Just about everybody got wrong-footed by 2008, nevertheless some the masses’s mistakes were sincerely spectacular

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By Peter Coy

Here are some of the discomfit predictions that were made about 2008. Savor them—a crop like this doesn’t come along each year.

1. "A very powerful and abiding rally is in the works. But it may need one more join 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 venture of going under…I speculate they are in good shape going forward." —Barney Frank (D-Mass.), House Financial Services Committee chair, July 14, 2008

Two months later, the restraint unnatural 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 parlance

For the halt 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

Five days later, JPMorgan Chase (JPM) took over Bear Stearns with form of sovereignty help, nearly wiping out shareholders.