Outlook '08 Predictions: NYSE, Dollar, SEC And More


Here they are, my predictions for 2008, as part of our Outlook 08 coverage. And make sure you vote on which ones you think will happen.

1. Huge profits will be made by hedge funds buying up mortgage assets.
--As Chinese and Arab investment in the U.S. reaches a crescendo, sovereign wealth funds will become a political hot potato,; xenophobes will use the political cycle to claim they are vultures profiting from the misery of home owners.
--The Chinese market will begin selling off going into the Beijing Olympics under the long-held belief that massive infrastructure projects will now be slowing down, but will rebound by the end of the year.
--Coal will again come into popularity after electricity shortages in Texas and California. Coal power plants which were cancelled due to global warming concerns will again be back on the drawing boards.
--After an ugly first half, the U.S. stock market will rebound in the second half of the year.

2. Recently appointed CEO of NYSE Euronext , Duncan Niederauer will quickly make his mark on the NYSE during is first full year of leadership. He will buy a U.S. exchange, deepen relationships with exchanges in India, Tokyo and Brazil, and pursue SEC rule changes that will alter the way specialists can trade stocks and help improve profitability.

3. Contrary to all expectations, the NYSE floor will not disappear; new investment from Lehman and one or two other firms that will buy into the renamed specialist business will stabilize the trading floor.

4. A current Dow Industrial component(Dupont, Alcoa, Honeywell perhaps) will be acquired, paving way for Google to become the third NASDAQ-listed Dow 30 member. (It has been nearly 4 years since any Dow component changes.)

5. The hype surrounding the planned Visa IPO will be very intense. It will become one of the biggest U.S. IPOs in history, and could be well over-subscribed. Look for it being one of the big bright spots in 2008, as MasterCard was in 2007.

6. New SEC rule changes will inject life into the specialist system at the NYSE. The long-desired changes will help the long-term viability of the specialist system, and will once again help the specialist companies regain profitability.

7. As a proud owner of a PowerMac G5, a MacBook Pro, several iPods, and an iPhone, if rumors are indeed true that a 3G iPhone is on its way...I'll be first in line to pick one up! But Mr. Jobs...let's up the capacity on the new iPhones too!

8. The dollar will stage a major rally. The Bank of England has just cut rates, the ECB will do so shortly, and by the middle of next year (bulls hope) the U.S. will be nearing the end of our rate cut cycle. Huge profits will be made by hedge funds buying up mortgage assets.

Questions? Comments? tradertalk@cnbc.com