Dates To Watch

From The Wall Street Journal:

Meredith Whitney literally phoned it in to CNBC this morning to discuss the Jersey Shoring-Up Loan. At the end of the discussion, she warned that July 1 is going to be a key date for the muni market, because that’s when new state budgets are going to take effect, slashing aid to many localities.

Always the consummate professional scary person, she didn’t rise to a baited question from Carlos Quintanilla, who asked her if she was secretly wishing for a large muni default to make her much-derided call of widespread muni massacres look better.

“Of course not,” she said, unconvincingly, “but it’s sadly an inevitability.”

“When I come up with numbers of defaults, I can think of dozens of large ones off the top of head,” she added.

Please do tell! But she didn’t, and nobody asked her for any names.

Comments:

Note the lack of respect Meredith Whitney gets from CNBC and the WSJ because of her views of the muni market.

In our view, there are several dates of which we need to be keenly aware:

1) July 1st and the weeks that immediately follow due to state budget impacts.

2) August 2nd due to the impasse and potential US default over the federal debt ceiling.

3) September is usually a poor month for the stock market, and a scare in stocks could spill into the bond market resulting in large scale liquidation.

4) October has the dubious honor as the month of the crash of '29 which resounds in investors minds to this day. It is our estimate that this is the month of greatest risk in the near term of a second Lehman event. Such an event would bring on a global contagion within weeks.

So on that cheery note we have some advice for Ms. Whitney. Not that anyone is interested in our advice, but we give it anyway.


Do not give dogs what is holy; and do not throw your pearls before swine, lest they trample them under foot and turn to attack you.
Matthew 7:6 RSV

The jokers on CNBC and the other major media outlets are blinded by an optimism bias. So save your breathe Meredith, for they will mock your wisdom or even blame you for the inevitable collapse.

Comments

  1. GO LONG!!!!!!!!!!!!!!!!PW

    Global central banks extend crisis-lending program - MarketWatch

    http://www.marketwatch.com/story/global-central-banks-extend-crisis-lending-program-2011-06-29?link=MW_latest_news

    Inflation on a global scale, as I noted a few weeks ago the global bailout is at hand. I too was/am very Bearish, but the central banks have other plans.

    Bill

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  2. You may well be correct Bill, that going long is the right choice for now. It seems that Mr. Market is up to all sort of mischief and the more investors that he can fleece the better.

    I am staying on the sidelines until I get a firmer trend confirmation.

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