Noted analyst predicts market correction, recession

WESTPORT, Conn. – Byron Wien, the Pequot Capital Management Inc. chief strategist whose New Year’s predictions have been influencing investors for nearly a quarter century, predicts stocks will tumble before rallying in the second half of 2008, according to Bloomberg News.
The Standard & Poor’s 500 Index will fall 10 percent this year, in a classic market “correction,” he writes this year in his 23rd annual list of Top 10 “surprises.” His market forecasts have proven wrong for the past two years, but Wein says his predictions have at least a 50-percent chance of coming true.
Among the other surprises he predicts: Democrat Barack Obama will beat Republican Mitt Romney in a “landslide” to win the presidency. The U.S. unemployment rate will top 5 percent, for the first time since 2005. And the Federal Reserve will cut its benchmark interest rate to less than 3 percent, from the current 4.25 percent.
“In spite of Federal Reserve easing and other policy measures, the United States economy [will suffer] its first recession since 2001 as housing starts stay soft and banks are reluctant to lend,” Wien writes. But this summer, he adds, “market conditions start to improve.”