Meredith Whitney was a guest host on Worldwide Exchange this morning, as we she was live in the London studio.
Here’s some of the notes we took:
So far she hasn’t seen anything huge — the topic has largely been the FOMC minutes that are due to come out today.
But she notes that it’s foolish to think that banks will restart lending so long as their model is broken, and by that she means, without the ability to profit from the securitization market, the banks don’t know how to make affordable loans to consumers anymore.
Update 5:25: Now she’s talking like the Meredith Whitney we know and love.
–Housing prices will take another leg down due to all the shadow inventory and banks need way more capital she says.
–Will we see another double dip? It depends on housing, which as she just said is probably going down again. But she calls it a “light” double dip.
— On Fed MBS buying, she argues there’s no other buyer at current prices, so basically Bernanke will have to keep buying. “They’ve boxed themselves into a very difficult position… if they stop buying, there really is no substitute buyer.”
5:56: Weird moment. When asked how to trade bank stocks, she responds “That’s advice I reserve for my clients.” (Not interested in having anything too definitive on record, perhaps?)
6:05: Asked again what would make her turn bullish, she says she’s bullish on some financials and likes the payment industry (mentions Wal-Mart (WMT) of all companies. She was also asked (a little awkwardly) about her lagging performance — as per Bloomberg — but she didn’t respond to that.
Her view on commodities and the dollar? No answer. She passes. But she reiterates in her final line: “The housing market will surely double dip.. you’ll see dramatic writedowns across the banks.”
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