reaction against people who enter race into an equation, even when they're correct and not malevolent. Ferraro should get a pass on this one.
