Dick Bove is prone to hype, but he’s no dummy. And he’s been in the business a lot longer than Meredith Whitney. My bet is that neither of them is completely right and the answer is somewhere in the middle (as that’s how these things tend to be).
Meredith Whitney made a great early contrarian call with respect to housing and financials. My hat’s off to her. Then she got steamrolled by Reflexivity as a bunch of banks got recapitalized during a “senseless” rally – something she never saw coming. Meredith Whitney’s information and take on things is not so different from a lot of other analysts right now. The problem is that banks continue to raise capital at “inflated” prices which confounds her bearish predictions. The fundamentals are important. But Reflexivity is changing the fundamentals.
I have no real opinion on the Big Banks. They are so far outside of my sphere of operations (and understanding) that I don’t pay too much attention to them. I view them more as a curiosity than anything else.
