The Michigan Daily - Monday, January 8, 2001-- 7A
-Asia welcomes U.S. rate cut;
unsure about lasting impact
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0 Fed's surprise cut brings
promising ripple effects to
suffering Asian economies
TOKYO (AP) - The interest rate cut in the
United States is proving a pleasant New Year's
surprise for Asia, raising hopes the region can
keep a shaky recovery going by boosting
exports to a less frugal America.
But while stock markets here surged on the
heels of the Federal Reserve's rate reduction
,Wednesday, experts expressed caution.
Further cuts are needed for potential lasting
benefits to the region, a huge exporter of cars
and electronics that's still smarting from a
1998 financial crisis. Layoffs are rampant in
South Korea. Japan faces a multitrillion-dollar
"No one has money in Japan - the nation,
the banks, the companies. The only hope for
us is for Americans to make money and
- spend," said Shigeyuki Murata, a 45-year-old
book translator. He was checking his invest-
ments by gazing at a brokerage firm's elec-
tronie display - parading Tokyo share prices
on a rare upswing Friday.
Similar sentiments were echoed elsewhere
"If the U.S. economy booms, it will help
our economy and our construction industry,"
said Kim Jung-il, a 39-year-old building con-
tractor in South Korea. "We want a good U.S.
economy as much as Americans do."
The U.S. Federal Reserve slashed its bench-
mark interest rate by half a percentage point
between its regular meetings - a surprise that
sent a global signal the Fed wants to revive the
sagging U.S. economy.
Reflecting a trend across the region, the
benchmark Nikkei stock index in Tokyo rose
1.2 percent Friday following a powerful rally
on Wall Street. It had slipped the day before,
as investors initially expressed caution toward
the rate cut.
The benchmark index in Hong Kong rose 4
percent Thursday and 1 percent more Friday,
while Taiwan's main index surged 3 percent
Friday. The South Korea index rose 4 percent
to its highest close in nearly three months.
Whether the rallies last is debatable, but
previous Asian market surges following
dramatic Fed moves provide some guid-
The Nikkei in Tokyo pushed up about 25
percent in each of the 12 months after the
Fed's half-point reduction in July 1992 and
after the Fed last changed rates between meet-
ings in October 1998.
In South Korea, the main stock index rose
43 percent in the year after July 1992 and 106
percent after October 1998, as the nation
rebounded from the region's financial crisis.
Asia is still smarting from that recession,
which pushed hundreds of companies into
bankruptcy and sent investors fleeing.
"The rate cut is going to be a psychological
plus for American consumers," said Testuo
Kitagawa, spokesman for Toyota Motor Corp.,
Japan's largest car maker.
Toyota, which has posted strong sales
despite a slowdown among rival automakers,
had hoped for slightly higher sales this year.
With the Fed's rate cut, expectations are
Asia's economic health hinges so much on
the American economy that a "soft-landing"
is crucial in any U.S. slowdown, analysts say.
Shinichi Ichikawa, strategist with Credit
Suisse First Boston Securities in Tokyo,
expects the Tokyo stock market to recover fur-
ther in the next couple of months.
Frank Jeng, marketing manager of Via
Technologies, Taiwan's largest chip-design-
er, was less sanguine, noting the Taipei mar-
ket was merely recovering earlier losses.
"It's positive news, but we cannot count on
the rate cut to drive up demand for comput-
ers" in the United States, he said. PC sales in
the U.S. leveled'off last year amid a general
consumer spending slowdown.
One advantage for Asia is that the rate cut
has not yet pushed the dollar down; lower
interest rates tend to decrease the value of that
But the dollar could weaken in coming
months if the Fed cuts rates further, as many
economists expect. That could hurt Asian
exporters by dampening overseas profits and
Japanese businessmen read stock prices in front of a brokerage house on Friday. The powerful
interest rate cut in the United States in providing a pleasant New Year's surprise for Asia.
making their products more expensive across
Lower U.S. interest rates are sure to be
good news for Hong Kong, which pegs its
dollar to the U.S. dollar and centers around
two big industries highly sensitive to rates
banking and property.
Hong Kong commercial banks cut interest
rates by a half-point Friday, following the
Fed's move. That should help people pay
mortgages, businesses borrow money and
Wong Kwong-fei, for one, was hoping to get
a break on the Sl,667 mortgage he pays every
month for his 600-square-foot apartment.
"It will help relieve the pressure on the
mortgage I'm paying," said the 38-year-old
But Lee Keun-mo, chief analyst at Good
Morning Securities in Seoul, foresees only.-
short-term lift to stock markets.
We must remember that the Fed rate cat
was designed to slow the pace of the econonD-
ic slowdown in the United States,' Lee said.
Continued from Page IA
Amphitheater, will focus on how
the press has affected coverage of
race and public policy.
"in the 60s the newsrooms were
almiost entirely white. They had no
experience covering the civil rights
movement. This is quite different
m today," Eisendrath said.
E isendrath said the event will
adIdress the issue of how the media's
coverage of race has changed.
"People will see some of the best
journalists in the country who have
covered the topic of race," Eisendrath
:People will come away with the
idea of how a big problem like race
has changed," he added.
LK Day Symposium
Events for this week include:
Ilednesday -8 p.m.
Screening of "Do The Right Thing"
Michigan League Underground
* Thursday - 3:30 p.m.
MLK Opening Lecture
Reception for Dr. Manning Marable
West Hall CAAS Library
A Riday - 4:00 pm.
"The Problem of Race in the Twenty-
First Century" featuring Thomas C.
W ackham Building Assembly Hall
- Friday - 7:30 pm.
Hip-Hop Explosion: The Fantastic
,Voyage Featuring Slum Village
Michigan League Ballroom
For a complete listing of symposium
-Vents visit http://www.miksympoU
Fox defends new
PASADENA, Calif. (AP) - Fox television
says its racy new reality series, "Temptation
Island," is not about sex - but the show's partici-
pants were tested for sexually transmitted dis-
Conservative and religious groups are up in
arms after only seeing promos for the series,
which debuts Wednesday. It depicts four couples
brought to a steamy island overrun with scantily-
clad singles, urged to test the boundaries of their
Fox executives defended "Temptation Island"
yesterday, while at the same time stepping back
from last year's promise to stay away from risque
"This is not a show, as you will see, that is
about sex," said Sandy Grushow, chairman of the
Fox Television Entertainment Group. "This is a
show that is exploring the dynamics of serious
Still, Fox tested participants for sexually trans-
mitted diseases, part of an effort by TV networks
to be extra careful about the background of reality
show participants. Fox was burned last spring
when it came out that its "Who Wants to Marry a
Multimillionaire" groom, Rick Rockwell, had a
restraining order issued against him by an ex-
Fox refused to say whether any of its "Tempta-
tion Island" participants succumbed to tempta-
The American Family Association, a conserva-
tive watchdog group, has urged its followers to
protest the show and a Dallas rabbi asked his local
station not to air it.
"The producers of Temptation Island' should
be ashamed of themselves for trying to force the
destruction of four relationships for the entertain-
ment purposes of those low-lifes who consent to
watch this trash," said Brent Bozell, founder of
the Parents Television Council.
It's a long way, Bozell said, from "The Dating
Game," which celebrated the creation of new rela-
"I don't think this is a show that endeavors to
pry apart couples," Grushow said, urging people
not to pre-judge it.
"I don 't think this is a
show that endeavors to
pry apart couples."
- Sandy Gru'show
Fox Television Entertainment
He claimed the show is less provocative than
the commercials hawking it. After having seen
two episodes, he said it falls "within the bound-
aries of appropriateness."
When the quickie marriage of Rockwelland
Darva Conger blew up in Fox's face last spring,
Grushow publicly said the network was getting
out of the sleazy reality show business it pio-
"They're gone," he said then. "They're over."
Any subsequent non-fiction programming had to
meet tougher taste tests, he promised.
Since then, the success of "Survivor" on. CBS
proved the public has an appetite for the genre,
Grushow said yesterday. He'd be negligent !s a
businessman not to allow his programming peo-
ple to pursue it, he said.
"I don't think it's about distancing myself from
anything," he said. "We work in a dynamic busi-
ness and things change."
None of Fox's affiliates have said they won't air
"Temptation Island" after having seen a rough
draft, he said
Fox has another series in the works called
"Love Cruise." This one puts a group o sin-
gles together on a boat and pairs them off in
games and activities designed to find a mate.
Like "Survivor," participants are gradually
There are no apparent winners or losers on
Grushow, in a meeting with TV critics yester-
day was asked whether Fox provided condoms to
Luke McCarty hoists a small boulder of snow over the head of his unsuspecting brother Joseph
during a friendly snow fight at Matter Park in Marion yesterday.
Dems brace for redistricting in Mich.
WASHINGTON (AP) - It will be several months
until the state Legislature carves Michigan into 15
congressional districts rather than the 16 it has now,
but speculation already has started over who is at
risk of being squeezed out.
Democratic lawmakers including U.S. Reps.
Sander Levin of Royal Oak, Lynn Rivers of Ann
Arbor and Dale Kildee of Flint say it's too early to
speculate on who will be forced out because of a
new census count.
Rep. David Bonior of Mount Clemens is examin-
ing a run for governor, although he says it's not
because of the threat he might lose his seat to redis-
Despite the lack of obvious concern, the fact
remains that at least one member of the state's dele-
gation will not be re-elected. Some members face lit-
tle risk because laws governing redistricting will
leave their districts relatively untouched.
Democrats are not expected to have much influ-
ence over the decision since the Republican majority
in the state House and Senate will draw the state's
political lines, GOP Gov. John Engler will sign the
a state Supreme Court with a 5-2 Republican majori-
"We are worried about all of the Democratic mem-
bers of Congress," said Michigan Democratic Party
spokesman Dennis Denno. "Michigan has a very pow-
erful and influential and popular Democratic congres-
sional delegation, and I think to lose any of them
would be a huge loss to the people of Michigan."
Republicans will look to protect their strongholds,
including seats held by Reps. Fred Upton of St.
Joseph, Vern Ehlers of Grand Rapids and Pete Hoek-
stra of Holland in conservative western Michigan;
the seat held by Joe Knollenberg of Bloomfield
Township inthe most affluent part of Oakland Coun-
ty; and the seats of Dave Camp of Midland and Nick
Smith of Addison, who represent largely rural dis-
tricts in the Lower Peninsula.
They are expected to give newly elected Rep.
Mike Rogers of Brighton a stronger footing in the
8th District that covers all of Ingham and Livingston
Counties and parts of Washtenaw, Genesee Shi-
awassee and Oakland Counties.
three of the last four elections, including this year
when Rogers won the closest U.S. House race in the
country by I 1I votes.
Some Democrats are not considered to be at risk,
Rep. Bart Stupak's district covers the Upper
Peninsula and northern Lower Peninsula, and
although it will grow like all the other districts to
take in more residents, it cannot be easily divided to
split up his base.
The seats of Detroit Reps. John Conyers and'rCar-
olyn Cheeks Kilpatrick are considered safe because
under the federal Voting Rights Act, political lines
cannot be drawn to split a minority voting block
within a political area such as a city.
That leaves six Democratic seats where Republi-
cans have more room to make changes.
Rep. Jim Barcia of Bay City, the most moderate
Democrat in the delegation, could be a target
because much of the 5th District outside urban Bay
City and Saginaw has a conservative voting record
that Republicans would like to harness for one of
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