Following his not-so Grand Tour of Europe, the esteemed vagabond financial scribe Michael Lewis has returned home to report on California for Vanity Fair:
In our opinion, it’s not as perceptive as his articles on Greece or Ireland but it’s still worth an Instapaper click. Read more
Nobody tell Meredith Whitney but municipal bond funds finally ended their 29 week run of outflows:
There’s been plenty of hurly-burly lately over forecasts of default rates in the municipal bond market.
But what of recovery amounts, should muni bonds default? Read more
Municipal bonds, doctor doom will see you now.
The WSJ reports Wednesday that Roubini Global Economics analysts David Nowakowski and Prajakta Bhide estimate there will be about $100bn of muni bond “defaults” over the next five years. Read more
Wednesday’s House hearing into state and municipal debt had a touch of the “Scottish play” about proceedings.
When Meredith Whitney was finally mentioned, Chairman Patrick McHenry quipped that the rules had been broken. Read more
Bloomberg has tracked down Meredith Whitney, bought her scrambled eggs, and demanded an explanation.
In an article out on Tuesday, Whitney is asked about her prediction that “You could see 50 sizable defaults, 50 to 100 sizable defaults” amounting to “hundreds of billions of dollars’ worth of defaults” in the municipal bond market: Read more
Never mind two-tiered government bond markets in Europe — what about two-tiering in US municipal debt?
That’s the implication from the WSJ on Monday morning and from CBS’ 60 Minutes report on state finances on Sunday evening. Read more
Independent banking analyst Meredith Whitney believes banks will cut up to 80,000 jobs in the next year and a half, reports Bloomberg. Bank payouts will also collapse as Wall Street banks continue a structural decline begun three years ago, Whitney warned in a report. Maybe — but Barclays’ new chief executive Bob Diamond is planning rapid growth for his bank at least, reports the NYT. Not without political resistance to investment banking at Barclays’ home base in the UK, however, FT Alphaville observes — which may presage moving its headquarters to Wall Street sooner rather than later. Read more
…and it will not be pretty for banks or consumers.
So says Meredith, ‘superstar banking analyst’, Whitney of the Meredith Whitney Advisory Group LLC (MWAG). Read more
This Saturday is Halloween. If you’re in finance and fancy making an ironic statement — or just want to deflect from being part of ye most hated of trade guilds — then perhaps you might consider some of the following outfits we at FT Alphaville have cherry-picked as favourites for this year’s festivities.
Remember, last year’s Paulson and Bernanke masks are now very passé . Read more
Okay – if you want to know what Meredith said about Goldman Sachs on Tuesday, you no longer have to try to mind-meld with the bankslayer.
Here’s why she downgraded the mighty Goldman: Read more
This is how analyst Meredith Whitney treats the media — the industry that helped turn her into the renowned bankslayer she is today:
We at FT Alphaville are not getting involved in this one, though we think our readers might want to wade in.
The very vocal Janet Tavakoli, of Tavakoli Structured Finance, has been in an ongoing spat with Black Swan man Nassim Nicholas Taleb. Read more
David Rosenberg‘s latest morning note has some interesting observations on the behaviour of investors and the cult of personality that seems to have arisen around former-bank slayer Meredith Whitney:
We thought that the ability of one person to move the market went out three decades ago with Henry Kaufmann over at Salomon Bros., but Meredith Whitney did manage to do the same – in a bullish fashion, though – with her CNBC remarks on Goldman yesterday morning. (Although, it was interesting that Dell’s reduced guidance for the current quarter garnered little attention.) What was interesting was how she stressed that this was not an industry-wide comment but rather specific to the firm and yet this was the tide that lifted all boats across the financials and the entire stock market for that matter. What this tells us is that even after 12 years of no appreciation in equities, and after brutal bear markets seven years apart, the public’s resolve in the stock market has not been shaken. The fact that the equity market could rally this much based on one analyst’s commentary is testament to the view of how badly investors want to believe that the recession and credit crunch are behind us and that unbridled prosperity lies ahead. As WTO Director-General Pascal Lamy said yesterday, “I would caution against excessive optimism.” Read more
Finally… (H/T GP)
Earlier on Monday the media were fed an expurgated version of Meredith Whitney’s “buy” recommendation on Goldman Sachs — issued ahead of the investment bank’s Q2s on Tuesday. All we got was news that MWAG saw the stock as attractive in a bear market, and that she’d slapped a $186 price target on the paper. Read more
Trouble is, we don’t know why.
On the issue of credit card debt and the deteriorating health of the US consumer, the FT reports on Thursday:
Record credit card losses are pushing big US banks to come to the rescue of off-balance sheet vehicles they use to transform hundreds of billions of dollars in consumer loans into securities sold to investors. The support provided by Citigroup, Bank of America, JPMorgan Chase and American Express underscores how the deteriorating health of the US consumer is opening new fronts in the financial crisis. Read more
Meredith Whitney appeared on CNBC Monday afternoon with some insightful comments on the recent rally in banks.
Via Clusterstock: Read more
Richard Bove (of Rochdale Research, formerly of Ladeburg Thalmann), in the Wall Street Journal on Monday:
In restarting his coverage of Bank of America Corp. (BAC), he called the economy’s bottom. (Bove, like Mayo, recently changed firms.) “My belief is that the economy has turned,” Bove said in a note to investors. He said Bank of America’s stock price will ultimately “return to its all-time highs.” Read more
Does she even recognise the concept?
Bank-slayer Meredith Whitney has been speaking with Steve Forbes on the subject of the financial industry. Most of it is a recap but she does give her (fresh) opinion on the mysterious early 2009 profitability of US investment banks like Citigroup, JP Morgan and Bank of America. Read more
Someone in finance is hiring, and it’s not just anyone…
It’s bank-slayer Meredith Whitney at her new non-Oppenheimer gig. From the NYMag: Read more
Only last week superstar analyst Meredith Whitney – bankslayer, the anti-pandit, etc. – announced she would be leaving her present employer, Oppenheimer, and setting out on her own.
Welcome, then, Meredith Whitney Advisory Group. Read more
Meredith Whitney, the analyst whose prescient bearish warnings on Citigroup and other banks have earned her a strong following, has left Oppenheimer & Co to set up her own research and advisory firm, reports the FT. Whitney, 39, who starts work Thursday at Meredith Whitney Advisory Group, plans to build an advisory business specialising in banks and will apply for a broker-dealer licence. Reuters adds that Whitney is married to John Layfield, a World Wrestling Entertainment champion. Read more
Exhibit A – Meredith Whitney tells the FT she’s worried about the credit card industry, says aversion to risk will deprive consumers of more than $2,000bn (Nov 10).
Exhibit B – Whitney’s team at Oppenheimer release a note title “Consolidated lending market poses risk to overall consumer liquidity”; says credit cards are “second key source of consumer liquidity, the first being jobs” (Nov 30) Read more
Meredith Whitney cut her teeth on Citi. For nearly a year now the analyst has had a strong bearish ‘sell’ slapped on the banking monolith. A rating which, when initiated, made Whitney’s name go household.
Today is something of a vindication then. Even in the wake of the TARP, this institution is barely viable. Read more
Elsewhere this morning,
- Investment banks may be abusing the money they are borrowing from the Federal Reserve’s discount window in order to issue dividends, said a top House Democrat. Read more
Beware humans. Oppenheimer & Co analyst Meredith Whitney told the Times after JPMorgan upped its offer for Bear Stearns:
Jamie Dimon was clearly very upset with how distraught Bear employees were. His decision to raise the offer was definitely a human move and as a leader you can’t be human. He has made a big mistake and opened a Pandora’s box. If $10, why not $20, or $50? It’s like with a child: if you give the shareholders an inch, they will go for a mile. Read more
Might the undoing of Bear Stearns be a cathartic event, causing Meredith Whitney to rein back on her famously bearish views?
Evidently not. Read more
You have the temerity to flag up the fact that the world’s biggest bank isn’t in tip top shape, and what do you get? Death threats, apparently.
Meredith Whitney, the CIBC analyst who prompted a slump in Citi shares last week by first suggesting the bank might have to cut its dividend, told the Times over the weekend that analysts were afraid to be negative because of a culture of intimidation on Wall Street, adding that she had had several death threats. Read more