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It is fascinating to watch the PR machine(s) thrown into overdrive, pumping up the legend of the moment. Oppenheimer & Co banking analyst, Meredith Whitney, is the toast of Wall Street. Ms. Whitney, ahead of the herd, bravely went out on a limb, issuing a downgrade on Citigroup (NYSE:C) in an Oct. 31 report, predicting the bank would be hard hit by the subprime market meltdown. I say 'bravely,' for her dire predictions shook the financial giant to the core and brought upon her death threats!

"No one had the moxie to put in print what I put in print,'' said Whitney in an interview recently.

Actually, Ms. Whitney, the 10Q Detective did have the gameness to put in print a thesis that you did—more than a year ahead of your prescient call.

Loyal readers of the 10Q Detective blog know that in December 2005, I first cautioned investors on the adverse affect to financial performance of sub-prime loan originations:

H&R Block (NYSE:HRB) is counting on its mortgage origination unit to be a continuing strong driver of top-line growth. For the second half of fiscal year 2006, management believes that the Company can achieve funding volumes consistent with first-quarter levels of $10 billion to $11 billion per quarter resulting in full year origination growth of approximately 40 percent. HRB's mortgage-centric reliance on the subprime mortgage market will be its EPS albatross: tighter credit requirements and higher borrowing rates will lead to smaller interest rate spreads on loan originations, lower average gains on whole loan sales, and reduced net margins on its loan portfolio.

Casting aside the hubris of ego, it is a tiring exercise, nonetheless, to watch as others get the credit, glory, and $$$ that elude me. Perchance, if I had the institutional/banking relationships of Wall Street's new Maverick, some Street outfit would foot the bill to leverage the most of my winning bet, too.

Oops! My mistake. Where is Elliot Spitzer when we need him to lecture us about that alleged firewall between banking and research? Oh, I forgot, Client No. 9 is too busy consorting with prostitutes—riding dirty—to remind us what befell erstwhile Internet analyst, Henry Blodget—who, In December 1998, correctly predicted that Amazon.com's (NASDAQ:AMZN) stock price would hit $400 (which it did a month later, gaining 128 percent).

Meredith, are you listening?

Glory is like a circle in the water,
Which never ceaseth to enlarge itself,
Till by broad spreading it disperses to naught.
~ William Shakespeare (King Henry the Sixth, Part 1)

Media attention ensued, and in 2000 Mr. Blodget milked his newfound 'moxie' into a prized position at Merrill Lynch (MER). Of course, Merrill, in turn, leveraged the business media’s worship of their new Internet deity to bring in buckets of web-related investment banking and institutional research fees (trading commissions).

"The glory that goes with wealth is fleeting and fragile," mused philosopher George Santayana (1863-1952).

Shown the door when the dot-com bubble burst, Blodget joins other former Wall Street oracles - and now mere media footnotes of the past 25 years - Joe Granville, Elaine Gazarelli, and Ryan Jacob.

He who pursues fame at the risk of losing his self is not a scholar. ~ Chinese philosopher Chuang Tzu (ca. 369-ca. 286 B.C.)

Maybe its better to toil in obscurity.

Update:

In an interview on CNBC last week, Whitney said Merrill Lynch (MER) may lose money this quarter and suffer write-downs of $6 billion, as credit problems worsen.

Whitney now expects Merrill to lose $3 per share in the first quarter, and tripled her projected write-down from $2 billion. She had previously forecast a profit of 45 cents per share. The analyst also cut her 2008 profit-per-share forecast to 20 cents from $4 a share.

Analysts on average expected profit per share of 17 cents and $3.82 for the respective periods, Reuters Estimates said.

Norma Desmond: There once was a time in this business when I had the eyes of the whole world! But that wasn't good enough for them, oh no! They had to have the ears of the whole world too.


"Many expected the fourth quarter to be the 'kitchen sink' for the industry," Whitney wrote in a separate report dated Thursday. "First-quarter results (will) be a rude awakening."


Max Von Mayerling: Madame is the greatest star of them all.

Is Meredith secretly pinching our feeds?

Cecil B. DeMille: You know, a dozen press agents working overtime can do terrible things to the human spirit.

On January 19—weeks ahead of Whitney’s revised earnings guidance—we said: "The 10Q Detective believes that the Company understated asset impairment charges in the fourth quarter, and we believe that the stock will underperform the market as rising levels of non-performing assets continue to adversely impacting 1H:08 profitability."

Norma Desmond: All right, Mr DeMille, I'm ready for my close up. ~ (Gloria Swanson, Sunset Blvd.)