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The Worst Predictions About 2009


To be fair, 2009 was a year that defied prediction. Who would have thought the stock market would drop like a stone until early March and then abruptly rise like a rocket? For that matter, who would have predicted Tiger Woods' ugly fall? Still, if you stick your neck out and prognosticate in public, you have to be prepared to take some ribbing when you're wrong. Looking at you, Rick Wagoner. PREDICTIONThe unemployment rate will top out at 8% in the third quarter of 2009 if the Obama stimulus plan is approved. —Chart of projection by Christina Romer and Jared Bernstein, economic advisers to President-elect Barack Obama, Jan.10, 2009 REALITYToo optimistic. The jobless rate hit 10.2% in October despite approval of the Obama plan.
PREDICTION"Let's not mince words: This looks an awful lot like the beginning of a second Great Depression." —Princeton University economist Paul Krugman, New York Times op-ed column, Jan. 5, 2009 REALITYToo pessimistic. Congress wasn't as bold as Krugman wanted, but the economy was growing by the third quarter anyway.
PREDICTIONPresident-elect Barack Obama will be able to do things at "warp speed that no other President has been able to do in a long time." —John Podesta, co-chairman of the Obama transition team, quoted in the Chicago Sun-Times, Jan. 19, 2009 REALITYObama was stymied by united Republican opposition on multiple fronts, including health care.
PREDICTION"In short, under the robust leadership of Sheikh Mohammed, the UAE [United Arab Emirates] and Dubai are enjoying rapid change and development that is providing a clear lead in the Gulf." —Stephen Timewell, The Banker, Oct. 1, 2008 REALITYIn 2009, Dubai's overextended property developers struggled to pay interest on their towering debts and had to be bailed out with $10 billion from Abu Dhabi.
PREDICTION"I have decided to raise the current level of influenza pandemic alert from Phase 4 to Phase 5 [which means that a global outbreak is imminent]. … It really is all of humanity that is under threat during a pandemic." —Margaret Chan, Director-General of the World Health Organization, Apr.29, 2009 REALITYHalf-right. Yes, H1N1 did spread globally. But it's hard to argue that "all of humanity" was under threat.
PREDICTIONA quick, prepackaged bankruptcy for General Motors might stall, leading to "a long period of bankruptcy which I believe would result in liquidation of the company." —GM CEO Rick Wagoner, at a Christian Science Monitor breakfast, Mar.17, 2009 REALITYGM raced through bankruptcy court in 40 days, and by the end of September was sitting on $43 billion in cash.
PREDICTION"Tiger never does anything that would make him look ridiculous." —Golf Digest, January 2010 issue, on how President Barack Obama could learn from golf great Tiger Woods REALITYSponsors yanked ads featuring Woods after he crashed his car and later admitted to "infidelity."
PREDICTION"My long-term opinion is that the bear market has several years left to run, and stock prices will go a lot lower. … So any rally that happens is going to be a bear market rally." —Robert Prechter, chief executive at research company Elliott Wave International, in an interview with Reuters, Feb.27, 2009 REALITYA week later U.S. stocks hit bottom. The S&P 500 was up 64% from its low by mid-December. (Then again, Prechter could still turn out right…)
Coy_190
Coy is Bloomberg Businessweek's economics editor. His Twitter handle is @petercoy.

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