Meredith Whitney Says 'Sell the Banks', Believes 'Everything is Expensive Right Now'
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Speaking with Maria Bartiromo on CNBC's Closing Bell, Meredith Whitney has just made some interesting comments that could very well impact the market this week:
- she has not been this bearish on the market "in a year"
- the banking sector is "not adequately capitalized today"
- sees another leg down in the residential real estate market when mortgage rates/prices begin moving lower. To this point, Meredith said she feels that there is still a much bigger risk related to residential mortgage exposure, rather than commercial.
- says that this market makes "no sense" to her and that there is no fundamentals behind the recent rally in stocks
- within the banking sector, the major difference between the market today and last year is that there is no mark-to-market now.
- "banks will go back to tangible book value"
- sell the banks
- would sit on cash until another leg down in valuation, estimates
- "everything's expensive right now"
- expecting a double dip recession, although the second part of "W" will not be as severe
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Mereith Whitney
To be fair, Meredith was bullish, in particular on GS July 14, 2009, on the very same CNBC. She siad this would be a short term trend, after a rally, the banks would again sink. Remember, all they have done is move their toxic assets through off balance accounting over to our friends at the FED. Didn't Enron folks go to prison for this?
Meredith
Do as you wish, but greed will take you down. Meredith has had a very good track record and she is correct as far as I am concerned. How could bankrupt banks a year ago be be solid today? Wake up people!!!
Only 51% retracement
We still haven't gained as much as the 'mother of all' bear market rallies from the Great Depression. That one saw a 52% retracement. We're only at 51% retracement after today's gains. Just something to keep in mind.
Meredith
ignore Meredith at your own peril greedheads!
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All they Have Done
Brian McMorris on Nov 26, 2009 02:53 PM"Remember, all they have done is move their toxic assets through off balance accounting over to our friends at the FED". That is EXACTLY what they needed to do. They traded one type of asset MBS, for another, cash from the Discount Window. By doing so, they have created the best balance sheets in the history of banking. The difference between this and Enron in one word is Fraud. Enron covered up and lied about its shell game. The Fed and banks are trading assets with the whole world watching. There is no sleight of hand. And in this case, the assets are real, not ficticous like Enron's. The banks are healing as they should. The Fed can hold the deeply discounted MBS and other derivatives until they mature. Banks can't. Ms. Whitney is apparently trying to follow up one call with another. She has her 15 minutes of fame. There is a long history of "one hit wonders" in the financial analysis world. It is the rule, not the exception.