Meredith Whitney Interview by Forbes
What a shocker, she’s still negative on financials. However she does say on a pull-back, you can buy some of the smaller non-TARP banks. Interestingly this is the first time I heard her touch on the impending implosion of state and municipal budgets. Source
So, one key variable in evaluating your mortgage, what your mortgage portfolio is worth is, No. 1, what employment is. But No. 2, where you think home prices are going to go
I am staying away from bank stocks still.
Two-thirds of the lending market for both mortgages, and then for credit cards, is dominated by the top five banks. So, you’ve really got to dislodge that to make any material improvement in the system. And I don’t think the government is prepared yet to dislodge that because it’s too disruptive and too uncertain of an economy.
You know, I bet most people couldn’t even name some of the smaller ones. I think that on pullbacks, you can buy a basket of small stocks that are clean, obviously non-TARP-based stocks.
12% of the U.S. GDP comes from state and local spending. And the states and the local municipalities are just as guilty as the over-levered consumer.