---
THE UNIVERSITY DAILY KANSAN
THURSDAY, MAY 1, 2008
CROSSROADS KC
412 7 E18th KKC00 AT GRINDERS
WWW.CROSSROADS.KC
FRIDAY 2 - FIRST FRIDAY!
FREE SHOW FOR 21 & UP / UNDER 21
POMEROY
MON MAYS
CINCO DE MAYO!
SON
VENEZUELA
FRIMAY9
LITTLE FEAT
FRI MAY 23
TUE JULY 1
RUSTED ROOT
SATJUL12
BETTER THAN EZRA
TUE JUN 24
MATISYAHU
CROSS CANADIAN RAGWEED JASON ISBELL AND THE 400 UNIT
SUN JULY 13
WEEN
FRI JUL. 25
MARC
COHN
8A NEWS
FRI AUG 8
BoDEANS
PRESENTED BY
GET TICKETS AT GRINDERS IN KANSAS CITY,
BOTTLENECK IN LAWRENCE,
OR ONLINE AT
WWW.CROSSROADSKC.COM
THE GRANADA
1020 MASS ST. LAWRENCE KS
THU MAY 8
DUSTY RHODES
& THE RIVER BAND
FRT MAY 9
RECKLESS KELLY
BUY TICKETS ONLINE
www.pipelineproductions.com
Federal Reserve cuts interest rates Wednesday
Rates cut to lowest point in nearly four years as nation teeters on edge of recession
BY JEANNINE AVERSA ASSOCIATED PRESS
WASHINGTON — Scrambling to shore up the faltering economy, the Federal Reserve cut interest rates to the lowest point in nearly four years Wednesday as the nation teetered on the edge of recession.
》 ECONOMY
Wall Street rallied at first but then pulled back, concerned that the reduction might be the last for a while.
Traders and Specialists look at a monitor on the trading floor at the New York Stock Exchange Wednesday while the Fed announced its decision to cut a quarter point interest rate, the seventh reduction since September.
In fact, the Fed's trim was smaller than those of recent months amid indications the central bank might pause to see if months of powerful rate-cutting medicine and billions of dollars in stimulus checks will be enough to lift the country out of its slump.
Chairman Ben Bernanke led a divided Fed, in an 8-2 vote, in slicing its key rate by one-quarter percentage point to 2 percent.
ASSOCIATED PRESS
In turn, the prime lending rate for millions of consumers and businesses
average up more than 178 points — lifting it above 13,000 for the first time since early January — right after the Fed action. Then traders' caution returned, and the index ended the day 11.81 points below where it started.
fell by a corresponding amount, to 5 percent. The prime rate applies to certain credit cards, home equity lines of credit and other loans. Both rates are the lowest since late 2004.
The Federal Reserve, which has been dropping rates since last September, turned much more forceful early this year when housing, credit and financial problems worsened. Rate reductions in January and March alone marked the most aggressive intervention in a quarter-century in an effort to reenergize consumers and businesses
Although the Fed didn't take another reduction off the table, a growing number of economists believe the central bank is winding down its rate-cutting campaign. Barring another hit to economic growth, they believe rates probably will stay where they are — perhaps through the rest of this year — in part because the Federal Reserve is concerned that further cuts could join with galloping energy and food prices and spread inflation dangerously higher.
"The Fed didn't completely shut the door on rate cuts but they closed it part way."
By all accounts, the country's
Enthusiastic Wall Street investors drove the Dow Jones industrial
MARK ZANDI Chief economist at Moody's Economy
s, the country's economic health is fragile.
The Bottleneck
737 Mass St • Lawrence Kansas
Friday, May 2nd
Split Lip Rayfield
Wednesday, May 7th
WhiteWater Ramble
Friday May 9th
The Breeders
Tuesday May 23rd
The Dirtbombs
w/ Terrible Twos / Dan Sartain
MONDAYS ARE $1.50 ANYTHING!
The economy crawled ahead at a pace of just 0.6 percent from January through March as housing and credit problems forced people and businesses
Both men have a reputation for being especially vigilant about fighting inflation. At the Fed's previous meeting in March, they opposed cutting rates by a whopping three-quarters point and preferred a smaller reduction.
Two members — Charles Plosser, president of the Federal Reserve Bank of Philadelphia, and Richard Fisher, president of the Federal Reserve Bank of Dallas — opposed cutting rates Wednesday, a crack in the usually unified front the Fed often shows the public.
"The Fed didn't completely snut the door on rate cuts but they closed it part way," said Mark Zandi, chief economist at Moody's Economy, com. "I think the overall message was they've done a lot already to help the economy and this will be enough. But they stand ready to do more if that is needed."
At the same time, many economists believe the economy already is declining.
"Recent information indicates that economic activity remains weak," the Fed said. "Household
Bernanke's juggling act is getting harder. Fed policymakers are trying to bolster economic growth, and at the same time they are mindful that they can't let inflation get out of hand. The very rate reductions the Fed depends on to energize the economy can also sow the seeds of inflation down the road.
and business spending has been subdued, and labor markets have softened further. Financial markets remain under considerable stress, and tight credit conditions and the deepening housing contraction are likely to weigh on economic growth over the next few quarters."
Under one rough rule, if the economy contracts for six straight
months it is considered to be in recession. However, that didn't happen in the last recession — in 2001. A panel of experts at the National Bureau of Economic Research that determines when U.S. recessions begin and end uses a broader definition, taking into account income, employment and other barometers. The bureau's finding is usually made well after the fact.
Job losses for the first three months of the year neared the staggering quarter-million mark, and a government report on Friday is expected to show that employers shed jobs again in April. The unemployment rate, now at 5.1 percent, also could creep higher in April and hit 6 percent early next year, analysts say.
to hunker down, the Commerce Department reported hours before the Fed's action. Growth had been just as feeble in the prior quarter.
The Fed's previous rate reductions, which take months to work their way through the economy, should help lift growth in the second half of this year. The government's $168 billion economic-stimulus package — including tax rebates that started flowing to bank accounts on Monday — also should help energize activity, the Bush administration, Bernanke and private economists have said.
ELECTION
BY NEDRA PICKLER ASSOCIATED PRESS
Democrats continue to chase superdelegates
WASHINGTON - Barack Obama is closing in on Democratic presidential rival Hillary Rodham Clinton's advantage among superdelegates, building on his lead in the primary race even as he faces troubled times.
Party leaders are encouraging superdelegates to pick a side by late June to prevent the fight from going to the national convention in August, and it seems some are listening as the race enters its final five weeks of voting.
Chelsea Clinton got a superdellegate for her mom while campaigning
in Puerto Rico on Wednesday, just as Obama press secretary Bill Burton sent out a statement announcing the support of Rep. Lois Capps. The statement didn't mention the personal connection — Capps is Burton's mother-in-law.
Clinton had a big jump start among superdelegates, many of whom have ties to the Clintons and backed her candidacy early on. But most of the superdelegates taking sides recently have gone for Obama, who has won more state contests.
Obama trails Clinton by just 21 superdelegates, 243-264, cutting her lead in half in less than two months. This week, he picked up seven delegates to her four.
About 230 superdelegates remain undecided,and about 60 more will be selected at state party conventions and meetings throughout the spring.
The superdelegate chase is a key piece of good news for Obama in what has been a bad week. The Illinois senator is coming off a big loss in Pennsylvania, steeped in controversy surrounding his outspoken former pastor while Clinton
fares better against Republican likely nominee John McCain in the latest Associated Press-Ipsos poll.
Superdelegates are nearly 800 elected leaders and Democratic party officials who aren't bound by the outcome of state contests and can cast their ballot for any candidate at the national convention. They are especially valuable in this race since neither Clinton nor Obama can get enough delegates to win the nomination through the primaries and caucuses held
But the problems aren't stopping his ability to win support from superdelegates who are likely to cast the deciding votes in the Democratic race.
across the country.
Obama now leads in the delegate count overall 1731.5 to 1598.5 for Clinton. A candidate needs 2,025 delegates to win the nomination. About 230 superdelegates remain undecided, and about 60 more will be selected at state party conventions and meetings throughout the spring.
Clinton had stalled in drawing their support as Obama won more states than she, but Clinton won Pennsylvania last week and has been able to announce a new supporter every day this week — two on Wednesday.
Two of the most important superdelegates to sign on this week come from the states that vote next — North Carolina and Indiana, which hold primaries on May 6 and are the largest states left to vote. Obama got the support of Rep. Baron Hill of Indiana, while Clinton won the backing of North Carolina Gov. Mike Easley even though Obama is expected to win the state.
1