The Ten Worst Economic Predictions of 2008

From Businessweek. My favorite:

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.

I used to get several e-mails a day telling me why I am wrong about oil that basically boiled down to - "T. Boone Pickens is an expert on the subject. You are not. So I'll believe him." While it is true that Pickens is an expert and I am not, I stand by all my earlier statements that the price of oil is inherently unpredictable. Trying to predict the future price of oil is a fool's errand. I wrote this on May 7, 2008:

A 21% movement in oil prices over a 6-month period would not be unusual, in either direction. But I suspect we won't be seeing any articles predicting a 21% price drop any time soon. Given that all the convential wisdom seems to be saying that oil is unstoppsable upward trend, I am almost tempted to start buying put options.

Nailed that one. My prediction for 2009? Some "expert" is going to make a laughly bad prediction about oil prices and that prediction will make Businessweek's list next year.