Tuesday, December 21, 2010

Meredith Whitney Strikes Again/Nike

Stocks rose once again today as the Santa rally rolls on.  Meredith Whitney was out with some more bear porn this afternoon on CNBC as she explained her "municipal default" thesis.

Please watch her interview below ESPECIALLY if you own a lot of munies in your portfolio.

My Take:

Meredith hits it out of the park once again.  I gotta admit I think I am in love with this woman.  She is sharp as a tack.  IMO, her greatest asset is that she has the ability to see problems before her competitors do as a result of her tireless research.

Mosty analysts feel compelled to ignore the facts and say whatever they need to say in order to get you to buy stocks.   This is why 98% of these blowhards on CNBC need to be ignored.

There are very few analysts that I pay attention to.  However, I stop and listen when someone like a Jim Rogers gets on TV because they don't have an agenda.  He already made his billions so he doesn't care what you do with your money.

I don't believe Meredith has one either because I see the research that she does.  It would probably be much more profitable for Meredith to sellout and become a bulltarded shill.  Obviously it's not in her blood to sell her soul to the devil for a few bucks. 

She bravely continues to march on and preach the truth.  All I can say is god bless her.   It hasn't been easy:  Meredith received death threats after telling the truth about Citi before it collapsed and had to be saved by the government.  I am sure she didn't make any freinds today either.

IMO, she continues to do some of the best work on Wall St and she is 100% right on the muni crisis.  I had no idea muni debt issuance doubled in the last 10 years.  This tells me minues are just another Wall St Ponzi scheme that is not sustainable.

Hearing Mrs. Whitney discuss social unrest was also an eye opener.  If she is right, you can expect to see massive union riots similar to what we have seen in Greece.  The gangsters on Wall St must have been choking on their caviar once she got done with this interview.

NIKE Earnings

OOOPS!!!......This is going to leave a mark....

From Barrons:

"Nike CEO Mark Parker sounded confident on the footwear and apparel giant’s second quarter conference call, but he warned analysts that Nike (NKE) will see margin pressure in the quarters ahead as input costs rise. Nike beat analysts’ earnings and revenue estimates for the second quarter, but the stock fell more than 5% in after-hours trading.

Parker and the other executives on the call said costs for commodities like cotton, as well as labor and transportation costs, have increased in recent months and will soon begin to hit Nike’s bottom line. Parker said margins could be squeezed through the end of the fiscal year, and CFO Donald Blair said he expected margin pressure for up to 18 months. Blair also said that a stronger dollar could weigh on future results."

Quick Take:

I hate to say it but I told you so!!!  You can thank Ben Bernanke's idiotic QE for triggering the commodity run and the Chinese inflation which is forcing wages to rise over there.  You can also thank the European debt crisis for the rising dollar in recent weeks.

The Bottom Line

Wall St can't have it both ways.  Everything is always bullish.  If our dollar falls then exports will rise.  If the dollar rises then it's a sign our economy is strong.

I say BS.  Stocks have risen 22% from the summer lows and are priced for PERFECTION.  This rise has occurred despite learning that our states are broke, 1/5 of the country is unemployed, and the PIIGS in Europe now stand on the brink of collapse.

How on earth does Wall St think this run will continue given the state of the global economy?  Are they now dealing crack down on the trading floors?

One thing has been clearly obvious for over a year now:  The stock market decoupled from the economy over a year ago as the trading robots took over Wall St.  How long this lasts is anyone's guess, but I do believe that eventually the two will get back on the same page.  When it does look out below.

I hope the Fed is watching companies like NIKE struggle as a result of their zero interest rate/QE money printing policies. 

You create bubbles throughout the financial system when you are reckless with monetary policy, and companies are going to start feeling the pain down the road as inflation takes center stage in 2011.

It's time to end all of this nonsense and start focusing on creating stability and confidence within our markets instead of running them like a casino on steroids.


Anonymous said...

"The stock market decoupled from the economy over a year ago as the trading robots took over Wall St. How long this lasts is anyone's guess, but I do believe that eventually the two will get back on the same page. When it does look out below."

And thats when the March 2009 "suckers rally" will be EXPOSED for what it was right Jeff? Thats when you will be proven right al along... 3/2009 was just a "dead cat bounce" and that we were "nowhere close to the bottom" just like you said right Jeffy?

Jeff said...


Anonymous said...

I agree, I do like to hear Meridith's views & comments and she has a pretty good accuracy rate.
Is it just me or does it seem like this year above others that every comment from any analyst,fund manager etc. is bullish predicting a 20% rise in '11? To me, it just seems we have had a spectacular return in the past 2 yrs and this market is geeting toppy & add in all the bullish comments I feel I should run the other way. Or is it the fact the fed has backstopped the market that these predictions are correct and I should jump all in & not fight the fed???? This is what makes it tough to be an investor when outside influences cause shifts.
Jeff, don't feel bad. I got it wrong in 09 as well and truth be told unless you are a great market timer it could be in several yrs we will be proven correct in our thesis, the only problem was we didn't make any money. You may not agree but Anon should be able to call out bad calls, I hate to be wrong myself but I can always tell people I put my money where my mouth was and I may not have made as much but I also did not loose any either.

Jeff said...



WE must all be held acountable.

I think we will be proven right over the longer term.

The anon you speak of above has crossed the line in terms being disrespectful which will not be tolerated on here.