Morning News - Iraq, Iran, Israel, and Interest Rates Edition
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Although widely expected, the Fed’s decision to leave short-term interest rates unchanged produced a massive rally on Wall Street – the Dow was up 331 points. The Fed’s decision was 10-1, with Bank of Dallas President Richard Fisher casting his fifth dissent of the year, preferring a rate increase. Essentially stuck between a rock and hard place – slowing growth and rising inflation – the Fed indicated it could leave rates unchanged for the foreseeable future, likely to at least the end of the year. Another drop in oil prices – $2.24 a barrel – likely contributed to the rally. Average gas prices have fallen for 19 straight days to $3.87 a gallon, but they're still more than $1 higher than a year ago. Experts say barring some geopolitical incident, oil could fall below $100 a barrel by the end of the year.
Fortune magazine reports on 10 CEOs who it thinks are at risk of losing their jobs. Using its own "Misery Index" -- which takes the percentage decline in the company's stock over the past year and then adds a point for each million dollar of reported 2007 compensation – the magazine thinks the following executives are in trouble: Lehman Brothers’ Richard Fuld; Fannie Mae’s Daniel Mudd and Freddie Mac’s Richard Syron; Washington Mutual’s Kerry Killinger; Merrill Lynch’s John Thain; GM’s Rick Wagoner; Sirius’ Mel Karmazin; Starbucks’ Howard Schultz; GE’s Jeff Immelt; and Yahoo’s Jerry Yang.
How to deal with Iran's nuclear program has already become the top issue in the race to replace Israeli Prime Minister Ehud Olmert, with candidates from the Kadima and Likud parties talking tough. U.S. officials are concerned more heated rhetoric among candidates and between Israel and Iran will spook the markets and drive oil prices higher.
Iraq is projected to amass an $80 billion budget surplus over the next four years due to higher oil prices, which has some members of Congress hopping mad, arguing the United States should not be paying billions of dollars for reconstruction projects when Iraq could pay them itself.
John McCain did something yesterday no presidential candidate has done in decades – he visited a nuclear power plant. McCain is calling for the construction of 45 new plants by 2030.
The New York Times has an expose of sorts on Obama’s fundraising machine, arguing despite his emphasis on how much money he’s raised from small donors, one-third of his donations are in amounts larger than $1,000 and he has about 500 bundlers who have raised $50,000 or more. The largest group of bundlers are lawyers. And while Obama says he does not accept money from lobbyists or PACs, his big donors clearly have political agendas.