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As the Dow resumes its upward march this morning, investment strategist Byron Wien at

Morgan Stanley

has offered investors his two-cents worth for the New Year.

Never afraid to make a splash, Wien headlines his predictions: "The Surprises of 1997."

Of course, the big Surprise of 1996 was Wien's turnaround on his own splashy prediction of a 1000-point Dow drop. In October he reneged, saying he was looking for a 10% rise.

But if you're still listening, Wien's still talking. Here's some bits of his 14-point laundry list:

Wien expresses cautious optimism for the domestic economy and even small caps, which have yet to break loose from the doldrums of adolescence.

His crystal ball portends mayhem in foreign countries.

On Europe: It's drowsy economies raise social and political tension, and eventually the EMU clatters to the ground.

On Japan: The Nikkei sags and unemployment worries shake lawmakers at the

Diet

. King Fahd dies, leaving an empty saddle in Saudi Arabia. Fundamentalists rattle their sabres throughout the Middle East, stanching the oil flow and driving the price of crude to $40.

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Back in the good ol' U. S., our economy ripens to a real growth rate over 3% without the sting of inflation at first. The Dow breaks 7500, Wien proposes, but then the Fed ratchets short-term and long-term interest rates a little higher. The Dow subsequently crashes 1000 points, finishing 1997 a touch below where it started.

Bill Gates of

Microsoft

launches a massive effort to kill the Year 2000 plague and put the hammerlock on another software sector.

And finally, some old big-caps such as

AT&T

(T:NYSE),

Motorola

(MOT:NYSE),

Xerox

(XRX:NYSE) regain the attention of investors with the power of their franchising positions. They lead the market.

The Dow making a round-trip ride of 1000 this year? As the markets rise this morning, that's something to think about.

By Kevin Petrie

kpetrie@thestreet.com