She says "there is no fundamental rooting as to why these names are up—particularly in the consumer space."
She is also disappointed that Ben Bernanke did not say how the Federal Reserve plans to exit the mortgage-backed purchase program. "The US consumer was going through the biggest credit contraction ever—even bigger than that during the Great Depression. "That credit contraction is accelerating," she said. "There's nowhere to hide at this point."
The banking sector is not adequately capitalized and will need to raise more capital in the coming year. The residential real estate market is likely to worsen and remains a much bigger threat problem than the commercial property market. The government's mortgage modification program won't result in any major improvement in homeowners' ability to stay above water, she added.
"I don't know what's going on in the market right now because it makes no sense to me, "The scariest thing about the Fed's program is that the money on the sidelines isn't going to support that asset class, ..., so the trillion dollars of Fannie, Freddie and mortgage-backed securities that the Fed is holding—there's no substitute buyer there."