As you already know, Whisperer has been critical of US Banks like Wells Fargo. Their stunning turnarounds in profits have been a large factor in the current market rally that continues to gather steam.
Enter Meredith Whitney, a former analyst at the investment bank Oppenheimer & Co. Inc.
Whitney, who has her own firm now, is renowned for calling out the problems with banks' toxic assets before the issue became widespread. What's her take on the great bill of health given to banks by the recent stress tests?
Whitney thinks Banks are overvalued and the government enabled them to have better first quarter earnings than they should. "At a core basis, I would not own these stocks," she said on CNBC. "Their business models are not going to come back."
Whitney also said that consumer spending is still going to remain slow. "There's a massive retraction in consumer liquidity," said Whitney. "Credit contraction is happening at an accelerated pace. Consumer spending is going to be less than people expect going forward."
Whitney also issued an ominous warning for stock market investors when she said that the rules of trading have changed because of the government's role. "For investors, you invest on what you know to be the rules of the game," said Whitney. "But with the government involved, no rules apply."
Whitney said the changing rules create a big problem for investors going forward. "The biggest danger here is having the retail investor shut out for a period of time because they don't know who to trust on market values."
Day after day more warnings come out about the health of this market rally and how it is not based on solid fundamentals.
The Whisperer encourages you to take heed.