Friday, June 09, 2006

The Wall Street Journal is an Ass

The Wall Street Journal had a brief article on the trade deficit numbers published today (6/9/06).I know it's the WSJ and all, but are these guys just saying stuff that makes no sense?
"The U.S. trade deficit widened 2.5% to $63.4 billion, pushed up by the high cost of imported oil, the Commerce Department said. The consensus forecast of Wall Street economists had been for the deficit to widen to $64.8 billion.
Separately, prices of goods imported into the U.S. rose 1.6%"

What do they mean "separately?" The prices rose, and the the trade deficit (measured in dollars) rose too. So of course, some of that trade deficit widening was due to the higher prices! What the heck to they mean by "separately?"
"Hawkish comments from a number of Federal Reserve officials in the past week have indicated the Fed's heightened sense of vigilance toward inflation, fueling hopes the U.S. central bank will continue lifting interest rates. Higher rates tend to boost demand for dollar-denominated investments."
I'm sorry. But this seems just as knee-jerk and dumb. YES. All things being equal, higher interest rates attract more investment. But you know what? Inflation discourages investment. So, if the Fed is worried about inflation, that ought to discourage investment. Unless the investors think they know better or are stuck with dollars for some reason (I mean, domestic savings will increase). I wouldn't think it was so dumb except it's all in one little paragraph with no apparent sense of irony (irony? WSJ? OK. Too much to ask.)
My head hurts.

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