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Biography of Meredith Whitney

Mukul Deshpande Aug 28, 2020
Meredith Whitney is an investment analyst who appears on business channels. She is well-known for her early and accurate predictions of the mortgage and credit crisis.
Meredith Whitney is a financial analyst, who appears on the CNBC, Fox Business, and Bloomberg news channels. She graduated from Brown University, and has worked with Oppenheimer & Co. She launched her own company, Meredith Whitney Advisory Group LLC, and also started her own hedge fund, Kenbelle Capital LP, in 2013.
Her father is Richard Whitney, a venture capitalist, who also worked in Richard Nixon's Department of Commerce. She married former WWE wrestler, John Layfield, on February 13, 2005 in Key West, Florida.

Meredith Whitney - The Financial Analyst

Meredith Whitney has researched on the repeal of the Glass Steagall Act and on the success of credit card companies. She is a stock analyst who does research on stocks, giving them ratings and recommendations, such as 'underperform', 'market perform' and 'outperform'. She is a pessimist for most parts; always expecting the prices to fall. She usually recommends shorts, which makes her very popular with hedge funds.
Whitney predicted the financial crunch of 2007, which was the biggest crisis since the Great Depression. The crunch occurred because of the deregulation of the financial industry. Borrowers were defaulting on loans, and it became difficult to obtain loans during the crunch. Many people mistakenly thought the crunch to be a reaction to the stock bubble that occurred at the end of the 20th century.
Whitney also anticipated the fall in the prices of homes. The housing sector failed because mortgage lenders gave loans depending on credit scores and not on loan value. As a result, home buyers could not pay back their loans, which led to bad mortgages.
The government tried to solve this problem by stimulating the economy and by bailing out companies. It helped the banks that lent a helping hand to mortgage borrowers. However, this tactic did not help the 'underwater' mortgage borrowers, who owed more than the current value of their homes.
Whitney also conducts research on banks, and she had predicted that banks, such as Citigroup, were in trouble. She had seen the bankruptcy of Lehman Brothers coming and thought that the Bank of America was doing better than Citigroup, but still not good enough.
She was also aware that Bear Stearns would go bankrupt, but hadn't written a report on it. The government was helping banks in borrowing money. Taxpayers were displeased that their money was being wasted on funding these banks.
Whitney thought that the banks are making profits and their stock prices are rising, only because the government is helping them. It is impossible to value bank stocks with the price-to-earnings ratio because the banks have no earnings; or by price-to-book ratio because book values are always changing.
Whitney said that she could fix the banks' problems and that nationalizing them is not the answer. She also believed that the government should help smaller banks and not the larger ones.
On the other hand, the government was helping large banks in acquiring smaller banks. According to her, if banks were to return to profitability, it will only be because of accounting tricks.
The financial crunch of 2007 was a global crisis, as foreign trade decreased. The dollar and yen currencies rose and oil prices declined. International financial organizations had to help developing countries. In the USA, risk increased and unemployment rose.
Meredith Whitney opined that the recession would last, at least until the end of 2010, because consumer spending will not go up any time soon. The consumer spending may, in fact, go down. This is because credit lenders are not allowed to increase interest rate if consumers do not pay their dues on time.
Whitney can be considered an outsider in the financial clique because she is a woman. She is, however, very good at fundamental analysis and can predict well by looking at balance sheets. However, Whitney is still an unpolished diamond. She still has to prove herself at being able to make correct predictions when the markets go up.
It may be said that Whitney has made great strides in a short period of time. This is the reason why she was able to make it to the Forbes' list of "The Best Analysts: Stock Pickers", in addition to being included in the New York Post's "50 Most Powerful Women in New York City".
She was also ranked in Fortune 500's "50 Most Powerful Women in Business", and won CNBC's "Power Player of the Year". She was also in Crain's magazine "New York's 40 Rising Stars - under 40" and Time 100's "World's Most Influential People". The public, and especially the investor community, look forward to Whitney's forecasts in the future.