MEREDITH WHITNEY: HOUSING DOUBLE DIP IS CERTAIN
21 June 2010 by Cullen Roche
8 Comments
Meredith Whitney’s macro outlook remains quite negative. She believes austerity in the USA will lead to a “very rough second half”. In terms of the jobs market she says unemployment is likely to remain high as structural problems in the private sector persist. Whitney believes the banks are “zombies” that are still loaded with non-performing loans. In addition, Whitney says the bank balance sheet problems could deteriorate as she sees an “unequivocal” double dip in housing:
Part 1:
Part 2:
Source: CNBC
I’m impressed by Meredith. She does her own thinking that’s for sure.
Meredith for Treasury Secretary!
She has a remarkable ability to cut to the essence, tell it straight, and somehow, make you like it!
What a contrast to Geithner! And Palin, for that matter!
However, I suppose she has the freedom to tell the truth (without losing her job), whereas many CEO’s and govt officials (and govt wannabes) do not.
I have followed her for a year and a half and so far she has been on the money on her calls. That was why this group of reporters were basically eating crow, because everything that she predicted 7-8 months ago on their show( and they made fun of her for it) is now coming true.
Excuse me?
She’s been mega-bearish and wrong for over a year, and admitted as much on CNBC this morning: “I’ve seen things happen over the last twelve months that are shocking to me, that I never expected to see…”
Indeed.
Not the least of which has been her call on consumer discretionary stocks, i.e. retailers, which have led the market the whole way up, and in April were essentially at an all-time high- not exactly what you might expect from her thoughts over the last year on the credit-emaciated consumer.
Just one more example of how predicting the future is very difficult, especially for people who start to believe their own press!
Is that the part where consumers got money to spend by not paying their mortgage? Isn’t there some limit to that?
Probably is a limit- however, you might be interested in Mike Santoli’s column in Barron’s this week, where he asserts that total consumer debt costs are at very benign levels historically, due to lower interest rates, even while absolute debt levels remain elevated.
If I’m not mistaken, a central tenet of Meredith’s view a year or so ago is that consumer spending would be crushed by collapsing credit availability. That obviously hasn’t happened, at least so far (being early vs. being wrong is the proverbial distinction without a difference in financial markets), and the longer it doesn’t happen, the greater the odds that it never will, for obvious reasons.
+1. But it’s sort of inspiring to know that she could make a nice living based upon on a single accurate call that she made about Citi three years ago…
Meredith is the new Elaine Garzarelli