The Federal Open Market Committee cut short-term interest rates a half-percentage point down to 1.25% today, a move perceived as aggressive. Most economists predicted only a 0.25% cut.

"Greater uncertainty, in part attributable to heightened geo-political risks, is inhibiting spending, production, and employment," the Fed said in a statement. We wonder if this cut will really help the economy, since the 11 that preceded it hardly did the job.

Stocks moved upward on the news, with the Dow closing up 1.08%, the Nasdaq up 1.27%, and the S&P 500 up 0.91%. The FOOL 50 had a mixed reaction to today's verdict because of an admitted crush on Winona Ryder. It was down for a while, but it closed up 0.51%.

In today's Motley Fool Take:

SEC Chairman Pitt Resigns

It seems Harvey Pitt can take a hint. After months of controversy and repeated calls for his ouster, the embattled Securities and Exchange Commission chairman submitted his resignation yesterday.

In his 15 months as the country's chief securities cop, Pitt came to symbolize "politics as usual" (or worse) during one of the most severe crises of confidence in the public markets.

As a private attorney before taking over at the SEC, Pitt represented the major accounting firms (and their lobbying group), Ivan Boesky in the 1980s, and MicroStrategy Inc.(Nasdaq: MSTR) CEO Michael J. Saylor. Should anyone paid millions by various members of Wall Street be expected to regulate it without undue influence? Pitt proved that's too much to ask.

In his first speech as chairman, Pitt made conciliatory comments toward the accounting industry. He said in an interview that he would make the SEC a "kindler, gentler" place. (That's what we need: People like Ken Lay and Bernie Ebbers to be treated more kindly and gently.)

As the Enron and WorldCom scandals unfolded, Pitt didn't react quickly enough. He met privately with the executives of companies being investigated by the SEC. According to The Washington Post, when Congress began drafting legislation that would increase corporate and accountant accountability, Pitt told Republican members that new legislation was not needed.

The coup de disgrace came with the appointment of the head of the new accounting oversight board. Former TIAA-CREF chief John H. Biggs, an outspoken critic of current accounting practices, seemed to be in line for the job. But Pitt -- reportedly bowing to pressure from accounting firms -- instead chose former CIA and FBI director William Webster. The appearance of outside influence and Webster's lack of experience brought enough bad publicity. Then it was revealed that Webster does have some experience -- as a member of the auditing committee for a company under investigation for fraud while the auditing committee allegedly dismissed the outside auditor that raised questions. Pitt knew this but didn't tell the other SEC commissioners, reportedly on the advice of long-time business associate and now chief accountant Robert K. Herdman.

With Pitt gone, what's next? We made a few suggestions to President Bush, and we recommend that you do the same. Webster has said he won't keep the position at the oversight board if the controversy will impede the board's work. And look for other members of Bush's economic team to resign.

As for Pitt's replacement, there's little word from the White House. Whoever gets the job will have to contend with an all-time low SEC public approval rating, according to a poll by RoperASW conducted before Pitt's resignation. Worse still, he or she will face a legion of shady corporate and accounting practices that, despite all the political puffery, are still allowed to undermine the credibility of the public markets.

Quote of Note

"The leader who exercises power with honor will work from the inside out, starting with himself." -- Blaine Lee, organizational behavior expert, The Power Principle

Crackdown on IPOs

The Securities and Exchange Commission is cracking down on spinning and laddering.

No, it isn't railing against exercise classes and home improvements. Spinning and laddering relate to initial public offerings (IPOs).

In IPO-speak, "spinning" is when the investment bank taking a company public gives some of the new shares, which have yet to hit the market, to valuable clients (or perhaps would-be customers) in order to gain more business. These lucky beneficiaries then "flip" the shares, quickly selling when they hit the market and initially spike in price. Former WorldCom CEO Bernard Ebbers engaged in one particularly egregious instance of this and netted some $11 million.

It's funny how so many IPOs experience a big jump in price when they make their public debut, isn't it? Well, we can often thank " laddering" for that. Laddering occurs when the investment bank rewards investors, who signal they plan to buy a lot of shares of an IPO on the open market, with pre-IPO (i.e., flippable) shares. Laddering has been blamed for contributing to the wild run-ups in IPO prices in the late 1990s. Insiders got rich as the prices soared, while many of us got stung as the prices fell.

Spinning, laddering, flipping -- these are all win-win-lose practices. Investment banks get to deliver rising IPO stock prices and lure more business; corporate bigwigs and major investors get shares at, essentially, discount prices; and we, the individual investors, pay higher prices and are excluded from these dealings.

According to The Wall Street Journal (subscription required, free trial available to Fools), investment banks Goldman Sachs(NYSE: GS) and J. P. Morgan Chase(NYSE: JPM) are in the hot seat right now, both under investigation by the SEC for IPO practices involving civil securities fraud and market manipulation. Both companies deny wrongdoing.

The National Association of Securities Dealers has also issued proposals for reforming IPO practices, and New York Attorney General Eliot Spitzer is seeking more reform, as well. So rejoice -- the playing field might even out a bit in the near future.

Learn more in our ABCs of IPOs.

Retirement Fact of the Day

"Almost half of all working Americans (47%) have saved less than $50,000 for retirement, and 15% haven't saved anything." -- The Retirement Confidence Survey

Amgen Pays for Its Delay

What happens when you delay a meeting with analysts by a few months?

Just ask Amgen(Nasdaq: AMGN), whose shares are getting bounced 9% today. Oh, and if that's not enough, the folks over at UBS Warburg downgraded the stock. Perhaps that was slated to happen anyway, but the timing sure looks convenient.

Amgen was supposed to hold its analysts' meeting on Nov. 21. Late yesterday, it announced the meeting will happen Feb. 25, instead.

What's up with this? Should shareholders freak out and sell? Not so fast, Fools.

Amgen says it needs more time to provide accurate and adequate information concerning how a couple of issues will affect its long-term outlook. That's reasonable, given what's been going on with the company lately.

First, the government's Medicare and Medicaid program last week said it will reimburse Amgen for hospital outpatient uses of its anemia drug, Aranesp, at a level much lower than the current level. The new plan will start Jan. 1, 2003, and will affect about 10% of Amgen's sales. The company didn't release exactly how much less it will get for the drug, but it's hoping to convince the government to change the ruling.

Amgen also awaits results from the FDA's inspections (scheduled to take place this month) of its new Enbrel production facilities. Should it get the green light to use them, the undersupply of the rheumatoid arthritis drug that has haunted the company could be alleviated as soon as the first quarter of 2003. That would be excellent news.

Finally, Amgen awaits news about its legal case over patent infringement against Transkaryotic Therapies(Nasdaq: TKTX).

With all this uncertainty, the company simply feels it can't provide accurate enough information this month. It will give 2003 financial guidance in a Dec. 12 conference call, but more detailed info will have to wait until February.

There's no need to punish Amgen for this. We all know that the market hates to be kept waiting, but the company is making the right call, here. Putting out inaccurate scenarios on time is more offensive than making shareholders wait for better information.

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TV's Happy Ending

While there may be truth in advertising, you can't bank on advertising results. With News Corp.(NYSE: NWS) reporting strong fiscal first-quarter results, due to a hearty rebound in ad sales, it's fair to ask whether the advertising market, as a whole, is back, or if this is merely a company-specific fluke.

While summer is usually the resting place for blockbuster movies and TV reruns, News' subsidiary Fox Entertainment(NYSE: FOX) got it backwards. Its summer slate of theatrical releases fizzled after the releases of Minority Report and Star Wars II in the company's fiscal fourth quarter. However, it rocked the ratings world with the surprise summer hit American Idol.

So while the summer ad market is usually yawn fare, Fox grew its audience and ad rates, as the superstar search narrowed. The result: Quarterly profits more than doubled at News, as revenue came in 12% higher at $3.8 billion.

And it's not alone. General Electric's(NYSE: GE) NBC posted a 59% spike in earnings for the same period, while CBS parent Viacom(NYSE: VIA) saw its television division's adjusted operating profit rise by 25%.

While companies were hesitant to open up the ad budget last year, given sluggish consumer spending habits, it appears sponsors are willing to take a more aggressive marketing approach now. That's good news for News -- and everybody else.

Discussion Board of the Day: Reality Television

It's Wednesday. Will you watch The Bachelor or The Amazing Race tonight? Reality television has come a long way. Will the trend continue? Have the networks taken the concepts too far? All this and more -- in the Reality Television discussion board. Only on

Quick Takes

It's a good day for Dole. The candidate, Elizabeth (R-N.C.), won a Senate race. Her husband, Bob (PITCH: Viagra), helped her celebrate. And the banana giant, Dole Food(NYSE: DOL), rose to the occasion with a third-quarter profit of $0.26 a share, turning around a year-ago loss of $1.70 a share. Management celebrated with a tasty fruit cup.

It's more of the same from WorldCom. The bankrupt telecom said it will likely have to restate more earnings, bringing the total amount to over $9 billion. In addition, the leaderless SEC added another fraud charge against the firm.

Polo Ralph Lauren (NYSE: RL) galloped to higher second-quarter earnings. The upscale clothier weaved a profit of $0.52 a share and said same-store sales rose 1.8%.

There's good news today for people who still send letters via snail mail. The U.S. Postal Service found it was overpaying retirement costs, and thus will be able to reduce its deficit by $3 billion. As a result, the price of a stamp should remain at $0.37 until 2006.

In local news, the outcome of the county agent race won't be decided until voters in the 2nd precinct are allowed to cast their ballots. The polling machine, located at the volunteer fire department, was accidentally locked up for most of the day while workers battled a grass blaze on the Kimball property.

And Finally...

Today on Fred Barbash has some strong words for Washington in the wake of Harvey Pitt's resignation.... Bill Mann wonders if a twelfth rate cut will really help the economy.... Whitney Tilson warns against panicking and making a financially painful decision.... Bill Mann explains how one company broke the tyranny of quarterly earnings.... Our Community offers the Top 10 things Republicans should NOT do today.... The Motley Fool Select team sift for diamonds in a rough market.... How to maximize your credit rating, in Fool's School.

Bob Bobala, Robert Brokamp, Tom Jacobs, LouAnn Lofton, Bill Mann, Selena Maranjian, Rex Moore, Rick Munarriz, Matt Richey, Jackie Ross, Reggie Santiago, Dayana Yochim