Largest Consumer Credit Contraction Ever

by | Nov 17, 2009 | Headline News | 3 comments

Do you LOVE America?


    Meredith Whitney, who became well known in the mainstream after she blew the doors open on bank weakness in 2007, says she hasn’t been this bearish in over a year.
    (Video follows excerpts and commentary)

    I look at the board and every single stock from Tiffany to Bank of America to Caterpillar is up. But there’s no fundamental rooting behind why these names are up, particularly in the consumer space. So, something we’ve also talked about is a real contraction in consumer credit. You haven’t seen this much consumer credit contraction ever. You didn’t see this kind of consumer contraction, credit contraction even in the great depression.

    Now the consumer has a lot less liquidity, so 1.5 Trillion of credit lines have been pulled from the system. And, that credit contraction is re-accelerating. So, folks that are hoping for a robust consumer market for Christmas are going to be dissapointed.

    Gerald Celente calls it the Chirstmas Crash, and now we have Meredith Whitney coming to the same conclusion.

    Most of the folks I talk to say their Christmas budgets are significantly reduced from just a year ago. Retailers are going to be hurting this Holiday season, and this will not bode well for earnings reports come first quarter 2010.

    While The Fed may continue to pump money into the system, there is currently no fundamental reason (other than a crashing dollar) for stock markets to continue to rise. In early 2010, the fundamentals will prove to be even worse than they are now.

    Look out below.

    Watch Meredith Whitney discussing banks, credit and the economy on CNBC November 16, 2009:


    It Took 22 Years to Get to This Point

    Gold has been the right asset with which to save your funds in this millennium that began 23 years ago.

    Free Exclusive Report
    The inevitable Breakout – The two w’s

      Related Articles


      Join the conversation!

      It’s 100% free and your personal information will never be sold or shared online.


      1. M-Dub! What a gal. Though it looks like she’s bulking up for the winter……..

      2. Talk banker to me baby!

      3. HA!  Good stuff, guys.

      Commenting Policy:

      Some comments on this web site are automatically moderated through our Spam protection systems. Please be patient if your comment isn’t immediately available. We’re not trying to censor you, the system just wants to make sure you’re not a robot posting random spam.

      This website thrives because of its community. While we support lively debates and understand that people get excited, frustrated or angry at times, we ask that the conversation remain civil. Racism, to include any religious affiliation, will not be tolerated on this site, including the disparagement of people in the comments section.