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Up Front


"If you don't know where you are going, you will probably end up somewhere else." -- The Peter Principle, by Laurence Peter and Raymond HullEDITED BY LARRY LIGHTReturn to top


Once more, we venture out onto the limb and offer you our prognostications. They're formulated with equal parts of analysis, gut feel, and prayer.

BILL'S WOES. Assorted scandals will get a lot messier for the President. He'll escape personal Whitewater culpability. But it's even money whether Hillary Clinton will be named an unindicted co-conspirator for not telling the truth about her involvement in land transactions and for the lost-then-found documents. Plus, the Supreme Court will let Paula Jones proceed with her sexual-harassment case, although the President's lawyers will delay a trial date into 1998.

NEWT'S WOES. Much of Clinton's problems will be Newt backlash. Newt Gingrich will win reelection as House Speaker, but he'll have lost so much clout that, later on, he will step down. This all stems from false statements he made to the House Ethics Committee about how a college course he taught was financed. His fate will prompt Republicans to show no mercy to the Clintons.

MOVIES. When will Hollywood moguls learn not to go near the water? Titanic, the big summer flick from Twentieth Century Fox and Paramount, will be the soggiest box-office disaster since Universal's Waterworld. At $125 million and growing, spending on Titanic will be too much for the studio partners to recoup from revenues.

STOCKS. Due to Tickle Me Elmo, there's trouble brewing. The market will slump by midyear before recovering somewhat, to finish slightly below the level it started at in January. Forget earnings forecasts, inflation outlooks, even skirt lengths as telltales. The 1984 market swooned after the Christmas, 1983, craze over the Cabbage Patch Kids. So the Elmo wackiness, a sort of Tulipmania of our time, bodes a reprise.

INTEREST RATES. You want a more conventional analysis? Call this one Tickle Me Alan. Look for the Federal Reserve to hike short-term rates a quarter-point early in '97. That's because the economy will turn in a surprisingly robust performance. Chairman Alan Greenspan has been looking for just such an excuse to cool down the stock market. By fall, though, the economy will be slow enough for a rate cut.

AUTOS. Japanese carmakers will start coming on strong with light trucks--pickups, sport utilities, minivans--an area where they've not been very competitive. Honda's new sport ute, the CRV, and Toyota's new minivan, Sienna, will add impetus to Japan's U.S. market-share gains from cars.

CABLE. Dial M for Merger at the nation's two largest cable operations. Time Warner's cable properties will be spun off to U S West. Tele-Communications Inc. honcho John Malone will chop up his company and sell pieces of it to such buyers as News Corp. and Sumitomo.

CHIPS. AMD's upcoming K6 chip will equal Intel's best in performance--and cost less. While AMD lacks the chipmaking capacity to bump Intel from its No.1 perch, K6's success will bruise Intel's pride.EDITED BY LARRY LIGHTReturn to top


1. Bill Clinton masterfully hewed to a more conservative line to revive his political fortunes and win a second term. By co-opting Republican positions on such issues as welfare reform, he stopped Bob Dole from painting him as a liberal.

2. Boeing's romp, gaining huge jetliner orders and a finalist's berth to build a new fighter plane, came at McDonnell Douglas' expense. So a weakened McDonnell finally assented to merge with Boeing, whose lead in the aerospace world widens.

3. Reversing course, Microsoft went full tilt into the Internet. Now, the software giant, in competition with smaller Netscape, stands a good chance of dominating cyberspace.

4. When the midsummer market dip shook up many big-time investment gurus, Goldman Sachs's Abby Joseph Cohen wisely advised staying in equities. Stocks then took off once again.

5. Louis Gerstner returned IBM to the task of focusing on customer needs. The result is a rebound for Big Blue, once written off as a corporate dinosaur.EDITED BY LARRY LIGHTReturn to top

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