Whitney is über-bearish as shares rise around the world

Not so, warns one of Wall Street's most-respected analysts who predicts that the US economy will experience a "double dip" recession and that the big banks will eventually have to turn to shareholders to raise more cash.

In an interview with the business channel CNBC, Meredith Whitney confessed "I have not been this bearish in a year". She went on to repeat that the banks will be forced to raise capital again and criticised Federal Reserve chairman Ben Bernanke for not being open enough about the US economy in a rare address he gave to the Economic Club of New York.

The independent banking analyst said Bernanke should have given more detail on how he plans to exit programs, even though they are almost finished. She still does not feel that the big banks are well capitalized and claims there is another leg to go in the commercial property slump.

Whitney also mocked most banks for assuming that house prices will not fall further and for their forecasts that unemployment would not reach 10% of the workforce until next year, when it had already done so.

Everything points to the fact that the "US will experience a double-dip recession".

Her remarks may have spooked some City investors, but today's fall in share prices could have been more accurately attributed to profit-taking after four consecutive days of gains. The FTSE 100 index, which yesterday burst back through the 5300 level, was left nursing a modest fall of 30.12 at 5352.55.

The banks traded mixed. Barclays retreated 1½p to 322½p despite the Japanese broker Nomura raising its rating on the shares to buy and its target to 420p. It says the bank will continue to manage its capital base and does not expect it to turn to shareholders for further cash calls. Lloyds Banking Group shaded 0.4p to 90p, while the other state-owned bank Royal Bank of Scotland was 0.2p easier at 37.6p after ING cut its target from 46p to 40p.

Supermarket chain Wm Morrison advanced 2p to 293¾p with Société Générale repeating its buy rating and jacking-up its price target from 311p to 338p ahead of results on Thursday.

Mining shares came under the hammer as the profit takers moved in after yesterday's gains. Platinum producer Lonmin fell 41p to 1699p on further reflection of yesterday's results. There were also losses for Xstrata, down 17p at 1076p, Kazakhmys 20p at 1279¾p, and Rio Tinto 36½p at 3268½p.

Enterprise Inns fell 4¼p to 129¼p despite announcing that the number of its pub tenants now receiving assistance had dropped from 800 to 600. The group also said it was confident of refinancing its £1 billion debt facility with the banks.

In New York, Wall Street shares surged to their highest in more than a year, buoyed by US retail sales numbers that gave hope the long-awaited recovery is finally under way. The weaker dollar boosted metals and crude, lifting miners and oil producers. The Dow closed 136.49 higher at 10,406.49.

Peabody Energy was up 5.5% at $45.94, and aluminium producer Alcoa gained 3% to $13.58. Devon Energy, was almost 6% higher at $71.70 on plans to sell its Gulf of Mexico and international assets for $7.5 billion (£4.5 billion) to focus on its fields in Canada and the US.

In Tokyo shares edged lower with exporters such as Sony weighed down by a strong yen and investors moving to lock in profits in the face of long-term uncertainty about the economy. The Nikkei 225 Average ended down 61.25 points lower at 9729.93, its lowest close for almost two weeks.

United Arrows rose 5.3% to 854 yen after Nomura upped its rating on the seller of casual wear from neutral to buy and its target price from 630 yen to 1000 yen, attributing the move expectations of full-fledged earnings recovery in the next financial year.

In Hong Kong, the Hang Seng index breached 23,000 for the first time in more than a year, but was lower later on worries the market's rally would not be sustained. The index was 101.15 points at 22,842.83. "The market seems to be directionless because most investors feel that 23,000 is the psychologically resistant level," said Castor Pang at Cinda International. "At this moment, investors are unwilling to buy."