Fed Chair Said Subprime Was "Unlikely to Seriously Spill Over." 15 Months Later, the Global Financial System Collapsed.

Speaking via satellite to the International Monetary Conference in Cape Town, the Fed Chair assured everyone that solid income growth and low mortgage rates would "ultimately support the demand for housing." He was technically correct — demand for housing was about to spike dramatically, specifically for foreclosed homes. By September 2008, Lehman Brothers was bankrupt, AIG needed a $182 billion bailout, and the Dow had shed 54% from its peak. The "unlikely spillover" turned out to be the worst financial crisis since the Great Depression. Bernanke later admitted he missed it, but earned a Nobel Prize in Economics anyway for his work on... bank failures. You truly cannot make this stuff up.