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Meredith Whitney Threatens Severe Deflation For Your Portfolio

The most interesting thing she mentioned on her interview on CNBC -- was that she wished that all the banks would dump all their mortgages because it would be so much easier for the analysts - rather than lowering numbers each time the ABX / CDX falls due to some fund dumping securities. She's made some good calls -- although I'm questioning the rationale for dumping estimates for mark-to-market losses especially when she herself realizes that over the long run, they are worth more. There was an excellent job done by Berstein in looking at the mark-to-market losses experienced by AIG -- highly recommend that people read it.

Definitely not insinuating that there's no issues in the financial sector here. However, assuming that the fed is successful in putting a bid on the underlying securities in the bank's capital base -- one has to ask, what then is the true level of writeoffs over the next 18-24 months. If it's lower -- then the stocks move up significantly. If not -- the Whitney's right.