It's that time of year again when foolish people make foolish forecasts which they later regret. My advice to forecasters has always been never to include a date on any prediction and to make multiple predictions as these will marginally increase your chances of getting at least one right.

Rather than looking at 2000 and asking whether Chase Manhattan will take another peek under Merrill's petticoats (who really cares about Chase anyway?), or whether Lehman will succumb to the wiles of a foreign temptress, examine instead two houses which have fallen into the dangerous area of "middle ground'. You don't need to be a first-year graduate trainee to appreciate that middle ground can, without early redirection, turn into a killing field. The two financial titans which, in my opinion at least, have strayed off their chosen path and are currently floundering in the dangerous mire of middle ground, are JP Morgan and the ING group. In the case of ING, I am referring to its banking business rather than its insurance operations which are world class. Take JP Morgan first. The best feature of the bank is its name, after that everything else looks slightly frayed at the edges. The bank retains a customer list to die for and can knock on any central bank door which provides a natural inside track for privatisation or other government mandates. However, the benefits don't seem to come down to the bottom line, with the results that JPM's share price has lagged far behind its main competitors such as Morgan Stanley. A prominent fund manager friend based in Edinburgh commented: "JP Morgan is neither fish nor fowl. It wants to be a rock 'n' roll investment bank like Goldman. But tit is not the best in mergers and acquisitions, it has fallen apart in fixed income and is still a long way behind in equities. Even in syndicated loans it can't hold a candle to Chase or Citigroup and its foreign exchange business, where it was once the best in the world, is no longer so significant since the arrival of the euro.'Harsh words perhaps? Not really. I would also add that JP Morgan has failed to capitalise on the use of its name (synonymous with supremely rich robber barons) to build its asset management group into a financial colossus. Also, its market capitalisation has fallen far behind Citigroup, Morgan Stanley Dean Witter, Credit Suisse (which controls CSFB), Goldman Sachs and Merrill Lynch. It would be unkind to describe JPM as a minnow, but in the modern predatory world it is beginning to look more and more like a tempting morsel. What can be done? Chairman Sandy Warner and his team should take action before they receive an unwelcome knock on the door. The House of Morgan cannot be allowed to drift along aimlessly and Warner should listen more closely to those taunts which say that the bank is a spent force. If he wants to stay independent he could snap up either Schroders or Flemings which both have wonderful asset management businesses as well as equity expertise. If he wants to deliver the knockout blow, strike a deal with HSBC which should salivate at the prospect of bolting on Morgan's investment banking skills to its money-spinning retail customer business. Perhaps Morgan should talk to ING Group, the huge (current market capitalisation ranks around 80th in the world) Dutch bancassurance combine. ING's insurance operations tend to run like a Swiss train but the banking operations seem to be at a crossroads after the offer for Credit Commercial de France which was immediately withdrawn. That particular story may not be over, but in 2000 ING has to make a decisive move in its investment banking division comprising ING Barings, Baring Securities and Furman Selz in New York. This whole operation has to move up a full gear if it is to lose the tag (a legacy from Baring Securities) of being a house which mainly specialises in spivvy emerging markets.The Barings franchise is fortunately still intact and remains an excellent calling card. ING Barings has a no-nonsense chief executive in David Robins who knows what has to be done and has the full support of the main ING board in Amsterdam. When he took over a year ago Robins' first priority was to restore morale which had been decimated by poor senior management appointments. The mood is now far more confident and Robins can concentrate on restoring Baring Brothers to its former place as one of the best UK mergers and acquisitions advisers, consolidating the emerging markets franchise of Baring Securities and building an integrated high-quality debt capital markets operation which can offer serious competition to Dutch arch rival, ABN-Amro. For Robins, these are major challenges and in the key US market he is well aware that Furman Selz is no more than a flea on the back of the Wall Street elephant. Robins needs to both hire and acquire. Fortunately, he is extremely perceptive and is well aware that the clock has started ticking.