Meredith Whitney: Even More Bearish On Housing And Financials

The prominent bank analyst Meredith Whitney is back on CNBC, about as bearish as ever, not only on financials, but on housing as well.

In addition to saying that she expects the housing market to get worse in Q3 and Q4, the maven again reiterated the blatantly obvious, namely that all the recent earnings beats by financials have been an accounting sham driven by:

* Provisioning for less future losses, by reducing NPLs in the current quarter, thus generating profits out of manipulated air (particularly relevant for HSBC‘s results yesterday, which were the main factor in pushing the market 25 points higher)

* Increasingly more difficult for consumers to get loans. (Not much of an issue – Obama will probably blame this on the previous regime).

* And the glaringly obvious, i.e., that all European banks sit on bloated amounts of largely overvalued sovereign debt. Should another sovereign risk flaring appear, it will be time to dig up the old skeletons of financial insolvency once again, only this time with EUR LIBOR and Euribor about 100% higher than where they were in May, she says.

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