Meredith Whitney: More Weakness Ahead?

When Meredith speaks people listen. She is a sharp analyst that has made some bold calls the past couple of years. Her biggest call: Citi's failures. This interview took place earlier this week on the CNBC set. Among her points in this interview:

1. Expect to see further weakness in housing prices



2. Banks are recapitalizing but very little of that is being used for loans



3. Systemic risk still pretty high for most investment banks



4. In this kind of market, money goes from "weaker" hands to "stronger" hands



5. Credit card industry will have repricing problems with their loan portfolios due to higher regulation

Her calls have been pretty spot-on recently. This interview is probably a bit extreme to the extent that she might be "overselling" the current market conditions. But at any rate, I would recommend that you keep her word in mind. And if you have a problem with her then maybe you should take it up with her husband.

Current Fortune article on Meredith Whitney [Fortune.com]

If Lehman sells Neuberger, then LEH will be bought out

With a current market value of about $11 billion and Lehman's Neuberger piece valued somewhere in the neighborhood of $8 billion, then an asset sale would then leave the rest of the firm's pieces (investment banking, fixed income, and equity) sitting somewhere around $3 billion. And thats pocket change for a larger bank. In my opinion, a sale, in effect, would be the beginning of an end of the Lehman franchise.

Lehman to sell Neuberger? [Dealbreaker.com]

Lehman mulls sale of Neuberger [CNBC]

I suspect we should know within the next couple of weeks. This is a huge decision for LEH and playing the Neuberger card is like going "all-in" in a high stakes poker tournament. Let's just hope that they don't overplay their hand.

Moszkowski cuts Goldman's 3Q EPS

Merrill Lynch star analyst, Guy Moszkowski, not only cut 3Q EPS from $4.28 to $2.80 but also lowered his price objective from $212 to $205 on the basis of lower book value.

EPS was cut primarily on the basis of weaker global markets and an above-average sensitivity to commodity prices and volume.

Goldman should report their 3Q numbers sometime in the middle of September. GS closed the day at $179.55 a share, down $1.22 from yesterday's close.