Meredith Whitney doesn't understand fiscal policy impact

Meredith Whitney was on CNBC this morning and was asked if she thought there was a chance that all the fiscal stimulus might actually work. Her response was, “It’s all hodgepodge. The simpler thing to do would be to find a way to get the small players (small banks) to start lending again. And put limits on credit card fees.”

The Citigroup call made Meredith Whitney famous and perhaps even rich, but her response to that simple question about stimulus and its effect on the economy almost guarantees that she will be very late on calling a turnaround. That will be to the detriment of clients at her newly formed advisory firm. Like so many others, she fails to understand, or marginalizes, the impact of government spending on the economy, which at times can be profound.

Bank stocks are rising again. The economy is stabilizing and growth will return at least up until the point where fiscal policy starts to apply drag. That’s not likely for a while.

Read Warren Mosler’s excellent piece on Meredith Whitney.

Wall Street "star" Meredith Whitney blows up and is back giving interviews to Fox News.

"Famed" Wall Street, "star" Meredith Whitney is back to where she started--with nothing, and doing interviews with Fox Business after she swore she'd never go on Fox again. (She considered Fox to be too lowly a network for her highly important stature.)

Say what you want, but I guess this proves what I said right from the very start: that this woman's fame always befuddled me. I worked alongside her for years at Fox News, where she was a business contributor, like me, and never found anything she said to be all that insightful or intelligent. For sure I don't think she had much of a grasp on the markets or, the economy.

I remember back in 2009 when the fiscal stimulus was announced, she said it wouldn't do much because it was a "hodgepodge." (A fucking hodgepodge? Seriously? And she was already big-time famous by then.)

Even the whole, Citi "call," seemed like a sham to me, too. Fadel Gheit, who is an Oppenheimer (where Whitney worked) Managing Director and senior oil and gas analyst once told me that Whitney ripped off that call from her former boss.

Anyway, the media went crazy over her and that made her a star and rich, but then she proceeded to fall flat on her face with a series of blunderous calls. (More hodgepodges, I guess.)

It wasn't long before her research firm had to close its doors because of client defections. At one point she even had John Paulson as a client. Remember Paulson? The obscure money manager who nobody knew for years, but then he rocketed to massive fame and fortune with that rigged, subprime trade that Goldman structured, which was ultimately deemed an exercise in fraud?

Did Whitney also advise Paulson to buy gold? Remember that one, too? Paulson thought that ZIRP and QE would lead to hyperinflation. The "genius" was just another Schiff. Only richer.

There were other terrible calls, too. Like the one where she said that hundreds of municipalities were going to go bankrupt.

When her research firm closed, she moved to Bermuda and started a hedge fund and got some other hedge fund clown to "gift her" $50 million in seed capital, which she proceeded to blow out. Finally the guy couldn't take it anymore and sued to get his money back, but only after she refused to return it.

Wow. You can't make this shit up even if you were writing a script for some crappy Hollywood B movie.

The funniest thing about Whitney, though, is how she married this gung-ho 'murica, cowboy-wrestler, John Layfield, who still, I think, is a regular on Fox's Saturday morning business block. As an aside, you gotta love that about Fox News...they don't give a shit who they put up there as long as it helps ratings. Do you believe anyone would take investment advice from this dude?

And now she, too, is back giving interviews at Fox. Oh, how the mighty have fallen. (Some of them, anyway.)

P.S. There's a lot more about Whitney that we posted up over the years right here on MNE. Check it out.

Meredith Whitney has a severe case of cognitive dissonance

Remember cognitive dissonance? I've spoken about it before. That's when an idea or view runs counter to your belief system. It causes stress or internal conflict. The way many people deal with cognitive dissonance is by rationalization, that is, they make up more and more reasons why their view must be correct and the opposing view wrong.

Meredith Whitney has become so famous on her bearish bank call that it has caused her to acquire an acute case of cognitive dissonce. (She's fearful of giving up that view because it has brought her so much success.)

Recently a number of banks reported very strong profits so far for the year. This development is highly contrary to Whitney's view, so she has to rationalize it. And what is her rationalization (explanation)? She says the profits are an "illusion."

An ILLUSION!!

This type of rationalization is similar to the laughable stuff that comes from people like Jim Rogers or Peter Schiff. When the economic data is good or when the facts run counter to their views they simply say, "Do you BELIEVE those numbers??" It's their way of saying that the government is making up the numbers and telling us all lies: That THEY are right and you must believe them above whatever mountain of evidence is presented, because ALL the evidence is made up.

Same with Whitney. When she says that the profits are "an illusion," she's gone completely hyperbolic.

Read article here.

It took a few years, but Meredith Whitney is now seen as what she really is: another Wall Streeter who's not all that bright

I sat with her on panels at Fox News for years when she was a contributor. I was amazed when she became so super famous. Did the media really know anything about this woman? They turned her into an international finance star and she knows nothing. N-O-T-H-I-N-G. Her clients have apparently been finding this out. Even John Paulson left her! LOL!!

Three years ago Whitney predicted that the municipal market would experience "cascading defaults." She said there'd be "hundreds of defaults."

I remember back in 2009, when asked about the stimulus she called it a "mish-mosh" and said it wouldn't do anything.

This woman is insufferable and clueless.

From Business Insider: Meredith Whitney Has Lost Half Of Her Clients And Her Staff Is Down To One Full-Timer

Read more.

Mike Mayo: Another bank analyst buried in his bias

http://www.reuters.com/article/rbssTechMediaTelecomNews/idUSN0641664920090406

I know Mike Mayo personally. His son went to the same pre-school as my daughter and he's a good guy with nowhere near the colossal ego as Meredith Whitney. However, he seems to share her problem of being buried in the bottom-up approach to stock analysis. Such intense number crunching often leads to missing the big picture, especially when basic conditions change.

What Mayo, Whitney and other analysts fail to realize is that lending, asset performance and earnings are all pro-cyclical and the economy is now starting to stabilize. The market already knows about the "bad assets" on the books of banks. What the market is perhaps not discounting fully is the fact that an improving economy will cause assets to perform better, lending to rise and earnings to increase. (A rising tide floats all boats!)

Mayo issued a, "Short all banks" recommmendation on April 6. Since then the Philly Bank Index (BKX) is up 25%.

Last month in an interview on CNBC, Meredith Whitney was asked whether or not government stimulus would have any effect on the economy. She pretty much dismissed it and continued to focus on bank assets, remaining extremely bearish. In fact, she issued a "Short Citigroup" recommendation when the stock was trading at 2. It has more than doubled.

Bottom line is, bottom-up stock analysis is fine, but you have to know when conditions are changing and a BIG element to any economic forecast is what's shaping up in terms of fiscal policy.

Meredith Whitney: What planet is she on?

In the interview below Meredith Whitney says consumer credit has already contracted by a "trillion dollars." I guess she was too busy to go look up the data, which shows that total consumer credit outstanding is $2.5 trillion and is down about $80 billion from its peak. (Get data here or see chart below.)

She goes on to say that credit will drop by more than $2 trillion.

I guess that's why she famous and gets the big bucks...truth is cheap and facts are boring.



Total Consumer Credit Outstanding (Source: Federal Reserve)

Wells Fargo Projects Record $3 Billion 1Q Profit, Smashing Expectations

But of course Meredith Whitney will say it's "just and illusion!"

Listen to Meredith Whitney's theme song!

Well, that didn't take long...

Meredith Whitney is closing up shop.

Just a few years after the media went crazy over this woman anointing her the Smartest Woman on Wall Street, she is closing down her research firm. (Remind you of anyone? Elaine Garzarelli, perhaps?)

I knew Whitney when she was a contributor at Fox. Nothing special, believe me. Further reinforced when she married that wrestling dude, John Layfield.

Whitney is not going away, unfortunately. Now she is opening up a hedge fund, which is interesting because I'm wondering who is going to give her money to manage after her research firm produced such a terrible track record?

Pretty much all these Wall Street "geniuses" eventually prove that they're all more lucky than smart. (Or more often than not, corrupt.)

More on this story now. This is on the Business Insider website:

From Bloomberg:

Whitney started the advisory business amid media coverage including a Fortune cover story crowning her “the woman who called Wall Street’s meltdown.” Her broker-dealer’s Securities and Exchange Commission filings list no revenue in the past three years and about $96,000 of expenses. The unit was inactive last year outside of maintaining compliance and “introducing its services to the market,” according to the most recent report.

No revenues in three years? Seriously?

Can't wait to see her performance.

JP Morgan almost back to "pre-crash" levels. A harbinger for other banks?

JP Morgan stock is nearing 43 per share. It was in the high 40s prior to the onset of the crash. It has almost recouped everything. Is this a harbinger for the other banks and when will Meredith Whitney put out a buy signal on banks? (Not investment banks, but commercial banks.) And to be fair, where's Mike Mayo? Remember him? He's the famed bank analyst who said back in April that you should short all banks.

Whitney, Mayo and others like them make A TON of money for these "calls." You get it all free, here! (Okay...sometimes for $39.95)

Goldman Sachs Gains on Meredith Whitney Upgrade

The stock is up more than 100% since March and Meredith is just now upgrading it to a buy. This is what clients pay her huge money for?

Buy my China Report for $39.95 and get better advice and far more potential appreciation for your stock portfolio!

Meredith Whitney: "I've been a bull all along."

After praising the bank stocks, Meredith tacked the other way, saying unemployment is headed to 13%-15%, implying the economy is headed to the brink of collapse. Can you say, "talking out of both sides of her mouth?"

From www.businessinsider.com.

Citigroup 1Q results top Wall Street forecasts

Citigroup's Q1 results beat the street and its loss was the smallest since 2007. It would have earned $1.6 billion in profit, but it had to pay huge dividends to the government. Once again this is another blatant example of how the inapplicable idea of "taxpayer on the hook," causes policy to actually be destructive to taxpayers. Shareholders took a loss, the government got money, which is nothing more than a reserve drain. So how did that help taxpayers

By the way, where is Meredith Whitney and Mike Mayo. Please feel free to listen to Meredith's theme song.

Roubini: Don't Believe the Stress Tests or the Bank Rally

Back on March 26 famed bear, Nouriel Roubini, said that stocks would go down and the banks are doomed. (I mentioned this in my blog back then.)

Here's where the market averages were back then:

Dow 7924
Philly Bank Index (BKX) 29.16
S&P Financial Sector Spdr (XLF) 943
S&P 500 816
Nasdaq 1545

Since that time the Dow is up 6%, the BKX has climbed 23%, the XLF has gained 25%, the S&P 500 is higher by 11% and the Nasdaq has leaped 13%.

Some "perma bears" may eventually throw in the towel and declare that the bear market is over and a new bull market has begun, but you can be certain that won't happen until stocks are significantly above current levels.

When it comes to Roubini, however, I will make this prediction: He will never, EVER, concede his bearish case for the United States because he harbors a deep resentment toward the country that made him rich and famous.

The good news is, Professor Roubini's 15 minutes of fame are nearly up and that goes for the likes of Peter Schiff, Mike Mayo and Meredith Whitney too!

Oh and one more thing...When Roubini says, "Don't believe the stress tests" he is right, but not for the reasons he puts forth. Investors shouldn't believe them because they are ill-timed. The economy is improving, which means that bank earnings will be rising, perhaps sharply.

Citigroup Net More Than Doubles as Loan Costs Decline

Where's Meredith Whitney now? Got lucky on the way down...clueless on the way up!!! Just like Schiff!!

GOP unifies against any more stimulus spending

Or another way to say this is...

"GOP unifies to permanently lower Americans' standard of living for current and future generations."

Put your money in China, where they are focused on rasing the standard of living of their citizens and investors. Buy my China Report for $39.95 and get better advice than the clients of Meredith Whitney, who probably pay 1000 times more!

Meredith Whitney’s Hedge Fund Said to Be in Turmoil

Well, she had a damn good run on one call--Citigroup--which supposedly wasn't even her call to begin with, but her boss's call when she was an analyst at Oppenheimer.

Since then she predicted 100's of municipal defaults (municipalities did phenomenal and muni bonds soared), she said the 2009 fiscal stimulus was a "mish mash" and wouldn't work; she supposedly advised John Paulson (maybe to buy gold?), then she closed down her advisory, now her hedge fund is failing...

Oh boy.

Perhaps she can go back to being a contributor for Fox.

Here's the Bloomberg story.

Too bad this is not Schiff.

I called it!

For months I have been talking about a coming collapse in the euro. In my March special report, Euro Crash Alert! I spelled out the reasons why the euro would collapse and how you could make huge profits on that eventuality.

This is a much bigger call than Schiff's housing market forecast or Meredith Whitney's Citi short and neither one of them has even mentioned the problems in the Eurozone. Schiff continues to stupidly call for a decline in the dollar and a selloff in U.S. Treasuries. He's totally clueless...just babbles.

Is Nouriel Roubini about to go down in flames?

Long time perma-bear, Nouriel Roubini, is predicting that stocks will drop and the government will nationalize the banks. His gloom and doom forecasts over the past two years have made him a household name, but he's always been a bear. (A broken clock is right twice a day; on military time it's right once a day!)

Roubini's continued dire forecasts, in light of new data suggesting that the economy is stabilizing, might suggest that his views are nothing more than an entrenched and inflexible personal belief system, which wants to view the United States and the world's monetary system, as inherently flawed and un-fixable.

Only time will tell, however, I have a hunch that people like Roubini, Meredith Whitney, Schiff, Rogers, et al, will go down in flames with their inflexible and out-of-paradigm analyses of the global economy.

Mortage-Refinancing Boom Fuels Surge in Bank Fees to Highest in Nine Years

Bank profits likely to surge and take many by surprise. When will Meredith Whitney catch on??