April 2005 may go down in the separate histories of Internet publishing and of the printing industry as a major turning point for each medium. This month, the Wall Street Journal’s Web site produced more profits than its print edition, and Google’s advertising revenues exceeded those of some major publishing operations. More about that later, in what some might call my urgent call to action.

Worries about inflation kept coming up in news stories these past two week, as conflicting data showing increased pricing pressures made “the experts” wonder if the Fed was too lax in its rate policy. Decreasing commodity prices made them wonder if the Fed was too aggressive in its rate policy, and should start loosening credit. Gosh, it seems the Fed can’t please anyone. Despite all of the actions taken by the Fed, long-term bond rates have changed little. Yes, the economy seems to be slowing, but it’s still growing. The Fed’s Beige Book seemed to present conflicting information, the consumer price index seemed intent on rising, and the leading indicators just seem to prefer to move sideways. It all means a growing economy, but growth at a slower rate.

The stock market suffered from profit taking, but the decline is an indicator of sagging profit expectations, though the pullback was relatively minor. The concern I expressed in our most recent webinar that corporate cash flow had declined seems to be playing out. Accelerated depreciation schemes from two years ago are now paying back as expected: decreased cash flow. After all, you can’t depreciate something for more than it’s worth, and all accelerated depreciation does is change the years in which the depreciation expenses occur. Depreciation schemes that increase cash flow in some years end up decreasing them in others. No one should be surprised. I assume the champions of the accelerated depreciation scheme originally hoped that by this time non-U.S., non-China economies would be picking up the slack, but they’re not. Big company CEOs will stay skittish and tight with their bucks, and there’s no reason to expect anything else.