Meridith Whitney is one of the most respected financial analyst in the business. She was one of the few analyst who called the market top in 2008 and was bold and honest enough to make her views public.
In this interview on CNBC Meridith states that she has not been so bearish on the stock market in a year and that she can make no sense out of current evaluations.
Here are a few other points that Meridith makes in the interview:
* 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. Meredith said she feels that there is still a much bigger risk related to residential mortgage exposure in 2010, 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.
It is interesting that Meridith was speaking on a day when new highs for the rally move were being made for the year. It is good to keep in mind that over the past few years Meridith Whitney’s timing and market insights have been spot on.
Do not trust the rally in this market. Wall Street loves suckers who buy over valued stocks.
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