Philip Davis

Meredith Whitney Threatens Severe Deflation For Your Portfolio

Sadly I do and I've been short on finacials for quite some time, this is an edited version of my comments on this subject but I have a very long-standing record of shorting the financials into last year's madness - I simply believe that the downside is now fully priced in and that the retail investors are now getting fooled again by the same apocolyptic nonsense that took the homebuilders below reasonable value.

I have a member site and do not often write articles focusing on a subject but I've seen my people in fear and panic over what I believe is a coordinated attack on the financials that may have some merit, but there is no NEWS here, just a lot of puffed up numbers based on extrapolating worst-case scenarios being thrown out as if they were facts.

Meredith is simply the pundit of the moment, willing to go on every TV station with a religious fervor and she will be summarily discarded as soon as the numbers come out to prove her wrong. There's one in every bubble on both sides of the trade and she is just the face of the moment for the financial bears.

There is no easy money to be made in going long financials, it will be a long and painful recovery but the short side of the equation is becoming a road to ruin and my job is to keep my people from making a mistake, either by bailing out on the shares that are down or, even worse, by thinking they should jump on the bandwagon and go short at what may prove to be the dead bottom.