Here are some of the worst predictions that were made about
2008. Savor them—a crop like this doesn't come along
every year. You wonder why so many have lost their savings?
Keep listening to these people for future predictions and
you will be in the soup lines. Unless you realize what is
actually coming (A DEPRESSION) the sooner you will prepare
for it and SURVIVE!
1. "A very powerful and durable rally is in the works.
But it may need another couple of days to lift off. Hold the
fort and keep the faith!" —Richard Band, editor,
Profitable Investing Letter, Mar. 27, 2008
At the time of the prediction, the Dow Jones industrial average
was at 12,300. By late December it was at 8,500.
2. AIG (AIG) "could have huge gains in the second quarter."
—Bijan Moazami, analyst, Friedman, Billings, Ramsey,
May 9, 2008
AIG wound up losing $5 billion in that quarter and $25 billion
in the next. It was taken over in September by the U.S. government,
which will spend or lend $150 billion to keep it afloat.
3. "I think this is a case where Freddie Mac (FRE) and
Fannie Mae (FNM) are fundamentally sound. They're not in danger
of going under…I think they are in good shape going
forward." —Barney Frank (D-Mass.), House Financial
Services Committee chairman, July 14, 2008
Two months later, the government forced the mortgage giants
into conservatorships and pledged to invest up to $100 billion
in each.
4. "I'm not an economist but I do believe that we're
growing." —President George W. Bush, in a July
15, 2008 press conference
Nope. Gross domestic product shrank at a 0.5% annual rate
in the July-September quarter. On Dec. 1, the National Bureau
of Economic Research declared that a recession had begun in
December 2007.
5. "I think Bob Steel's the one guy I trust to turn
this bank around, which is why I've told you on weakness to
buy Wachovia." —Jim Cramer, CNBC commentator, Mar.
11, 2008
Two weeks later, Wachovia came within hours of failure as
depositors fled. Steel eventually agreed to a takeover by
Wells Fargo. Wachovia shares lost half their value from Sept.
15 to Dec. 29.
6. "Existing-Home Sales to Trend Up in 2008" —Headline
of a National Association of Realtors press release, Dec.
9, 2007
On Dec. 23, 2008, the group said November sales were running
at an annual rate of 4.5 million—down 11% from a year
earlier—in the worst housing slump since the Depression.
7. "I think you'll see [oil prices at] $150 a barrel
by the end of the year" —T. Boone Pickens, June
20, 2008
Oil was then around $135 a barrel. By late December it was
below $40.
8. "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." —Ben Bernanke, Federal
Reserve chairman, Feb. 28, 2008
In September, Washington Mutual became the largest financial
institution in U.S. history to fail. Citigroup (C) needed
an even bigger rescue in November.
9. "In today's regulatory environment, it's virtually
impossible to violate rules." —Bernard Madoff,
money manager, Oct. 20, 2007
About a year later, Madoff—who once headed the Nasdaq
Stock Market—told investigators he had cost his investors
$50 billion in an alleged Ponzi scheme.
10. "There's growing evidence that parts of the debt
markets…are coming back to life." —Peter
Coy and Mara Der Hovanesian, BusinessWeek, Oct. 1, 2007.
