Thursday, November 18, 2010

Cassandra on Cue

Banking sector still under pressure,

says financial analyst Meredith Whitney
in this Financial Times interview
[6 min.]

80,000 layoffs coming.

(Not to mention a meltdown in the muni market.)

[postscript, 11-19-10:]

The Meredith Whitney Advisory Group, founded by Whitney in 2009, is seeking SEC approval to be licensed as a credit-rating agency, entering a field dominated by the Big Three--Moody's, Standard & Poor's, and Fitch. Her company evaluates credit risk for corporate bonds, U.S. municipal bonds, and global structured products. In her view, the Big Three did a poor job of this in the years leading up to the global financial crisis and have "lost all credibility on securitization" after consistently overrating toxic securities. Whitney outlines her challenge in this four-minute interview with Financial Times.

Whitney fills out another Big Three, joining Elizabeth Warren and Sheila Bair as arbiters of transparency in high finance. Warren has chaired the Congressional TARP Oversight Panel and is the President's special advisor on the newly created Consumer Financial Protection Bureau. Bair chairs the Federal Deposit Insurance Corporation and has been known to mix it up with the biggest Wall Street banks over their lack of disclosure and undue risk-taking.

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