At the beginning of every year, Wall Street experts predict how it will end. But when it comes to fortune telling, is Wall Street really any smarter than Main Street? Last year at this time, we got predictions from a high-profile economist at Standard and Poors and then got similar predictions from random people at the mall. Now it’s time to look back and see who, if anyone, was right.
Let’s start with the stock market: Here’s what both Wall Street and Main Street predicted for last year.
“We’re expecting see high single digit gains, probably the 8% range.”
-David Wyss, Chief Economist Standard and Poors
And here’s what we got from a random person at the mall.
“It’s not going anywhere from where it is now. It’s going to go sideways.”
-Main Street
So Wall Street said 08 would be up… main Street said sideways… Neither was close. When we talked to Wyss in mid-December, the Dow was down about 30%. How about the price of a barrel of crude oil?
“Your guess is as good as mine… 75 dollars is a reasonable guess, but I will be shocked if it’s right.”
-David Wyss, Chief Economist Standard and Poors
“I think it will go up at least another one and a half percent.”
-Main Street
Again, not even close. Oil started 2008 at around $97 a barrel, then gushed close to $150 in July. And as of mid-December, we’re under $50. So again, both Wall Street and Main Street missed the mark. Now, what about the roof over your head?
“A year from now I expect to be down about another 6%.”
-David Wyss, Chief Economist Standard and Poors
“Housing prices will decline 5 to 7%”
-Main Street
Bingo: both were right: as every homeowner knows, home prices have been terrible. Final tally? When it comes to predicting 2008, you were just as well off asking a stranger on Main street as a top pro on Wall Street. So much for history.
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