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.

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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: