Appalachia-whose upstream assets are particularly coveted by E&P master limited partnerships-is home to the beginning of the U.S. oil and gas industry. Here, a replica of an old, metal drilling derrick in Oil City, Pennsylvania, notes the industry's early days. For a report on the MLP model, see this month's cover story, "E&P MLP Mania." Capital markets don't lie. Oh, the stories they will tell in the coming months. At press time, the Federal Open Market Committee announced a new federal-funds target rate of 4.75%, a full 50 basis points lower than the rate the FOMC had held for more than a year-staggeringly, and impossibly, since June 2006. Key here is that 4.75 is the "target" rate. To achieve it, billions of dollars will be thrown at capital markets to make lower-risk cash cheaper (and try to keep variable-interest-rate mortgages afloat), keeping money circulating in the economy. The Fed had trouble in mid-August at holding its 5.25 target. How many billions will it take to hit 4.75? Is the Fed hurdle over-lofty? With all the triple-A credit of U.S. Treasuries behind it, it will achieve 4.75, but at what price? For more on this, see the October issue of Oil and Gas Investor. For a subscription, call 713-260-6441.

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