A few weeks ago she was on CNBC also, and gave her outlook at that time as well. You can read more about her position then as well as watch a video of her interview from that time here: Meredith Whitney Turns Bearish Again.

This morning she made some interesting comments, some of which have been bothering me and I’m sure many other people for quite some time. One of which being that she thinks the government is “out of bullets”.

Her main concern that she sees a cause for concern is the lack of credit that is available for consumers. She said consumers are “getting kicked out of the financial system.”

I have to agree with her. In my own experience, my Home Equity Line was canceled with my bank, Bank of America within the last 3 months. The letter I received said that it was canceled and my new limit was zero dollars, due to the fact that the value of my home had decreased below my HELOC.

First of all, the value of my home has decreased….. from the peak of the market, not from when I purchased my home, which was when I opened my HELOC. On top of that, I don’t have a mortgage, my home is paid off. So why was my HELOC canceled to zero?

As soon as I received the notice I immediately knew it was the banking industry conducting business without any concern for their customers, especially those customers who have made them money over the years. Instead of trying to operate a business with the intention of making money with good customers, they are now blocking the majority of people out completely, good customers and bad. After all, they received money from the government to get them through the hard times, why do they need any more money form good customers?

In years past, banks obviously lent money too easily to people at extreme degrees, who shouldn’t have been given loans in the first place. This was one of the, if not the main cause for the economic downturn that we have all been experiencing to date. Now, they are restricting credit to the opposite extreme, cutting off access to credit almost completely to all consumers.

Someone needs to tell the banking industry that there is a middle ground, where banks can provide credit to creditworthy customers and operate as a successful business. In other words, there is a middle ground. Instead, they previously had swung too high to the upside and are now swing too far to the downside. It’s a shame they don’t see their mistakes at the expense of the entire economy.

Ok, enough of my story, here’s a video from this mornings show with Meredith Whitney on CNBC:

After reaching a new high yesterday of $1153.90, the precious metal has pulled back some, albeit slightly so far.

The last few days have basically been in a sideways trading channel but prior to this, has been on such an optimistic rise that sooner or later a decline will ensue. Right?

If you took a look at a gold chart without knowing it was gold, it would look similar to previous market tops that were followed by a crash. Take a look at a housing price index chart, the 1999-200 Tech Bubble, the recent financial bubble or even an Oil chart when it was at $140.00 not too long ago.

I know what others are saying, that as long as the U.S. Fed keeps printing money, the value of the U.S. dollar will keep going down and people will continue to buy Gold. That may be, but I’m adding this post for those of you thinking things may just be getting to overly optimistic right now in Gold.

Just imagine looking at charts in a few months only to see that the U.S Dollar made a major bottom which just happened to coincide with a major S&P 500, DJIA and NASDAQ top, and Gold and other commodities made major tops as well.

I wonder what all those Meredith Whitney bashers would say then? Probably nothing at all. You wouldn’t hear a word from them then. Read more about what Meredith Whitney thinks here: Meredith Whitney Turns Bearish Again

For those who think a pullback of a considerable degree may be coming, or underway, here’s a way to try and take advantage of this using DZZ for a trading vehicle in a stock trading account. Here’s a chart to look over:

Looking at the chart of DZZ above, you can see several observations I noted: 1) the RSI above the main cahrt area has been oversold for about a week now and appears to be turning up. 2) The MACD on the bottom of the chart is in the perfect position to begin a reversal move higher. 3) The share price itself has dropped below the recent confining channel and has the potential to move back into this channel up towards the 50 day MA as it has on prior moves off the lower channel trend line.

What made me take a look at a potential trade to profit from a decline in Gold was that earlier this week Bob Pisani was shown on CNBC with a single Gold Bar that I believe was mentioned to be worth about $450,000. When something like this appears on mainstream television my friends, the end is quite possibly in sight.

This is not always the case though. The last time I mentioned I was concerned about any further upside in Gold was when I read that Gold was appearing in Vending Machines in Europe. That was back in June and we had a trade-able decline following that, but then Gold resumed its ascent. At the least, some sort of pullback may be in the cards near term.

Post your comments below to share what you think may be in store over the coming days and weeks ahead:

Actually, she said she “hasn’t been this bearish in a year”.

I ran across several forums and articles with comments where the commentors were bashing Meredith Whitney, saying that she has been bearish all along the recent rise since March, and a bunch of other to be expected types of comments.

In my opinion, when Meredith Whitney says something, it’s time to wake up and start listening. I’ve been listening to her comments for over a year now and she has been right many more times than not. (Yes, I’m a Meredith Whitney Fan)

Obviously I’m not alone as the market, in particular the banking/financial sector, sold off pretty hard after her comments yesterday.

Back on October 13, 2009 she came out and downgraded GS from “Buy” to “Neutral”, just as many other analysts were upgrading GS. Here’s how that call worked out since then:

And here’s the KBW Banking Index ETF since then:

By looking at the two charts above, you can judge for yourself whether you want to listen to her or not. If you do, here’s the Meredith Whitney interview from yesterday to listen what she has to say now. After listening, let me know what you think by commenting below: