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Read the Fine Print on Cisco and the Fed

Attention to detail will reward investors who review the performance of these distinct entities.

The Business Press Maven's head feels like it was jolted by a giant fork of lightning. Turns out, it's only the effect of reading so much recent Fed coverage.

But before I talk about the Fed and particularly, Jim Cramer's high-profile call for a rate cut right now, perhaps biting the hand that helps feed me -- which always gets Mrs. Maven real nervous -- a quick word about coverage of

Cisco's

(CSCO) - Get Cisco Systems, Inc. Report

earnings, which came out after the bell Tuesday.

The Business Press Maven deals a lot with stories from the business media that are off by half, really bad efforts. But when a company like Cisco reports news as good as it did yesterday, surpassing expectations for the quarter and ratcheting up future numbers -- well, it's almost metaphysically impossible to see a headline or two that says: "Cisco Disappoints."

But for your edification, take a quick look today at these two articles. Both are accurate in terms of numbers and overall tone. But

The Financial Times

gives you a much better job of taking a step back and letting you know where Cisco may stand in the grand scheme of things. This kind of work does you, the savvy investor, much more good, than the sort of work (hello

Investor's Business Daily

) that is done with blinders on. Look for it.

Notice how

Investor's Business Daily

-- no wire service -- leads by telling you that Cisco beat earnings estimates and boosted its long-term outlook. Fair enough. We then hear about how the chief financial officer is being replaced, before they dutifully parse out the good news. This rose, that rose -- the stock rose, we are told several times.

Only toward the end are we routed (sorry) toward the source of the strength, and then it's in the same small-ball manner. U.S. sales were solid, sales from emerging markets could rise. The router business was bumpin', as they say, with

Juniper

(JNPR) - Get Juniper Networks, Inc. (JNPR) Report

doing real well, too.

And Cisco's most recent good news comes after a string of quarters of the same. Sounds like something bigger just might be going on, huh?

That's what

The Financial Times

captures in its larger look story on those same numbers. Its headline: "Cisco lifts goals on internet optimism." Its lead:

Cisco Systems on Tuesday raised its long-term growth targets, reflecting continuing optimism around a new generation of collaborative technologies, such as high-end teleconferencing, that Cisco says are poised to usher in a "second phase of the Internet."

The Wall Street Journal

, similarly, centers its story not around the narrow numbers but the larger trends that the numbers might represent. Could they be wrong? Well, sure, though in this case I don't think so. But by not even bringing up the serial nature of the good performance or the possibility that broader, positive forces are behind the news, Investor's Business Daily fails you here, even though they, technically, got nothing wrong.

TheStreet Recommends

Now for the Fed and Mr. Cramer. Mrs. Maven, avert your eyes.

The lead up to the Federal Open Market Committee was dominated in the public square by

TheStreet.com's

co-founder Jim Cramer, who had a well-documented conniption on

CNBC

earlier this week, calling for the Fed to lower rates

now

, in large part to save the financial stocks from themselves.

In other words, as I see it -- financials got themselves into a mess with subprime loans and now the Fed has to act like Alan Greenspan is still in charge and rise to the immediate rescue -- even at the risk of inflation. In other words: even at the risk of making a bad economic situation worse.

The cut didn't come and the market reacted poorly initially, in part because of how these high expectations were set.

However, with some distance from the initially dire reports about the Fed's non-move that resulted, the market did all right, even recognizing a quiet, subtle new shading in what the Fed said, which is just what should have happened.

The stock market still has an addictive quality to these rate cuts, the sense that for every toe stub, there must be surgery. We've had a few volatile weeks after years of bliss! Save us!

Cramer went on to explain his desperate call for a rate cut by drawing a parallel between the current environment for financial companies and those in both the early 1990s and the late 1920s.

The Business Press Maven remembers the early 1990s. When he would try to get someone to buy a certain stock and they would say they were going to keep their money where it was safe, in CDs, I would always reply:

"Just one quick question. What's your favorite failed bank?"

Banks were failing then -- specifically, savings and loans, but that was because of a structural flaw in the rules. The federal government essentially allowed S&Ls to go invest their assets in whatever they wanted, while guaranteeing their investments. That's a recipe for widespread, protracted disaster, unlike the sloppy top of the housing market loan practices we saw that will be a real downer for a while, but can work their way through the system naturally here.

Anyhow, the Fed's Open Market Committee issued its economic assessment and, insular as always and revved up in large part by Cramer, we quickly saw headlines like this one from

The New York Times

: "Fed Leaves Rate Steady; No Sign of Future Cut"

We were told of how the Fed "sidestepped" anxiety and did not "significantly" adjust its language. Actually, the Fed gave an important nod to credit problems. That was key. They were just more concerned (for the time being and rightly) with the prospects of inflation. The inference was that if inflation continues to hold, a down-the-road rate cut is not out of the picture.

This is the first time I've gotten this vibe in a couple of years. Sure enough, once the entitlement and unhelpful expectations worked their way out of the system, we got headlines later in the afternoon like these from CNN/Money.com: "Wall Street smiles about the Fed: Stocks find some bounce after central bank holds interest rates steady at 5.25 percent, acknowledges credit problems."

It was a whisper from the Fed -- no banging pots -- but if you leaned in a bit close, it held an important and positive hint for the future.

At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.

A journalist with a background on Wall Street, Marek Fuchs has written the County Lines column for The New York Times for the past five years. He also contributes regular breaking news and feature stories to many of the paper's other sections, including Metro, National and Sports. Fuchs was the editor-in-chief of Fertilemind.net, a financial Web site twice named "Best of the Web" by Forbes Magazine. He was also a stockbroker with Shearson Lehman Brothers in Manhattan and a money manager. He is currently writing a chapter for a book coming out in early 2007 on a really embarrassing subject. He lives in a loud house with three children. Fuchs appreciates your feedback;

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to send him an email.