Harold Maass of The Week The Best of Today's Business

NEWS AT A GLANCE

Soaring Asian inflation spreads overseas

Inflation rates are rising in the U.S. and Europe, but nowhere near as fast as in Asia, where countries like India and Vietnam are already grappling with double-digit inflation. But rising prices in Asia are already starting to affect U.S. inflation, as once-cheap imports are becoming more expensive. "The epicenter of the inflationary storm is really in Asia," said Cyd Tuano-Amador at the Philippines Central Bank. (The New York Times) The rising inflation rate could cancel out the average 3.5 percent raise that U.S. workers can expect this year, according to a survey by Watson Wyatt Worldwide Inc. The Labor Department pegged annual U.S. inflation at 5 percent in June. (The Wall Street Journal, paid subscription)

Insurer Tokio Marine buys Philadelphia Consolidated

Tokio Marine Holdings, Japan's largest insurer, agreed to buy property and casualty insurer Philadelphia Consolidated Holdings for $4.7 billion to expand into the U.S. market. The cash deal, the largest U.S. acquisition by a Japanese financial firm, represents a 73 percent premium on Philadelphia Consolidated's closing price yesterday. (Reuters) A declining population and slow economy give Japanese insurers limited prospects in their home market. "It's quite an aggressive move, but it is quite important for a Japanese financial firm to increase its presence in a major insurance market," said Mitsushige Akino at Ichiyoshi Investment Management Co. in Tokyo. (Bloomberg)

WaMu stumbles, but bank sector cushions fall

Washington Mutual reported a record $3.3 billion quarterly loss, much worse than analysts were expecting. The top U.S. thrift increased its loss reserve by $3.74 billion, to $8.46 billion, to cover the declining value of its souring mortgage assets and other credit problems. (AP in Yahoo! Finance) WaMu's shares initially rose in extended trading, but then fell after Moody's said it might downgrade the bank. (CNNMoney.com) In regular trading, Washington Mutual shares and those of four other banks that reported big losses or tanking profits rose despite their dire earnings. "We are resetting expectations for bank profitability," said Christopher Whalen at Institutional Risk Analytics. "We are redefining bad." (The New York Times)

Behind the scenes at the inflation monitor

Federal Reserve economists know quite a bit about what drives inflation figures higher, but they don't know much about how those figures affect the behavior of consumers and businesses. And a lot rides on what consumers do: If they cut expenses to make up for rising food and fuel costs, inflation might not get out of hand; if they decide that higher prices mean they need higher wages, watch out. So a team of six Fed economists is looking for clues about consumer behavior in advertisements, industry surveys, and phone calls to retailers. The timing of a sale on summer dresses, say, can speak volumes. "You use a fair amount of finesse, judgment, anecdotes, and indicators," said economist Michael Feroli, a former Fed forecaster. (Bloomberg)

BEST COLUMNS OF THE DAY

Wind power, or hot air?

"Bob Dylan said it best," says James Tisch in the Houston Chronicle: "The answer is blowin' in the wind." While politicians and environmentalists argue over greenhouse gas reductions, "the precipitous rise in oil and gas prices" has made that debate moot. The free market, combined with "the silent and inexorable march of technology," has provided the answer: wind and solar energy. Wind turbines already provide almost 10 percent of the electrical supply in Texas, and Texas isn't the only state lured by the benefits of cheaper, cleaner wind power. Oil and coal are simply "being priced out of the market," and it didn't require any "draconian regulation," just "a little patience" and some new technology.

Wind power looks good on paper, says Steve Hargreaves in CNNMoney.com, but are the hopes of phasing out oil and coal "realistic or just dreams?" Coal provides half our power, and natural gas 21 percent, while wind and other "traditional renewables" ring in at a paltry 3 percent. To replace all that coal and gas is a tall order, and a costly one. Not only will the government have to subsidize wind turbines and utilities build up infrastructure, but backup generators will need to be maintained because, of course, "the wind doesn't blow all the time." Still, getting wind power up to 25 percent is feasible, with the right laws and incentives, and the benefits make the effort "worth looking into."

GOOD DAY FOR: Slowly plugging in, after utility firm executives said the U.S. power grid can handle a gradual switch to rechargeable hybrid electric cars. Rechargeable cars consume about four times the electricity of plasma TVs, but utilities say their recent ramping up of capacity to accommodate the switch to energy-hogging plasma screens has assured them that a plug-in car changeover is doable, too. (AP in Yahoo! Finance)

BAD DAY FOR: Founding Fathers, as brokerage firm Charles Schwab Corp. is replacing founder Charles Schwab as CEO, promoting president and COO Walter Bettinger II. Schwab, 70, will stay on as chairman. (MarketWatch) Charitable food brand Newman's Own may be facing a similar transition, as founder Paul Newman, 83, is reportedly battling cancer. (Fortune in CNNMoney.com)

NOTED: A federal judge sentenced "Spam King" Robert Soloway to almost four years in prison for sending out more than 90 million unwanted e-mails. Soloway is the second person sentenced under the Can-Spam Act. Soloway told the judge he sent the spam to support his lavish lifestyle; prosecutors had asked for nine years, to send a message that "the financial and societal costs of this crime are immense" and will be punished. (Seattle Post-Intelligencer)

This column was written by Peter Weber and edited by Harold Maass of TheWeekDaily.com.