Charles H. Blood, Jr., Managing Director, Brown Brothers Harriman

Charles H. Blood, Jr. was surprised by certain events this year – but has taken it in stride. A managing director at Brown Brothers Harriman, Blood told CNBC’s Tyler Mathisen that his firm was “looking for a moderate bear market in equities” in 2006, based on assumptions including more rate increases by the Fed. But then housing dropped “a lot more than we expected,” he muses, and oil prices eased – adding to a basket of stimuli that reduced nominal – not real – economic activity. No surprise then that Blood “recently” upped his allocation for equities.

The Fed itself, Blood believes, is smoothly melding the Alan Greenspan era into the current one of Chairman Ben Bernanke – with one difference. “Bernanke is continuing with the transparency process,” he notes, but “Greenspan did the easy work.” He explains that Bernanke faces a tougher task than his predecessor, admitting to uncertainty and making it clear “what he doesn’t know.”

Will there be a correction in 2007? Blood is “obligated” to answer yes. He declares that the past summer was not the start of a new bull market, but merely the continuation – the “fourth or fifth year” -- of the “old” one.