Special Schadenfreude edition: In case you missed it, here is our updated collections of the worst predictions for how 2008 would turn out:

The 10 Worst Predictions for 2008 (Foreign Policy)

The Worst Predictions About 2008 (Businessweek)

2008 Investment Guides Are HILARIOUS (New York Magazine)

Famous Last Words (CNBC)

The worst media calls of 2008 (Kiplingers)

Dropping the (crystal) ball: This crisis duped executives and regulators (LA Times)

10 Predictions’ for 2008: BlackRock’s Bob Doll  (Reuters)

Jim Cramer’s Predictions for 2008 (Covel)

Those two above have been cited all over the web. Here are a few others worth mentioning (did I miss any?)

How wrong they were (Salon)

The web’s worst predictions (Daily Mail UK)

Worst Tech Predictions of 2008 (C/NET)
(See also: Top 10 worst tech predictions of all time)

• Global Insight: 2008 Forecasts Reviewed (PDF)

• The Most Inane Punditry of the 2008 presidential campaign (Media Matters)

Not predictions, but real time errors in assigning  casting, via MarketBeat:

2008 Lookback: The Blame Game

Bonus! Not a forecaster, but the person who consistently gets the present wrong:

Media Matters’ 2008 Misinformer of the Year

>

Related:
The Folly of Forecasting
RealMoney.com Contributor
6/7/2005 1:05 PM EDT

http://www.thestreet.com/_tscana/comment/barryritholtz/10226887.html

Worst Calls of 2008 (November 2008)

http://www.ritholtz.com/blog/2008/11/worst-calls-of-2008/

Category: Financial Press, Markets, Psychology, Really, really bad calls

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

54 Responses to “UPDATED: Worst Predictions for 2008”

  1. Mannwich says:

    Kind of fitting that so called “expert” (on what, since he’s wrong almost a frightening 100% of the time? Almost a perfect contrary indicator) Bill Kristol still gets to spout his nonsense on a regular basis with the NY Times.

  2. Mannwich says:

    Barry: When are you going to break out your list? I hope that’s coming soon. These people need to be called out.

  3. this, from BusinessWeek:

    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.

    Months prior to that slurp-piece that Leslie Stahl did on “60 Minutes”, re: Frank

    “The most intelligent member of the House…”

    Some things really are Pornographic..

    when do journos begin to become ‘willful accessories, after the fact’?

  4. Mannwich says:

    @Hoffer: “When do journos begin to become ‘willful accessories, after the fact’?”

    I think we’re already well past that point, hence the credibility crisis in the mainstream media and subsequent emergence of bloggers and other Internet sources that are not “bought and paid for” to fill the void.

  5. Steve Barry says:

    Barry,

    When you do a Best Predictions for 2008, I expect to be there. (see my predictions from 1/2/08 and early Jan calling for one of the worst years in S&P history…my calls in July that Obama would win and the market will immediately tank…and my call that Buffett had jumped the shark)

  6. Steve Barry says:

    and my late August call to go all-in QID.

  7. jharlow says:

    My personal favorite (Not a business-related one, and technically it’s by Jan ’09, but I don’t see this one happening):

    http://www.telegraph.co.uk/news/worldnews/1575173/President-Bush-predicts-Middle-East-peace-deal.html

  8. Jeff,

    I hear ya, though, I was referring to an actionable Legal Liability.

    at least the NYT comes with a disclaimer: “All the news that’s fit to Print.”
    ~
    past that, SB’s 01/02 call should be chiseled in something other than pixels, that was Epic..

    the Buffett call-out isn’t too far behind..that dude gets so smoke blown up his skirts, it’s a surprise he hasn’t been summonsed for Indecent Exposure..

  9. The worst prediction is any prediction that is made in the first place. Of course, making a prediction is quite easy for those who do not manage money, such as the case with most media, because there are no real consequences for having made the prediction.

    What’s worse is that many investors follow those “predictions.”

    “He who establishes his argument by noise and command shows that his reason is weak.” ~ Michel de Montaigne

  10. Steve Barry says:

    Thanks Mark E.

    Here’s one prediction from today’s WSJ that I pray cannot come true…

    DECEMBER 29, 2008
    As if Things Weren’t Bad Enough, Russian Professor Predicts End of U.S.
    In Moscow, Igor Panarin’s Forecasts Are All the Rage; America ‘Disintegrates’ in 2010Article

    By ANDREW OSBORN
    MOSCOW — For a decade, Russian academic Igor Panarin has been predicting the U.S. will fall apart in 2010. For most of that time, he admits, few took his argument — that an economic and moral collapse will trigger a civil war and the eventual breakup of the U.S. — very seriously. Now he’s found an eager audience: Russian state media.

    In recent weeks, he’s been interviewed as much as twice a day about his predictions. “It’s a record,” says Prof. Panarin. “But I think the attention is going to grow even stronger.”

    Prof. Panarin, 50 years old, is not a fringe figure. A former KGB analyst, he is dean of the Russian Foreign Ministry’s academy for future diplomats. He is invited to Kremlin receptions, lectures students, publishes books, and appears in the media as an expert on U.S.-Russia relations.

    But it’s his bleak forecast for the U.S. that is music to the ears of the Kremlin, which in recent years has blamed Washington for everything from instability in the Middle East to the global financial crisis. Mr. Panarin’s views also fit neatly with the Kremlin’s narrative that Russia is returning to its rightful place on the world stage after the weakness of the 1990s, when many feared that the country would go economically and politically bankrupt and break into separate territories.

    A polite and cheerful man with a buzz cut, Mr. Panarin insists he does not dislike Americans. But he warns that the outlook for them is dire.

    “There’s a 55-45% chance right now that disintegration will occur,” he says. “One could rejoice in that process,” he adds, poker-faced. “But if we’re talking reasonably, it’s not the best scenario — for Russia.” Though Russia would become more powerful on the global stage, he says, its economy would suffer because it currently depends heavily on the dollar and on trade with the U.S.

    Mr. Panarin posits, in brief, that mass immigration, economic decline, and moral degradation will trigger a civil war next fall and the collapse of the dollar. Around the end of June 2010, or early July, he says, the U.S. will break into six pieces — with Alaska reverting to Russian control.

    http://online.wsj.com/article/SB123051100709638419.html

  11. MRegan says:

    Mr. Hoffer-

    Given the Indecent Exposure to this market we’ve all been subjected to this year, I think we all deserve a good, vigorous summonSing before year end. Might clear the mind for the coming year.

    WRT predictions, extremely difficult activity and fruitless for most. The ones who can anticipate with any precision more commonly keep their own counsel. Fundamentally, those who seek to disseminate their view of the future are seeking to achieve something other than accurate forecasting. That said I can reasonably predict that I will be sending my uncle a double sawbuck to satisfy the conditions of an ill-considered bet I made with him in the spring. I predicted that Dumbya would have fled the country by Jan 2009 and be holed up in Paraguay with a nasty supurating parastical infection in his urethra. “Missed it by that much.”

    I would recommend that people who aren”t familiar with Bruce Bueno de Mesquita read up on his work and some of his calls.

    http://en.wikipedia.org/wiki/Bruce_Bueno_de_Mesquita

  12. Ace says:

    Prediction for 2009: fading those who fade Steve Barry will continue to be an extremely profitable trade.

    I bought big into QID all throughout the year and on every rally that was supposed to be “the bottom”. Closed the position just after the election for almost a 100% gain.

  13. william says:

    After reading this post and the associated links, one can only come to the conclusion that except in the case of Barney Frank, Democrats are always right and Republicans/conservatives are always wrong.

  14. The past performance of the US Economy is no indication of future results. You can bet that there is worse than a 50-50 chance that predictions made beyond 2-3 days will always be understated or overstated.

    http://mast-economy.blogspot.com/2008/12/new-years-week-safe-harbor-statements.html

    Historical data is not useless, but it is never as simple as looking at past performance.

    GNE
    http://www.goodnewseconomist.com

  15. leftback says:

    I hope Barry will reserve a special place for the market predictions of Dennis Kneale and Larry Kudlow.
    Mustard seeds, my arse.

  16. Mannwich says:

    @lb: Please add Bowyer and Luskin to that list.

  17. yeah, SB, that one is bit of a bender, though the WSJ is later, per usual, in picking that up–it’s been around for awhile..

    these guys, for ex.:
    http://www.stockhouse.com/Community-News/2008/December/1/Igor-Panarin-s-predictions-for-the-U-S-

    have had it for nearly a month..

    it would suck to lose Alaska, there’s a lot more there than, just, Polar Bears and Pt. Barrow..

    I haven’t seen why he thinks it would revert to Russia, though..

    past that, MRegan, w/this: “Fundamentally, those who seek to disseminate their view of the future are seeking to achieve something other than accurate forecasting.”– In the main, no kidding. “Forecasts” are great Tools for agitprop/disinfo dissemination, as well, handy in ‘predictive programming’…

    PsyOps, fun for the whole Family–to your point of ‘Indecent Exposure’..

    though, re: your prediction, these peep: http://www.spirituallysmart.com/bush_paraguay.html
    were on the same wavelength, if that’s any consolation~

  18. also, re: de Mesquita, he’s a real cupcake. almost like a version of Kissinger crossed with MPP Computing..
    http://en.wikipedia.org/wiki/Parallel_computing

    IOW, bringing the grid, to the Grid..Realpolitik on petaFLOPs

    I’m not sure which is worse, that catz like that dude are allowed the cover of Educational Institution sinecures, or that they expose him to young minds, still in school..

  19. leftback says:

    @TPC: The Giselle bottom is my favorite.

  20. ottovbvs says:

    “Mannwich Says:

    December 29th, 2008 at 10:22 am
    @Hoffer: “When do journos begin to become ‘willful accessories, after the fact’?”

    I think we’re already well past that point, hence the credibility crisis in the mainstream media and subsequent emergence of bloggers and other Internet sources that are not “bought and paid for” to fill the void.”

    The problem with this theorem I’m afraid is that the “bought and paid for” MSM are the main source of raw material for “not bought and paid for bloggers.” Viz: this whole thread.

  21. Mannwich says:

    @lb: For obvious reasons……

  22. Steve Barry says:

    Don’t forget countless “Vince Farrell Bottoms” on CNBC…the same Vicnce Farrell I presume now heard on a Bloomberg Radio promo touting how listening to Bloomberg is so important to him…what balls…screwing CNBC after so many appearances.

  23. Moss says:

    Amazing how any of these people either political or financial have any credibility. Yet they ALL remain in their current perches chirping the same old BS. The travesty is that they are not held accountable by their employers and are still considered experts, pundits and mavens.

  24. TPC says:

    @ leftback:

    Yes, that is a fine bottom. Best bottom of the year. I’m sure Tom Brady is bummed about having to stay home all year….

  25. rww says:

    BR, isn’t there a natural tension if not conflict between the interests of your paying clients and your public forecasts? IOW, isn’t it often true that you would want to say publicly the opposite of what you say privately?

    Since there is, here at least, no doubt about your good faith, how do you reconcile the conflict? Or do you not see one?

  26. Mannwich says:

    Kass’ surprises for ’09. Many of his ’08 surprise predictions were pretty darn good……

    http://www.thestreet.com/story/10455209/3/kass-20-surprises-for-2009.html

  27. rww says:

    Here are Kass’ calls for 08:

    http://www.thestreet.com/story/10396519/4/20-surprises-for-2008.html

    He was directionally right but excessively optimistic

  28. re: Kass, I’m not sure about his ‘reverse migration to MutFunds/Indices’-thesis..

    most peeps that I’ve heard even talk of ‘investing’ were squawking about catching the knife in housing, buying busted notes, or scalping tax liens, and, maybe, re-fi-ing the ol’ Homestead..

    haven’t heard a lot of enthusiasm for things ‘made on Wall St.’..
    http://www.thefreedictionary.com/enthusiasm

    past that, seems that he thinks that, after a little ‘softness’, the wizardry of W.D.C. will kick in, and we’ll be off and running, once more..

    while that’d be nice, and all, as overlevered as we are, something’s telling me we can’t get that lucky..

  29. DL says:

    Kent @ 11:07

    When you decide on an asset allocation (stocks, bonds, cash, real estate, commodities), you’re making a prediction, whether you realize it or not.

  30. DL says:

    Steve Barry @ 11:11

    I’m not that pessimistic. Worst case is that the U.S. goes the way of Great Britain during the period 1900-1940.

  31. DL:

    this: “Worst case is that the U.S. goes the way of Great Britain during the period 1900-1940.”

    v.

    # 2 Security and Prosperity Partnership: Militarized NAFTA
    # 3 InfraGard: The FBI Deputizes Business
    # 4 ILEA: Is the US Restarting Dirty Wars in Latin America?
    # 5 Seizing War Protesters’ Assets
    # 6 The Homegrown Terrorism Prevention Act
    # 7 Guest Workers Inc.: Fraud and Human Trafficking
    # 8 Executive Orders Can Be Changed Secretly
    #9 Iraq and Afghanistan Vets Testify
    # 10 APA Complicit in CIA Torture
    # 12 Bush Profiteers Collect Billions From No Child Left Behind
    # 13 Tracking Billions of Dollars Lost in Iraq
    # 14 Mainstreaming Nuclear Waste
    # 15 Worldwide Slavery
    # 16 Annual Survey on Trade Union Rights
    # 17 UN’s Empty Declaration of Indigenous Rights
    # 18 Cruelty and Death in Juvenile Detention Centers
    # 20 Marijuana Arrests Set New Record
    # 21 NATO Considers “First Strike” Nuclear Option
    # 22 CARE Rejects US Food Aid
    # 23 FDA Complicit in Pushing Pharmaceutical Drugs
    # 24 Japan Questions 9/11 and the Global War on Terror
    # 25 Bush’s Real Problem with Eliot Spitzer
    http://www.projectcensored.org/top-stories/category/y-2009/

    it seems to me that that ‘long, slow slide into Eurosclerosis’-meme is nothing more than DeLuxe Prole Feed to anesthetize the ‘educated’-class..

  32. ottovbvs says:

    “DL Says:

    December 29th, 2008 at 1:50 pm
    Steve Barry @ 11:11

    I’m not that pessimistic. Worst case is that the U.S. goes the way of Great Britain during the period 1900-1940.”

    Actually the Brits experienced something of an economic boom from 1900 to 1914. As I recall from economic history classes long ago their coal production was the highest they ever achieved in 1913. It was WW I which did the Brits in. They essentially funded most of the allied war effort and never got their money back while they paid off their own loans to the US. Debt payments were about a third of the national budget in the early 30′s. Meanwhile their international trade collapsed during the war and never recovered. They moved from being the world’s largest creditor nation to the largest debtor or one of the largest. Sound familiar.

  33. DL says:

    Mark E Hoffer @ 2:15

    I could write a 20 page response to that.

    Suffice it to say that what I want for the U.S. is long-term economic growth, not short-term palliatives.

  34. Steve Barry says:

    I hope for his sake, Kass was kidding about those predictions.

  35. leftback says:

    Stevo: I am pretty sure that Dougie is taking the mickey with several of these…. perhaps he wrote this April 1st?

    ~~~

    BR: Remember, these are not straight predictions; the basis of Kass’ forecasts is that these are ideas that most people think are very unlikely, which that Doug believes has a better chance of occurring than the crowd.

    Call them “Unlikely Possibilities”

    (I’ll get a post up on them this weekend)

  36. Mannwich says:

    I thought that many of Kass’ surprises for ’09 were a little loopy this year as well, unlike last year’s where he was pretty accurate about many of them.

  37. leftback says:

    Jeff: I think Kudlow and his mates got hold of Dougie’s laptop and infiltrated his predictions.
    Housing recovery? In one small distant corner of the desert exurbs of LA, maybe.
    Did I mention I am looking forward to watching the Manhattan housing market crumble???

  38. Mannwich says:

    @lb: Part of me thinks that Dougie just doesn’t want to sound too negative as a way to appease others (ahem, Kudlow) who may not include him anymore in their inner circle if he doesn’t offer a mustard seed of positivity as an olive branch…..he doesn’t seem like that type but I think it’s an attempt at “balance”, however foolish it may sound.

    Manhattan and the Bay Area will be the final markets (and conventional wisdom myths of yesteryear) to crumble in ’09 and maybe ’10. Wait patiently for it. It’s going to happen no matter what the Feds do.

  39. Steve Barry says:

    My Surprise for 2009:

    Bernie Madoff actually donated the 50 Billion to various charities…he is seen as a hero and appointed head of the SEC. He demands, and gets, an apology.

  40. @ DL, December 29th, 1:47 PM Comment: “When you decide on an asset allocation (stocks, bonds, cash, real estate, commodities), you’re making a prediction, whether you realize it or not.”

    We could argue over semantics but my investment practices (i.e. asset allocation) are not “prediction” in my perspective. They would be better described as “risk management.”

    When I decide to carry my umbrella with me to a meeting or inside a restaurant on a cloudy day, for example, I am not “predicting” that it will rain. I am preparing for a storm that may or may not come today. If the storm does not come today, I will still hold my umbrella for a future storm.

    Also, my purchase of the umbrella is prudent because I know a storm will eventually come, especially because I purchased the umbrella on a sunny day, when everyone else was buying sun-tan lotion. On rainy days, I will purchase sun-tan lotion.

    In summary, if “prediction” is preparing for certain conditions that are likely to occur in the not-too-distant future, and openly saying that I have no knowledge of the precise timing of the events for which I am preparing, then I am guilty of “prediction.”

    Thanks for the thought-provoking exchange…

    Cheers…

  41. DL says:

    Kent @ 12:04

    Fair enough.

    But surely there are times when you’re feeling more risk averse than others.

  42. Steve Barry says:

    The last few days remind me of the end of 2000…everyone saying “I’m glad this year is over”…in fact, I was interviewed by NBC News on the street that year and I gave a sound bite “I’m glad its over” that was on the Nightly News.

    The feeling now is similar to then and I fully expect 2009-10 to be as worse or worse than 2001-2.

  43. Tom K says:

    @ Kent @ The Financial Philosopher
    – “The worst prediction is any prediction that is made in the first place.”

    I couldn’t have said it better.

    @DL
    - “When you decide on an asset allocation (stocks, bonds, cash, real estate, commodities), you’re making a prediction, whether you realize it or not.”

    I disagree. A blackjack card counter doesn’t make “predictions”: on the next card, the next hand, or the next game. A card counter deals in probabilities, not predictions. Investors should attempt to do the same.

    Successful market timers have a long term hit rate of <65%. They don’t make money by making good predictions.

  44. MikeDonnelly says:

    I’ve got two more:

    Bob Doll at BlackRock

    “Look for equities to maintain bull market course in ’08″
    “U.S. narrowly escapes a Recession”

    Nariman Behravish at IHS Global Insight

    “U.S. Economy will rebound in the second half of 2008.”
    “Housing sector will bottom out in mid-2008.”

  45. Steve Barry says:

    Looks like 2008 will close with the 10 day MA for put/call and the 21 day at the lows for the year. What will it take to raise some bearishness? Complacency kills.

  46. rww says:

    SB, it feels like last Spring. Which means we need to see at least one, maybe two quarters earnings to shake the tree.

  47. Blackhalo says:

    “they are not held accountable by their employers”

    Uh, their employers are GE and the brokerages that advertise on CNBC. Their mandate it to do one puff piece after another. After all, it is a great time to buy or sell stock.

  48. whosonfirst says:

    Ottovbvs,

    Re GB paying us back in full for their WWI war debt, my understanding is that the only country to pay us back in full was Finland. Not that it matters at this point. But it annoys me that when WWII rolled around they played us like a calliope and even had hopes that they could get us to restore their Empire.

  49. DL says:

    Mark Hulbert on the “year after” a big loss in the market:

    http://www.marketwatch.com/news/story/A-review-stock-market-2008/story.aspx?guid={C804E9C8-2C7C-4E33-84E6-9A056024E3AE}

  50. Al Czervik says:

    Regarding Cramer’s prediction about Bear Stearns, I met a guy recently who is one of 30,000 former Bear Stearns *brokerage* customers who still has no access to his money. When JP Morgan/Chase took it over last March, his account was frozen. He has had no access to his money and no ability to re-allocate while the market was sinking. I think he said he had been given access to *some* of his money.

    My acquaintance says that SIPC guarantees that he’ll get his money back but doesn’t guarantee that it will be promptly. They have been told that the date is January 6, 2009.

    A complete disaster for all involved. Nice work Jim Cramer.

  51. ottovbvs says:

    whosonfirst Says:

    December 31st, 2008 at 1:52 pm

    I’m afraid your facts are a little shaky. The Brits were actually fairly conscientious about trying to pay off their WW 1 debt because of sterling’s continuing status as a reserve currency. Finland was not a direct participant in WW 1 because it was part of the Russian Empire at the time. It declared its independance from Russia in 1917 at the time of the Revolution. Perhaps you’d have been more annoyed if Continental Europe and Britain had ended up as part of Hitler’s empire. As to their WW 2 debt I think they paid the final instalment about two years ago. Also in return for lend lease they had to hand over all their Sterling balances and investments in the US and its territories. Since the US also took over most of their markets too as they were 100% committed to the war effort, the US came out of the liquidation of the British Empire fairly well.