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"A View From Across The Pond" an Englishman's personal view of the week's news in the USA - from Erithacus
As the Federal Reserve cut interest rates by just 0.5% on Tuesday rather than the 0.75% hoped for by investors, stock markets tumbled. Although this was the third cut this year and the wording of the announcement from the Federal Reserve suggested that there was every possibility of another reduction in rates before the next scheduled meeting on May 15th, the Dow Jones fell by 239 points to 9720, the lowest since March 24th 1999. The Nasdaq plunged by 4.8% and hit its lowest point since November 13th 1998.
The following day, Wednesday, brought further falls with the Dow Jones losing 233.76 points to 9487, close to a 20% drop from its peak of 11722.98 on January 14th last year. The Nasdaq did a little better, finishing 27.22 points down at 1830.22 although for a time in early trading it had gained more than 2%. Continued falls on Thursday left the Dow Jones at 9389.48 but that closing level showed a marked improvement on the day’s low point of 9106.54. At the same time, the Nasdaq rose sharply and had gained 3.67% on the day to finish at 1897.70. Hopes that the U.S. stock markets had reached the bottom and would climb steadily were boosted on Friday as both the Dow Jones and the Nasdaq showed further gains. The Dow Jones finished the week on 9504.78, and the Nasdaq closed at 1928.68, although many analysts warn that there may be further falls to come. "The Markets are nervous," said one, "And it will only take a few unfavorable economic reports to send the whole thing crashing again."
Senator Joseph Lieberman has made a radical proposal to boost consumer confidence in line with President Bush’s tax cuts by making an immediate tax refund of $300 to every working American. "Get money into people’s pockets", he said, "It’ll inject new life into this dormant economy. That’s 200 million people, and the odds are that they’re going to spend it."
As California is faced with the likelihood of more blackouts, energy secretary Spencer Abraham has warned that it will take time for new energy sources to be developed. "We're moving as fast as we can and we recognize we have a fairly serious crisis confronting us," he said, "But the fact of the matter is there is not a big generator in the basement of the Department of Energy. I can't just push a switch and send electricity around the country." He added that rolling blackouts were likely throughout the summer. Mr Abraham went on to express his disappointment at the decision by OPEC to reduce oil exports by 1 million barrels a day, but predicted that the price of gasoline would remain steady.
President George Bush has revealed to journalists his ability to laugh at himself. Much needed, some might say, but his comments at a dinner on Saturday went a long way to boost his popularity. "You know," said the President, "That some of my staff are picking up jokes about me lacking intelligence?" and paused for the ripple of cautious laughter. "So now every morning, the first item on my agenda is an ‘intelligence briefing’." He acknowledged his aptitude for making completely unintelligible or inappropriate remarks. "This foot-in-mouth disease rampant in Europe, " he joked, "I’ve got it." He also added that he had plans to clone Dick Cheney in the hope that this would mean he would then be able to do nothing at all himself for the next four years.
25th March 2001