Five unforgettable -- and oh-so-wrong -- predictions from the past year

NEW YORK -- In 2008, we certainly learned why some folks shouldn't try to make predictions about the economy.

Let's take a look at what some of our "in-charge" people had to say last year -- and how we've all learned that we can't always trust what we hear.

 1. Barney Frank. In July, the chairman of the House Financial Services Committee said: "I think this is a case where Fannie Mae and Freddie Mac are fundamentally sound. They're not in danger of going under.... I think they are in good shape going forward."

Well, for another two months, anyway.

 At least he followed up those comments with: "We made a mistake as a society in promoting home ownership as a universal achievable goal." I like it when people admit mistakes. We need more of that.

2. George W. Bush. In March, the president said the "market is still in the process of correcting itself."
No kidding! This is one of the grand understatements of the year. In about as much of an about-face as we can expect from Bush, his position changed to "Wall Street got drunk, and now it's got a hangover." If he were still commenting on the topic, I'm guessing Bush would say Wall Street is now passed out next to the porcelain throne.

3. John McCain. The Republican presidential nominee told us in April and again in September that "the fundamentals of our economy are still strong."
Perhaps he was trying to spin positive the sinking of the Titanic. But statements like this are likely why November's election turned out the way it did.

4. Oil prices to hit $200? I'm not sure I've seen anything rise and fall as fast as the price of oil this year. And of course, as oil was going up, and much of the demand seemed to be "made in China," forecasting ever higher prices became fashionable.

Oil industry guru T. Boone Pickens forecast $150 a barrel by the end of this year (it almost got there, but it's now hovering at about $48). The normally reserved Goldman Sachs pegged it at $200 in the "not too distant future" with a supply disruption. And naturally those forecasts drove increases -- apparently much more than the fundamentals did.

I should note, in Goldman's defense, they predicted a possible drop to $60 if "normalized" trends returned to the marketplace. Guess things got more normal than they expected.

5. Bernie Madoff. In late 2007, Madoff said: "In today's environment, it is virtually impossible to violate rules."

Apparently, he figured out a way to do just that.

Trust your instincts

So what does it all mean? A few chuckles, yes. And much to wonder about in the folks in charge and the best and the brightest they hire. But it also brings this thought to mind: Most of the time, you're your own best judge of the facts. Others can help, and some will be right on. But as chief executive of your own finances and your own destiny, act on what you see and what you know. Trust your instincts when it comes to your investments. If you find a product that works great for you, look into whether the company that makes it is publicly traded. If you can buy shares, maybe you should check it out.