CHESSNOID

I haven’t seen this lady before but she seems extremely sharp about the US financial companies. Meredith Whitney, executive director of equity research at Oppenheimer, discusses what’s in store for the financial sector in the video below

Meredith Whitney on CNBC

She even mentions American Express in the video and about why they are cutting credit limits in the areas that have had the highest housing price depreciations. There were a few other good points she mentions about housing prices, liquidity from securitization, and where the housing prices are headed with good critical thinking. I can see why she is the executive director or equity research.

I googled her to see what else she has said. I found this on Yahoo AP:

Her latest report on the financial sector did just that. If you thought the worst is behind us, or that the credit crisis hit bottom in the first quarter, or that there are signs that the loan market is coming back, or that Wall Street firms are finished with their capital raising, Meredith Whitney has three words for you: You are wrong.

In fact, Whitney, who established a name for herself when she correctly predicted Citigroup’s dividend cut last fall, believes the credit crisis will “extend well into 2009 and perhaps beyond.” She predicts there are still more shoes to drop, that banks will need to cover another $170 billion in loan losses by the end of next year, and that the earnings expectations for Wall Street firms are currently grossly underestimated.

“We believe the real harrowing days of the credit crisis are still in front of us and will prove more widespread in effect than anything seen,” she wrote in a report published last night.

Whitney says that the banks used “bad math” to finance mortgages, and they relied too much on the securitization market. Now consumers are left with very little liquidity, which will keep the market for new securities essentially closed for business. She says that regulators’ too-little-too-late reaction to the housing bubble will lead to knee-jerk lending legislation that could end up hurting consumers instead of helping them. Whitney predicts that credit card lines will be reduced by 45 percent in 2010. And lower consumer liquidity will only lead to more losses for the banking sector.

I also found a video I could embed from youtube back from May. I like to see if the experts were right in their predictions and she seems to be correct. She is predicting the economy will be bad well into 2009 and beyond.