La Belle Dame Does Wall Street - Again

The US equity market is heavy today ahead of an option expiration given the failure last night of the Citi stock offering, the rise in unemployment claims, and of course the slight from la belle dame to the prowess and staying power of Lloyd and John.

Even though Meredith Whitney is 'on a roll' as they say in the States, it is the rationale for her cuts that is of the most interest to us. These have not yet been disclosed. We will update the details when they become known.

Today is also the confirmation hearing for Ben Bernanke with the requisite endorsement of key Democrats like banking lackey Chris Dodd. The opposition is largely Republican with few Democratic defections.

It is ironic that Ben and his Fed are still stonewalling the Congress on the delivery of requested information. Have the Democrats no shame?

As an aside, we knew top Obama advisor Rahm Emanuel was a bare knuckle politician with his roots in the Chicago political machine. We did not know until today that his role was as a fundraiser (colloguially known as 'bagman') for then Mayor Richard Daley. Talk about bringing the heart of darkness into a reform administration!


WSJ
Meredith Whitney Cuts Goldman, Morgan Stanley Estimates
BY BRENDAN CONWAY
DECEMBER 17, 2009, 9:12 A.M. ET

NEW YORK--Meredith Whitney cut earnings estimates for Goldman Sachs Group Inc. and Morgan Stanley through 2011.

Ms. Whitney, head of Meredith Whitney Advisory Group and known for her bearish calls during the financial crisis, now predicts Goldman's earnings per share for the fourth quarter will be $6, down from $6.38. She also said its earnings will be $19.57 a share this year, $19.65 next year and $24.04 in 2011. The cuts take nearly 40 cents off the 2009 Goldman estimate, more than $2 off next year's and $3.44 off 2011's.

The Morgan Stanley 2010 earnings projection was cut to $2.60 a share from $2.63. For the year after, the forecast was dropped to $2.75 from $3.28.

The rationale for Whitney's weaker outlook on Goldman and Morgan Stanley was not immediately available. The figures appeared in a Wednesday note to clients...