Just Some Random Thoughts...

Sorry for the long break, but I've been busy trying to put a few things together. Reading the paper this morning, I have come up with some random thoughts, which I would like to put forth at this time. Very little is directly fixed income related, but, as I engage in new endeavors, I am seeking to broaden my horizons.

First, I don't think I need to go into the details of the extreme level of irony that is conjured up by the raft of Missouri politicians clamoring for anti-trust protection for Anheuser-Busch, a company that holds roughly 50% of the domestic beer market. As much as I'd rather not see A-B sold off to the Brazilians (it is also ironic that the popular press, not the financial press, keep referring to InBev, as a Belgian company even though senior management all came from AmBev and are Brazilians), anti-trust isn't the way to go. Here's a thought: How about coming up with a plan where A-B would be better off on its own and convincing the stockholders that they should side with current management. It maybe too late for that, but that would be the free market way to handle it. Hiding behind anti-trust means they can't compete effectively. That speaks volumes with regard to A-B as a company.

Next we have Barack Obama criticizing John McCain on changing his mind on offshore drilling. The reason Sen. Obama given is weak, but at least it was different from the tried and true objection of the potential environmental disaster potential of offshore drilling. I think that no one would want to see an environmental problem, but some comfort should be taken in the fact that during Hurricane Katrina, certainly a significant event, no real environmental damage occurred. Sen. Obama stated that offshore drilling won't help lower prices for five years, so it should be allowed. For a guy that is holding himself out as an agent for change in America, that is an odd stance. At $10/barrel, it was easy to say don't drill offshore (or in ANWR, or in the Rocky Mountains, where the largest reserves of oil in the world is trapped in shale) because it didn't make economic sense. The Cubans have already sold drilling rights to the Chinese 60 miles off Key West. The technology is much better than it was almost 30 years ago when most drilling on the Continental Shelf was banned. Just announcing the opening of the shelf to drilling will take some of the speculative bid out of the oil market, the real cause of the spike in oil prices. However, the decision to drill shouldn't be made in a vacuum (which it will, for now). It needs to be part of a comprehensive national energy policy, one that focuses the nation on a day when we are not utterly dependent on foreign oil. If that means a sliding-scale carbon tax, then so be it.

Finally, the Fed needs to raise rates now. For those of you that are regular readers of this blog, you would recall that I was opposed to the easing in the first place. The tangible benefits, of which there really haven't been any, have been far outweighed by the detriments, most notably being a significant contributor to global inflation. Rates at which money is lent hasn't changed in any meaningful way. Even the banks haven't benefited, although maybe their results would be worse if they weren't able to pay virtually zero percent on deposits. Take the cuts back, and use other means to help out the financial system.