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Up Front


"The world is full of people whose notion of a satisfactory future is, in fact, a return to an idealized past."

-- Robertson Davies, the Canadian author of The Cunning Man, who died at 82 on Dec. 2EDITED BY LARRY LIGHT, WITH PAUL ENGReturn to top


Once again, Up Front bravely predicts the future. We undertake this foolhardy venture on the basis of what we know about the past. That often can lead one astray, but it's the best we've got.

THE '96 ELECTION. It's Bill Clinton, the Comeback Kid, for four more years. Vilified for much of his first term, he still will outshine his dour GOP challenger, Bob Dole. Right-wing Republicans, uneasy about deal-cutter Dole, will stay home. Ross Perot will mount a third-party foray and skim off more GOP voters. Public dismay over Gingrichian harshness will give the Dems back the House but not the Senate.

STOCK MARKET. Funny thing how the economy and the market usually go up in an election year. Aided by lowering interest rates and ebbing inflation, the Dow should rise moderately, to 5600, by Election Day. Nothing like 1995's performance, however, since that's hard to top.

INTEREST RATES. An eventual federal budget accord--neither party wants to be accused of gridlock--should give the Federal Reserve all the ammo it needs to lower rates some more. Look for the Fed, satisfied that inflation is under control, to reduce the federal-funds rate by a half-point, to 5%, by spring. Then it will lay off, so as not to get tangled up in electoral politics.

MONETARY UNION. The much heralded European Monetary Union will be shelved during a summit this summer. Other than Germany, no European country is close to hitting fiscal targets set up by the Maastricht Treaty for a single currency. These require cutting budget deficits and debt by 1997. As the strikes in France show, the necessary austerity is not popular. Plus, Europe's economies are weakening, which will make achieving the treaty's goals even harder.

APPLE. Woebegone Apple Computer will sell off chunks of its business, since no buyer wants the whole thing. Look for Oracle's Larry Ellison, Sun Microsystems, or IBM to acquire software. Japan's Canon could be a buyer for the hardware.

DISNEY. Mickey's run of smash animated films will end with this summer's release of The Hunchback of Notre Dame. While not a bust, this flick will do nowhere near the box office of The Lion King blockbuster or even the moderate hit Pocahontas. In a bid to lure boys and teens, Disney chose Quasimodo's unlovely tale. This downbeat story, though, will turn off traditional Disney fans. Plus, the movie has few of the soaring musical numbers that punctuated earlier efforts.

CHRYSLER. A nasty proxy fight erupts as Kirk Kerkorian challenges Chrysler. His goal is to name his lieutenant Jerome York to the board, launch a huge stock buyback, and double the dividend. Result: CEO Robert Eaton fends off the billionaire. Eaton shunts some of the company's $6.4 billion in spare cash--which Kerkorian wanted to use for dividends and buybacks--into the more productive pursuit of a joint venture with a foreign auto maker.

THE INTERNET. Net fever will cool off a notch or two. With scads of companies already on the Net but profits scarce, new offerings will taper off. Look for consolidation among the companies providing Net services. Most likely winners: America Online, Netscape, Microsoft.EDITED BY LARRY LIGHT, WITH PAUL ENGReturn to top


1. AT&T focused its energies on the booming telecom market by forging plans to spin off its manufacturing arm and its problem-plagued computer unit (the former NCR). The stock has soared since, wiping out all the NCR losses.

2. Early investors in the Netscape public offering profited outrageously. Since going public at 28 last summer, it topped 150 by early December.

3. Colin Powell adroitly managed his public persona with his book tour. By then ruling out a Presidential bid, he avoids the mud of the 1996 primaries. So he's free to be crowned the GOP Vice-Presidential nominee.

4. Kirk Kerkorian advanced his battle to win more influence at Chrysler by hiring its former CFO, Jerome York. York's baleful analyses of the carmaker's finances grabbed investor attention.

5. Caterpillar hung tough and got the United Auto Workers to come back from their 18-month strike, accepting terms they rejected at the outset.EDITED BY LARRY LIGHT, WITH PAUL ENGReturn to top

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