Monday, December 1, 2008

Meredith Whitney on Financials

Meredith Whitney, executive director of equity research at Oppenheimer and really the only sell side analyst to get this whole thing right, was everywhere today. There was an op-ed piece in the financial times and a nine minute interview on CNBC. Both helped contribute to the market meltdown today.

CNBC Interview

Op-Ed Piece

As an analyst, it is my job to do fundamental research and call it as I see it, and my bailiwick is financials. My outlook has been negative for over a year and, technically, I have been "right" on my calls. Seeing massive capital destruction has brought me no pleasure, but unfortunately I see little on the horizon that would change my outlook. In fact, after observing the US economy so derailed, I feel that I must act as a citizen of this great country to attempt to offer solutions to this economic train wreck we are all involved in.

First, I am more bearish today than I have been in the past 18 months. In so far as the market has impacted on the economy, capital destruction has been so intense that multi-trillions in capital raised by institutions through both private and public capital has gone to plug holes and not stabilise the effects of shrinking liquidity to corporations and consumers.

She goes on and gives four recommendations on how to help the situation.

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