The best blunder award goes to: Financial Express: 23rd December 2008

The year 2008 has been a major blow in reputation for investment bankers, analysts, economists, rating agencies and regulators. The fact that no one can predict a crisis is known, but the fact that people were so consistently wrong was appalling. Consider these ten blunders.
The first institutional blunder was the approach to financial sector bailouts. Bear Stearns started it all in 2007 and the crisis resurfaced when the housing twins Freddie Mac and Fannie Mae raised an eyebrow. Subsequently, we witnessed Lehman Brothers sink even as Merrill Lynch escaped by the skin of the teeth, while AIG brought back the ‘milk of human kindness’ in Mr Paulson. The government evidently was unsure of whether or not moral hazard had to be eradicated or whether there was a larger duty to the public or the failed institution.
The second blunder, in regulation. While investment banks and hedge funds do not have a regulator, banks do. Basel-II takes pride in bringing about discipline across banks and the Fed has made it difficult to skip the rope. Then how come Citibank landed in trouble.
The third, a panic response from the Fed which has once again lowered interest rates to 0.25% at a time when the economy is on the verge of a recession. Now, Mr Greenspan has been named the culprit for the present problem by pursuing a policy of liberal interest rates. It looks like that Mr Bernanke may be starting another bubble—though we are not sure which one this will be.
The ECB and BoE would take the fourth place as being central banks without an independent mind, as they have lowered their indicative rates too, but only after the Fed took the lead. But wasn’t the Euro supposed to actually challenge the dollar and take the lead?
The RBI in India fared no better. Higher inflation prompted interest rates and the cash reserve ratio to be increased. This was at a time when inflation was caused by lower supplies and high oil prices.
Sixth, the government of India has introduced a fiscal stimulus package of Rs 30,000 crore. But no one believes that it will work. Besides, even if it does, it would take time as government expenditure will take time to be approved and tendered (this is very important here) and it would be mid-2009 before we see any action.
The seventh blunder is the behaviour of the Opec. After much dithering it has decided to lower its output by a little over 4 million barrels a day to stabilise prices. They would like a price of $75 per barrel, which seems distant today.
But, the puzzle really is that the prices are down today because of a slowdown, and by cutting output to ostensibly raise prices, it would actually lead to slide in prices as demand falls further. Quite clearly, it is unsure of what has to be done.
The eighth puzzle has been the fall out of the series of bailouts. So far the bailouts have been for distressed financial institutions. But, we had the big three auto companies in the US actually approach the government for a bail out, and why not? After all these people actually bring about production and the auto along with the reality sectors are the leaders in growth. So where should the government stop when it comes to bailouts?
The ninth institutional shock was domestic and the usual suspect, ICICI Bank featured again as deposit holders made a bee line for the ATMs to withdraw money because of a rumour that there was a run on the bank. The dynamism that propelled the bank to stardom with their strong presence in the derivative segment this time and agri loans earlier became a liability, as the RBI went out of the way to reassure everybody that all was well.
And lastly, a blow to the economy was dealt by the terror attacks on the Taj and Oberoi as this was an attack on the commercial capital. Debates centred on whether or not these attacks would affect the Indian economy—with the general conclusion being that the city and business was resilient (whatever that means).