1 Detroit pleads poverty - in style
Detroit execs were initially hoping for $25 billion - and a quick getaway. Like someone arriving at a food bank in a limousine, the chief executives of the three major U.S. automakers spark outrage when they fly their corporate jets to Washington D.C. to beg Congress for a multi-billion dollar bailout. Yes, we know that corporate jets are often a cost-effective way for the heads of far-flung corporations to get around. But someone should have known this wasn't going to look good (and, sure enough, Congress sent the auto chiefs away empty-handed). At the very least, couldn't they have shared a ride?
2 Lamest road trip ever
Let's see...corporate jets are a no-no...the subway doesn't go that far...A bike ride might just kill us...I know! Let's drive the 10 hours from Detroit to D.C. - in one of our cool hybrid cars! Given a second chance after the private-jet fiasco to plead their case before Congress, the Detroit 3 take to the road (separately, of course) in a company fuel-sipper. In the case of Chrysler's Robert Nardelli, the exercise in overkill is particularly awkward: The Chrysler Aspen Hybrid he drove will soon be discontinued.
3 Paulson's 3-page plea for $700B
Treasury Secretary Henry Paulson learns how not to reach for $700 billion. In September, days after Lehman Brothers collapses and two other giants teeter on the abyss, Paulson submits his "break the glass" plan for saving the U.S. financial system. All of three pages, the proposal seeks carte-blanche access to $700 billion in government funding to buy up troubled mortgage assets at the root of the financial crisis - with scant details on how or where the money will be spent. Just as galling, Paulson includes a provision in the bill that will exempt his spending from court challenges. Congress axes the legal cloak, prompting Rep. Barney Frank to quip, "We have disexempted him." But the damage is done, and the proposal fails in the House Sept. 29 - triggering another massive market sell-off.
4 Bloating up the bailout
Maybe three pages wasn't such a bad idea after all...When Congress is done with it, Paulson's proposal for saving the U.S. financial system balloons to 451 pages and is loaded with pork barrel spending - including, unbelievably, a cut in taxes on toy arrows and an extended tax break on "wool products." Backers of the arrow tax exemption - section 503, for the record - say it reverses a wrongheaded 2004 law that sharply increased tax rates on cheap kids' arrows.
5 Mozilo's 'disgusting' reply-all
If you thought the former Countrywide CEO couldn't sink any lower, think again. Already under attack as the overpaid, over-tanned and over-zealous pioneer of subprime mortgages, Angelo Mozilo doesn't do himself any favors in May after reading a customer's e-mailed plea for help with his home loan. Intending to forward the missive to a colleague, Mozilo instead hits "reply all" and sends a response calling the beleaguered homeowner's request "unbelievable" and "disgusting." "Most of letters now have the same wording," grouses Mozilo. "Obviously they are being counseled by some other person or by the internet." Mozilo's heartfelt reply makes its way onto the Internet - and the onetime real estate king finds himself out of a job after Bank of America acquires Countrywide in July.
6 An iPhone app for just $999.99
Nobody would pay nearly a thousand bucks for a screen-saver, right? The release of the new Apple iPhone in July introduces to the masses the world of mobile video games and other time-sucking applications designed by non-Apple software developers - most of them available for less than $10. But one application sneaks past Apple's gatekeepers and onto the company's new App Store: "I Am Rich," a $999.99 screen-saver whose sole feature is a glowing red jewel. Apple gets blasted for making the application available for sale and then quietly removing it, but the real losers? The eight suckers who bought it.
7 Paulson's 'bazooka' backfires
Actions speak louder than words, Mr. Paulson. As shares of Fannie Mae and Freddie Mac plunge in mid-July on worries about their viability, Treasury Secretary Henry Paulson assures Congress that merely promising to give the beleaguered mortgage lenders access to Treasury funding would calm market fears - at no cost to Uncle Sam. "If you've got a squirt gun in your pocket, you may have to take it out," Paulson tells legislators. "If you've got a bazooka and people know you've got it, you may not have to take it out." Congress delivers the bazooka, but investors aren't buying it. Two months later, Treasury takes over both companies in a move that could cost taxpayers billions of dollars.
8 Fannie's delusions of grandeur
Fannie Mae CEO Dan Mudd proves once again that his crystal ball is malfunctioning. In May, Mudd predicts that the government-sponsored mortgage lender will "feast" on weakened competition in the mortgage market - even as its own prospects dim amid mounting credit losses and asset writedowns. By September, on the brink of collapse, Fannie gets a new owner - Uncle Sam - and Mudd loses a job.
9 Sex for oil
This fall, the division of the Department of Interior responsible for granting leases for energy exploration and production in federal waters is caught with its pants down. The agency's Inspector General finds that staffers were taking gifts, having sex and engaging in illegal drug use with employees of some of the oil companies they oversee. As the report detailing the ethical abuses puts it: "We...discovered a culture of substance abuse and promiscuity in the...program."
10 Global warming? What a 'crock'
The General Motors exec behind the Chevrolet Volt electric car hands environmentalists another twig to beat GM with when he reportedly calls global warming "a crock of sh-t." Bob Lutz, GM's vice chairman for product development, later addresses the uproar on his own blog: "General Motors is dedicated to the removal of cars and trucks from the environmental equation, period. And, believe it or don't: So am I!"
11 Housing rescue comes up short
Remember Hope for Homeowners? We didn't think so. In July, Congress passes the only housing rescue to date: a plan to guarantee up to $300 billion worth of mortgages and prevent more than 300,000 foreclosures. But to participate, banks must take steep losses -- and doing so is voluntary. The anti-climactic upshot: A piddling 321 applications have been filed since the program's Oct. 1 launch - and not one loan workout has been completed, according to the U.S. Department of Housing and Urban Development.
12 Cox's short-selling ban
Careful what you wish for. Under attack for not doing more to stop the market plunge, SEC chief Christopher Cox finally institutes a temporary ban on shorting, or betting against, 799 financial stocks. "The emergency order temporarily banning short selling of financial stocks will restore equilibrium to markets," Cox promises. But shares in banks, brokerages and insurance companies continue to plunge, losing a quarter of their value during the three weeks the mid-September order was effective. Some investors say the short ban hastened the flight of capital from stock and bond markets, by showing the government could intervene in markets in unexpected and troublesome ways.
13 McCain's economic denial
At least he warned us: On the morning of Sept. 15, as Lehman Brothers declares bankruptcy, Republican presidential candidate John McCain declares "the fundamentals of this economy are strong." By day's end, the Dow falls more than 500 points, the date becomes known as Black Monday, and McCain starts backpedaling fast. Maybe we should have seen this coming: In late 2007, McCain admits "the issue of economics is not something I've understood as well as I should," adding, "I've got Greenspan's book."
14 Obama's tough talk on NAFTA
In a rare off-message moment for Barack Obama's presidential campaign, a top economic adviser privately assures Canadian officials in February that his candidate didn't really mean it when he threatened to renegotiate the North American Free Trade Agreement, which U.S. blue-collar workers complain has shifted jobs to Canada and Mexico. "Political maneuvering" was how Austan Goolsbee described Obama's protectionist rhetoric to Canadian authorities. Smart politics - until a Canadian government memo of Goolsbee's meeting leaks out and Goolsbee is banished to no-media-allowed shed for the remainder of the election.
15 Microsoft overbids for Yahoo
The headlines seem so quaint now: Microsoft makes a $44.6 billion play for Yahoo in yet another bid to catch up to Google. The $31-per-share offer represents a 61% premium over Yahoo's price at the time of the February overture. Microsoft's strategy makes some sense, but CEO Steve Ballmer fails to anticipate Yahoo chief Jerry Yang's intransigence, which ultimately scuttles any chance of a deal. Nor does Ballmer foresee the economic crisis that, by year end, is dragging down the tech sector. With Yahoo shares trading at $12 apiece, the company is now worth $17 billion. Ballmer, however, gets the last laugh: by year end, he's still calling the shots at Microsoft. At Yahoo, Yang isn't.
16 Yahoo turns down payday
If Microsoft's offer for Yahoo was wrong-headed, Yahoo's opposition to it was downright bone-headed. It took until July, when Microsoft finally throws up its hands and walks away, for Yahoo CEO Jerry Yang to fumble a deal that would have rewarded shareholders with a payday that was three times what Yahoo shares were fetching at year-end. Along the way, Yahoo flirts with Google - only to see any potential deal scuttled by antitrust regulators. As 2009 approaches, Yahoo's chances of turning itself around look slim.
17 SEC's Madoff miss
Leave it to the markets to do the SEC's job for it. It took plunging stocks to bring to light the largest Ponzi scheme in U.S. history - an estimated $50 billion fraud orchestrated by Bernard L. Madoff, one of Wall Street's best-known money managers. The scheme - in which money from new investors is disguised as market returns for early investors - allegedly goes on for decades before Madoff effectively turns himself in in early December. As news reports reveal that the Securities and Exchange Commission had probed Madoff and his New York City investment firm over the years, chief Christopher Cox cops to the embarrassing screw-up: "I am gravely concerned by the apparent multiple failures over at least a decade to thoroughly investigate these allegations."
18 Rage against oil speculators
With oil prices skyrocketing toward their $147-a-barrel high in July, people smell a rat. Oil traders, hedge funds, Wall Street types...they're all to blame for artificially inflating the price of crude and reaping huge profits at the expense of drivers everywhere. Or so the thinking (and Congressional hearings) goes until prices suddenly collapse throughout the fall, bringing oil down to about $37 a barrel. The culprit this time? Softening demand amid a reeling global economy. So much for thinking fundamentals don't matter.
19 Jobs' 'greatly exaggerated' death
Newspapers prepare obituaries of famous people before they die, but few publish them while the subjects are still alive. In August, Bloomberg News accidentally releases an obit for Apple CEO Steve Jobs, who - despite a well-publicized brush with pancreatic cancer - is still alive and kicking. As if that wasn't enough, in October a post on CNN's user-generated site, iReport, claims that Jobs has suffered a heart attack. The erroneous report sends Apple's stock down 10% in just 10 minutes. At his next media appearance, Jobs appears in front of a giant screen with the message, "The reports of my death are greatly exaggerated."
20 Phil Gramm's 'mental recession'
In early July, as the financial crisis spreads to Main Street, McCain campaign co-chair and former senator Phil Gramm appeals to voters and their economic anxieties by calling them a "nation of whiners" and dismisses a troubled economy as a "mental recession." McCain denounces his words and Gramm steps down, but the damage is done.
21 Bill Miller's bad bets
The Legg Mason manager famously beat the market 15 years in a row, but now the market is returning the favor - with a vengeance. Miller's Legg Mason Value Trust was down 59% this year through Dec. 2, posting a far worse showing than the S&P 500, which was down "only" 38%. Miller's problems stem mostly from big bets on beaten-down financial companies earlier this year, many of which then got even more beaten down. Among the biggest losers for Miller were Bear Stearns, AIG and Freddie Mac - in which Miller had amassed an 8% stake on the eve of its government takeover in September.
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