It's A Wrap

It’s a wrap.

2008 is over and 2009 is upon us. I’m feeling a little more confident about emptying my root cellar of all the Millennium Bug survival supplies. Who knew bottled water had an expiration date? I’m guessing I may need to take these bottles to a hazardous material dump as I have no idea what drinking water turns into after 8 years. Then again, maybe if I keep it long enough it will turn into biodiesel.

2008 has been quite a year. And if it taught us anything it taught us that all the high powered brain trusts, financial advisors and psychic soothsayers don’t actually have any better chance of predicting the future than Punxsutawney Phil.

Oh sure, there were those that predicted a hurricane would hit the U.S. coast and that there would be unrest in the Middle East but those predictions could have been made by a monkey with a dart board.

Where were the predictions about the complete collapse of the worldwide credit markets? Where were the predictions about the galactic rise in oil prices followed by a precipitous fall equal to Orson Wells on ice skates? Where was the prediction that the Chicago Cubs would have the best record in the National League only to break their fans hearts in the first round of the playoffs? Well okay, maybe that one could have been predicted by that dart throwing monkey.

2008 was an historic year financially on too many levels to count and nobody saw it coming. With all the computer modeling, chart plotting and algorithm tracking it all came as a surprise. For all the 24 hour news and financial news stations with an army of expert talking heads equal to the population of China, nobody sounded the alarm until the fire was already burning out of control. It took Charlie Small Potatoes and turned his 401K into a 201K and morphed Joey Big Potatoes from a billionaire to a millionaire. It turned an army of day traders into a crew of night janitors and sent thousands of starched shirts from Wall Street to Wal-Mart.

But for all its downside, 2008 confirmed some very important points. First that there is nothing wrong with making money, but when we allow the opiate of quick profits to become so overwhelming that we lose sight of the fundamentals of sound business practices and risk management we stand a very good chance of racing past the sign posts that warn that the bridge is out ahead.

It also confirmed that no matter how hard the rest of the world’s economies try to act as if they are totally independent, if the U.S. economy gets the sniffles the rest of the world will end up with pneumonia.

And finally 2008 once again proved that regardless of their stated intent, when politicians get involved in the inner workings of private businesses no good will come of it. The bulk of the problems we face today can be directly traced back to the U.S. Congresses installation of a welfare system into the housing credit markets. Many bright and highly paid financial gurus thought they could make money ad infinitum on this folly. They were wrong and now are unfortunately looking to the problem for the solution.

As we open the door to 2009 many of the same prognosticators that missed not only the mark but the whole damn target in 2008 will be back with a whole new set of predictions. I do not claim to be smarter than anybody else when it comes to looking into the future, but I do have a few predictions of my own.

I predict that unfortunately more and more businesses will attempt to carry the “Too Big To Fail” banner in hopes of getting their turn to feed at the government trough.

I predict that the House and Senate Democrats will begin to buckle under the weight of the responsibility that comes with absolute power.

I predict that House and Senate Republicans will miss every opportunity afforded them to make any significant advances for the midterm elections.

I predict that a thoughtful self-biographer will begin to feel like the dog that finally caught the car.

But take each of these and my predictions yet to come with a grain of salt as I also predict the Cubs will shine in 2009.