The Worst Prediction About 2008..HAHA…
Here are some of the WORST predictions that were made about 2008. Savor them — a crop like this doesn’t come along every year 
(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(DJIA) was at 12,300. By late December, it was at 8,500.
(2) “AIG could have huge gains in the second quarter.” — Bijan Moazami, analyst, Friedman, Billings, Ramsey, May 9, 2008.
AIG wounded 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 and Fannie Mae 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.
2 months later, the government forced the mortgage giants into conservatorships and pledged to invest up to $100 billion in each.
(4) “The market is in the process of correcting itself.” — President George W. Bush, in a Mar. 14, 2008 speech.
For the rest of the year, the market kept correcting and correcting and correcting…..
(5) “No! No! No! Bear Stearns is not in trouble.” — Jim Cramer, CNBC commentator, Mar. 11, 2008.
5 days later, JPMorgan Chase took over Bear Stearns with government help, nearly wiping out shareholders.
(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 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 costed his investors $50 billion in an alleged Ponzi scheme.
(10) A Bound Man: Why We Are Excited About Obama and Why He Can’t Win, the title of a book by conservative commentator Shelby Steele, published on Dec. 4, 2007.
Mr. Steele, please meet President-elect Barack Obama!! HAHAHA
Source: BusinessWeek
10 Eventful Days in 2008
WHAT A YEAR FOR 2008!! In my 10 years of investing experience, I have never seen anything of this magnitude and severeness 
12 months of chaos and never-ending crises that destroyed wealth and shook the business and financial sector unlike anything since the Great Depression of the 1930’s. Let’s do a recap before 2008 draws to an end and a brand new year begins in 2009:
(1) 2 Jan – Asian market meltdown
ASIAN stock markets were battered, with STI plunging 187.1 points, or 6%, its worst one-day fall since October 1987. Similar carnage struck the region with HK’s Hang Seng Index suffering its biggest fall since the Sept 11, 2001 terrorist attacks. Traders blamed it on hedge funds trimming their positions across the region and intensifying fears of a US economic recession. 1 day later, the US Federal Reserve slashed interest rates to try to stop the global rout. It worked, as Asia’s stocks rallied sharply in reaction, with the Hang Seng Index soaring 10.7% in its biggest 1-day point gain ever. The turbulence was so great that equity experts dubbed that week as the ‘5 days that shook the market’.
(2) 16 March – Bear Stearns bailout
WALL Street and the rest of the world felt the year’s first major financial tremor when Bear Stearns, the fifth-largest investment bank, faced near-collapse. Bear Stearns had invested heavily in US sub-prime mortgage instruments and other securities, which had fallen sharply in value. It survived – sort of – when the US Federal Reserve stepped in to facilitate a fire sale to JP Morgan. The crisis also sparked fears and rumours that Lehman Brothers might also be in financial trouble and sent stock markets down sharply. In late May, Bear Stearns vanished into Wall Street history when its shareholders approved its sale to JP Morgan at US$10 a share. 1 year earlier it was trading as high as US$170 a share.
(3) 3 July – oil hits almost US$150
THE price of black gold soared to a record US$147 a barrel that day, fuelled by a larger-than-expected fall in US stockpiles and the threat of conflict with Iran. The slumping US dollar and speculation from hedge funds further aided oil’s dizzying rise and prompted a Goldman Sachs analyst to forecast that crude could hit US$200 in the next 2 years. But fears of shrinking demand caused by a global recession have sent oil plunging to near US$30 earlier this month – its lowest level in 5 years. The retreat has brought a smile to consumers and businesses BUT the the good times may not last for long, as the Organisation of Petroleum Exporting Countries(OPEC) has promised sharp supply cuts to push oil back to US$75.
(4) 7 Sept – Fannie Mae, Freddie Mac rescued
US MORTGAGE giants Fannie Mae and Freddie Mac were handed a lifeline by the US government, which committed up to US$200 billion (S$290 billion) to boost the much-needed capital the pair failed to get from private investors. The government also offered to buy back mortgage-backed securities and to provide Fannie and Freddie with a liquidity support facility of unlimited size. Their failure was not an option, as they own or guarantee almost half of the country’s US$12 trillion home mortgage debt. US Treasury Secretary Henry Paulson said they were ’so large and so interwoven in our financial system that a failure of either of them would cause great turmoil in our financial markets here at home and around the globe’. Asian financial institutions and central banks – especially in Japan and China – hold billions of dollars worth of debt securities issued by both firms. So the bailout brought lots of cheer to the region, with investors propelling markets from Tokyo to Singapore to their best showing in months.
(5) 15 Sept – Lehman Brothers goes under, Merrill Lynch sold
A FINANCIAL tsunami was sparked when Lehman Brothers – a 158-year-old Wall Street stalwart and the fourth-largest US investment bank – was brought to its knees by the sub-prime mortgage crisis. Facing a mountain of debts, it filed for bankruptcy protection that fateful day – making it the biggest such filing in history. Hours later, the third-biggest investment bank, Merrill Lynch, sought refuge in a US$50 billion takeover by Bank of America (BoA), shocking analysts worldwide. Merrill, a venerable 94-year-old Wall Street institution, agreed to sell itself to BoA for US$29 a share in an all-stock deal. These events created shockwaves around the world and sent stock markets into free fall as investors fled to the safety of government bonds and gold. Even investors in Singapore were not spared. Hundreds of people here, including housewives and retirees, had invested in structured products linked to Lehman, eg. DBS High Note 5…etc. Most have seen their savings largely diminished. Even eight town councils here had about $16 million invested in troubled structured products, which included Minibonds linked to Lehman.
(6) 17 Sept – AIG nearly collapses
ANOTHER instance of the financial crisis hitting Singapore’s shores came when troubled US insurer AIG American came to the brink of bankruptcy after ratings agencies cut its debt ratings. That forced the already cash-strapped firm to immediately raise a further US$14.5 billion to cover its obligations. Scores of Singaporean policyholders besieged AIA’s customer service centre in Finlayson Green to surrender their insurance policies and get their money back. But disaster was averted a day later, when the US government intervened with a US$85 billion rescue loan, saying the insurer’s failure could hurt already stressed financial markets and the economy. Back home, AIA Singapore also assured policyholders that it has enough funds to meet its obligations. It also moved with the Monetary Authority of Singapore(MAS) to calm fears that AIG was so short of ready cash that it would reduce the capital of its subsidiaries or tap into its booming Asian operations for cash.
(7) 27 Oct – Bloody October
STOCK markets, especially those in Asia, were savaged in late October. The carnage was especially bad on Oct 27, when investors dumped regional stocks on fears that government action would not be enough to stave off a deep global recession. HK’s Hang Seng Index saw its biggest drop since 1997, while Japan’s Nikkei 225 index plunged to a 26-year low. In Singapore, $123.5 billion was erased from the market value of stocks that month, with the STI plunging as low as 1,473 points. According to financial information provider Standard & Poor’s Index Services, world equity markets registered their worst month in history, as investors lost an estimated US$5.79 trillion in that time.
(8) 1 Dec – US officially in recession
ARGUABLY the world’s worst-kept secret was confirmed when the National Bureau of Economic Research (NBER) – a private, non-profit research body – concluded that the US has been in recession since December last year. The last time the US was in a recession was in 2001, and this would make it the longest contraction since 1982. If the recession lasts for 5 more months, it will become the most lengthy since the Great Depression. Unusually, the NBER does not define a recession as 2 straight quarters of shrinking economic output. Instead, it looks for a decline in economic activity, spread across the economy, and lasting more than a few months. Some economists predict that the US economy will contract by as much as 5% in the current 4th quarter. The US joined other economies officially in recession, including Singapore, Hong Kong, Japan, New Zealand, Ireland, Italy, Germany and Britain. The euro region and Japan both fell into a slump in the 2nd quarter of this year, making it the first simultaneous recession in all 3 regions in the post-war era.
(9) 11 Dec – Madoff scandal
INVESTORS big and small were rocked when top Wall Street broker Bernard Madoff was arrested and charged with fraud in one of the biggest-ever such cases. This allegedly involved a loss of up to US$50 billion in cash and securities. The ex-Nasdaq chairman was accused of running a ‘giant Ponzi scheme’ – a pyramid scheme in which early investors are paid their promised high returns with money pulled in from newer investors. Big names caught in the scam included Britain’s Royal Bank of Scotland, HSBC Holdings and Man Group, France’s BNP Paribas, Spain’s Grupo Santander and Switzerland’s Union Bancaire Privee and Benbassat & Cie. Even local insurer Great Eastern Holdings said it has $64 million of indirect exposure to Madoff’s funds. Earlier this week, a French fund manager who lost more than US$1 billion of his clients’ money in the scam committed suicide at his Manhattan office.
(10) 16 Dec – Fed cuts interest rate to near ZERO
THE US Federal Reserve made an unprecedented move, cutting its target rate for overnight loans between banks to the lowest level since it started publishing the target in 1990. The Fed slashed rates from 1% to a target range of 0% to 0.25%, and said it would keep rates ‘exceptionally low’ for some time. With no room to cut rates further, the spotlight has now shifted to stimulus packages, particularly the ambitious one being drawn up by US President-elect Barack Obama. Economists expect the FED to expand its purchases of assets to enlarge its balance sheet. This could include buying corporate debt or state municipal bonds to ease the credit squeeze in those markets. However, they also warn that the near-zero interest rate could push the US into a liquidity trap like the one experienced by Japan in the 1990s, when the economy simply refused to respond to rate cuts.
Will 2009 be a better year than 2008? I certainly hope so!! My heart hope so, BUT my head think otherwise. Nevertheless, it is always good to be positive-thinking, right? Wishing everyone of you guys out there a Happy, Healthy and Prosperous 2009!!
Cheers 
Source: Straits Times
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