Meredith Whitney – No Fundamental Reason?
by Tom on November 16, 2009
in Market Musings
Meredith Whitney is probably the closest thing to a rock star in the financial world. Well, she did an interview on CNBC today and basically what she said was:
There’s no good reason for the stock market to be going up.
What does that mean? if she’s right, we’re back in the soup of a recession next year. If she’s right, housing markets are going to continue to struggle. If she’s right, mortgage rates will probably stay low for a long time (unless the government borrows more money to bribe us with).
Hmmm…..
Tom Vanderwell
Stocks are overvalued and the US economy is likely to fall back into a recession next year, well-known analyst Meredith Whitney told CNBC.“I haven’t been this bearish in a year,” she said in a live interview. “I look at the board and every single stock from Tiffany [TIF 42.99 0.75 (+1.78%) ] to Bank of America [BAC 15.86 -0.12 (-0.75%) ] to Caterpillar [CAT 60.44 1.66 (+2.82%) ] is up. But there is no fundamental rooting as to why these names are up—particularly in the consumer space.”
Technorati Tags: Meredith Whitney, Housing Market, Recession
I chuckle at the technical analysts when they allow their inner RCA Dog look to be seen in public. Max Whitmore, as you already know, predicted this market rise fully five weeks ago. Furthermore, since he’s a pure chartist, the prediction came from over 40 years of recording what the market does with a particular ’set’ of factors at play.
Therefore, if the market has made a significant upward move in ‘like’ circumstances many times in the last couple generations, one might credibly assume the fundamentals causing Ms. Whitney’s chagrin may just be a little outa kilter.
HIstory is history. Your thoughts?
you’re asking me to pick between Max Whitmore and Meredith Whitney? Yikes….
A couple of thoughts:
History is history, yes, but there is something more to it than that. Let me explain…..
- Max predicted it based on what’s happening with the charts abd based on what’s happened in the past.
- Meredith is saying that she’s worried because she doesn’t see the fundamentals supporting the current upswing as being sustainable.
Is there a chance that they could both be right? Max is looking at the charts, what has happened and the pieces fall together to predict this.
Meredith is looking at it from a subjective standpoint and is saying that I really don’t think that it’s supportable……
Tom
I don’t disagree, but my point, not as clearly stated as I would’ve liked, is that those following Max’s advice will have profited from this uptick regardless of its cause or lack of ‘legs’. When Max predicted this latest jump, over five weeks ago, he said very clearly that he saw it peaking soon, around the end of the first quarter of next year.
I wonder if Whitney is profiting from this upswing, based upon fundamentals or not?