Monday, November 16, 2009

Meredith Whitney –I haven’t been this bearish in a year…”

“No Fundamentals behind Stocks”

“How does the Fed exit the GSE program?”

“You did not see this rate of consumer contraction EVER, not even during the Great Depression.”

“States will have their hands out…”

When asked, “Are banks adequately capitalized today,” she responds simply, “No way.”

A good interview with good Whitney answers, she sounds more like her old self. Of course she still hasn’t admitted what we all know, and that’s that all the big banks are insolvent several times over, including BAC. Also, she fails to mention the current dollar carry as a part of the run up in stocks, “It makes no sense to her.” Once the flow of government money slows anywhere, be it into bonds, GSE’s, or wherever, we are going to precede right back to the starting line… the banks have no “tangible book value,” their debts and derivative bets far outweigh any value of any real assets.