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The Implications of Misquoting Nouriel Roubini and Meredith Whitney

In grasping for straws, the bulls try to cite the "less bearishness" of known bears such as Nouriel Roubini and Meredith Whitney. In so doing, they either misinterpret remarks, or at least take them out of context.

Roubini expressed his surprise that bulls had quoted him as turning bullish. What he had done was to put a "sunset clause" on the economic contraction, the end of 2009. One notes that the date is rapidly approaching. One can, by stretch of the imagination, look ahead (six to nine months) to a reasonably robust recovery. Not so, says Roubini, who is looking for a sluggish, nominal, recovery. Take that as you may, but that is not information that justifies the recent market recovery.

In the case of Meredith Whitney, her call in Goldman may best be interpreted as "trading buy." She is well aware of Goldman's good quarter (which she is not sure can be sustained; as it were, we think it can be). She knows full well that short-term traders will react to short term good news, and the stock will rise. But her call carried a warning, overlooked by most, that the stock price could fall after an upward pop.

So the bears haven't really become less bearish. It's just that the market's perception of them have.