Thursday, June 02, 2005

this week in the news

If the market duplicates the experience during the Great Depression, the worst 10-year experience so far with a record average annual loss of 0.89 percent, the S&P 500 would have to rise for the balance of the decade by 3.2 percent a year. In only nine of the last 70 10-year rolling time periods has the market returned less than a five percent average annual return. If the market were to duplicate its worst performance since 1970, a gain of 5.86 percent a year between 1970 and 1979, the market index would have to move up from here at a 14 percent annual rate for the rest of the decade. (Milton Ezrati, Senior Economic Strategist for Lord, Abbett & Co. LLC)

Core inflation is still tame, rising at 1.6 percent over the past year, about the same as the second half of last year and actually slower than in 2002. The gold price, at $418, is consistent with less-than 2 percent underlying inflation. So is the 10-year Treasury yield of 4.09 percent and a yield curve that has flattened to just over 100 basis points. (Larry Kudlow)

LONDON (AP) - A cell-phone ring tone appeared set to top the British singles chart Sunday, outselling the new single by the band Coldplay by nearly four to one, a music retailer said.
Coming only three days after French voters rejected the constitution, the Dutch "no" vote was so decisive that the treaty seems to have no future in its current form. (NY SUN)

European Union is poised to shelve its proposed constitution for several years after French voters rejected the treaty in a referendum on Sunday.(Yahoo News)

The chaos in Brussels caused by France’s unexpectedly emphatic rejection of the European constitution has put Mr Blair, who takes up the EU presidency in July, in a powerful position to impose his vision of the future shape of the Union. (TIMES ON LINE)

The under-fire euro fell further on Wednesday, slumping to an eight-month low against the US dollar amid rumblings over the long-term future of the eurozone. The fresh selling was prompted by a report claiming that Hans Eichel, the German finance minister, and Axel Weber, the president of the Bundesbank, were present at a meeting at which the possible break-up of European Monetary Union was discussed. The German Bundestag is also said to have commissioned a report on the legal repercussions of a country wishing to leave the EMU. (FT)

Underneath all this there is a more profound question, which is about the future of Europe and, in particular, the future of the European economy and how we deal with the modern questions of globalization and technological change," Mr. Blair told journalists during a vacation in Italy. Nine European Union members ratified the constitution before the French referendum. But France's no vote is likely to kill the constitution - at least in its current form - because it requires approval by all of the union's member countries. (NYTIMES)

British Laborite and progressive George Galloway calls for a formal uniting of the left in the West with the Islamic jihadists in the war on terror. (By David Horowitz)

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