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When I sat down to actually write this article, my intention was to come up with the top 5 biggest f*ups of 2008, but the reality is that it was too hard to go with just 5. What I thought we’d do instead is just list some and then you guys add comments on your favorites at the end.

So, here we go. In no particular order, here are some top financial f*ups of 2008.

# 1 – Subprime lending mess

You guys remember this, don’t you? I mean, it’s only the cause of all of our problems in 2008. If I were able to actually make a top 10 list, this would have been in it. Who would have thought that when home values dropped and adjustable rates went through the roof that people wouldn’t be able to afford their houses anymore? I mean, the only indication was that they couldn’t afford it when they filled out their applications to begin with, but that was barely noticeable! Gee, we were just trying to help people achieve the American Dream…too bad that dream was effectively flushed down the toilet and left thousands without homes.

# 2 – Credit crisis

This was a direct spin-off of the subprime mess. Basically, creditors dried up their wells for fear of consumer default and the result was more strain on a weakening economy. In truth, the banks probably didn’t have a choice. I mean, with all of their assets tied up in mortgage-backed securities and those going down the crapper, they didn’t really have money to lend….which leads us to number 3.

# 3 – 25 banks fail in 2008

Ok, so not the 70 banks per year of the Great Depression, but this is still a fairly high number. And, if you take into account the fact that the government safe-guarded against bank failures BECAUSE of the Great Depression, and we still lost 25 banks this year, that’s pretty depressing. Fortunately, deposits are guaranteed these days so people didn’t outright lose their money – not everyone anyway. Even still, the number of bank failures back-to-back caused an insolvency scare for the FDIC where they made immediate plans to set up a line of credit with the Treasury.

# 4 – Bernanke and Paulson

The dynamic dummies had a lot of f*ups this year, but my favorite is when they agreed to let big investment banks on Wall Street borrow up to $200 billion in Treasury securities in exchange for the mortgage-backed securities as collateral. To give you an idea of how stupid this move was, accepting the tainted mortgage loans at face value is the equivalent of handing out home equity loans to people whose mortgage’s tanked, yet basing the loan on the equity they had BEFORE the prices fell. ‘Cause that’s financially smart.

# 5 – Yahoo and Microsoft

I didn’t get into this one a whole lot because I don’t own stock in either company. But, if I had owned stock in Yahoo, I’d have been pretty mad when the deal for $45 billion fell through, and then Yahoo’s stock prices plummeted. It occurs to me that Yang did not take care of his stockholders on that one and he should have been fired before they let him resign.

#6 – The Fed let Lehman Fail…then lent it $138B

It was pretty much standard practice to let investment firms fall this year, but Lehman had bigger ripples then even the Fed anticipated. First they refused to bail them out, then when Lehman failed, they lent them $138B by way of J.P. Morgan Chase as a means to “facilitate an orderly wind-down of Lehman’s broker-dealer operations.” Whatever. I’m inclined to think that the Fed knew they f*ed up big time and were trying to cover themselves.

# 7 – $4 /gallon gas prices

This fiasco was the culmination of a lot of things from the economy to floods, fires, and refineries exploding. But make no mistake, OPEC has a lot of control over how oil goes in the market and they’ve been widely criticized for it. There could have been more control over the gas prices but someone was cashing in.

# 8 – $700 billion bailout

Oh yes, this monstrosity definitely belongs in the top 10. While the bailout itself wasn’t an issue for me – I knew it needed to happen – I think the government jumped in much too quickly without setting proper guidelines. It disgusts me that banks like Chase, Bank of America, and Capital One – who didn’t need the money to begin with – were forced to take their $25 billion share. And since it wasn’t needed, they’re using it to buy other banks. That wasn’t the intended purpose and I blame the government for that. That meal ticket should have come with heavier regulations!

# 9 – AIG

And speaking of heavier regulations, wtf? Pardon me, but I still can’t believe these yahoo’s got away with their little stunt. Ok, they got a little slap on the wrist, but it was light compared with what should have happened. If you missed it, AIG took their top executives – the same ones that ran the company into the ground and the reason they were begging for a bailout – on a $400,000 spa vacation. It was an extravagant vacation as they spent something like $20,000 in spa treatments and $200,000 in room service. Yup, definitely a financial f*up!

# 10 – GM, Ford, and Chrysler

In a classic arrogant CEO move, the three CEOs for these firms took separate jets from Detroit to Washington on the eve of their plea for “The Big Three’s” bailout. I mean really, you expect sympathy and money from an already overextended government when you’re still trying to live in the lap of luxury? Security measure my foot! And don’t even get me started on that $1 salary business. Good grief!

# 11 – Bernard Madoff

One of the most revered names on Wall Street, Madoff was arrested for allegedly running a $50 billion “Ponzi scheme.” Basically, he was paying investor returns from the money of new investors rather than from profit. There’s no actual business going on there. At any rate, his case ranks has one of the biggest fraud cases and he may not have been caught for some time except that he confessed to a couple of employees. I’d really like to know what he was thinking from the time he started this hoax to the moment he confessed.

Ok, so there’s my list of financial goofs this year. What are some of your favorites and how do you feel about those on my list?