Monday, April 6, 2009

Meredith Whitney Rally Tomorrow?


It will be interesting to see if there is a Meredith Whitney rally in financial stocks tomorrow.  She definitely helped pull the financial indexes back today from a larger sell off.  But, the full effects of her surprisingly bullish call on financial stocks might be felt tomorrow.

Is it just me or does it seem like she makes these calls for her clients, and not based on her actual opinion? When her clients are short, and there positions are moving against them, she comes out and supports a bearish position.  When her clients have finally decided to dip their toe in the market, she comes and and issues an optimstic call, even with famed analyst Mike Mayo comes out on the same day and calls for a sell of the bank stocks.  

However, she did maintain a cautious attitude pointing out the low level of tangible equity for the bank stocks.  But, she did reccomend against shorting financial stocks, which could lead to a strong short covering over the next day or so.  Who actually listend to Ms. Whitney for more than one day is still to be determined.  

Maybe, with Whitney's new firm and her desire to become profitable, she has let her clients needs act as a conflict of interest in her reserach (and probably before hanging up her shingle). This is purely an opinion.  But, the timing of her appearances on financial networks (CNBC), seems to support this conjecture.  

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