So 2008 is over. And good riddance too. If ever there was a year that deserved to be consigned to flames and forgotten about, this was the year.
No one would have expected a year where company share prices fell by 50%, and in some cases more. True, some old timers compared it to previous downturns but the reality is very few got the timing right, except for some short-sellers.
So what were the worst predictions for 2008. It's hard to go past the one that appeared in BusinessWeek on Christmas Eve. My favorite is Ben Bernanke's forecast back in February: "I expect there will be some failures. … I don't anticipate any serious problems of that sort among the large internationally active banks that make up a very substantial part of our banking system." Or for that matter T Boone Pickens predicting that oil will be up around $150 a barrel by the end of this year. Only $110 off.
Then again, it's worth checking out the worst predictions as compiled by Foreign Policy magazine and republished via Salon via Politico.
My three favorites? Hard to go past Henry Paulson just six weeks ago ("I believe the banking system has been stabilized. No one is asking themselves anymore, is there some major institution that might fail and that we would not be able to do anything about it"), and Jim Cramer responding to a reader's email back in March ("'Peter writes: 'Should I be worried about Bear Stearns in terms of liquidity and get my money out of there?' No! No! No! Bear Stearns is fine! Do not take your money out. … Bear Stearns is not in trouble. I mean, if anything they're more likely to be taken over. Don't move your money from Bear! That's just being silly! Don't be silly!") and Donald Luskin in the Washington Post ("Anyone who says we're in a recession, or heading into one-especially the worst one since the Great Depression-is making up his own private definition of 'recession'.")
Read it and weep.
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