Renowned analyst Meredith Whitney ended her self-imposed exile in the financial world, which she said was “like watching paint dry”. In an appearance on CNBC on Tuesday morning, Whitney said she was rewriting her market and economic commentary and focused on the housing market, which she thinks has at least the potential to remain strong for years to come. “Why I say there’s no immediate downside risk is because there’s no forced sell-off,” Whitney told CNBC’s Sarah Eisen in an interview on “Squawk on the Street.” “People are sitting on big piggy banks, and they’re not breaking a sweat.” Whitney added that the number of homeowners who have accumulated equity in recent years has pushed the loan-to-value ratio to a 30-year high. That distinguishes today’s environment from the financial crisis era, when homeowners were much more leveraged and some were forced to sell at a discount. “Those who have benefited from the over $20 trillion in assets their homes have created over the past 10 years, I mean, that’s a staggering number,” she said. Whitney is best known as one of the most prominent figures in the financial crisis, which erupted in 2008 when investment banking giant Lehman Brothers collapsed. On Halloween 2007, Whitney, then an analyst at Oppenheimer, released research suggesting that Citigroup would need to write down its prime mortgage portfolio and pay dividends higher than its profits. Heralded as a Wall Street star at the time, the shine faded quickly. Her high-profile and much-mocked call in late 2010 for an imminent muni default failed to materialize, but did spark a brief wave of selling in fixed-income markets. The forecast came after she left Oppenheimer to found Meredith Whitney Consulting Group, which she eventually shut down to launch a hedge fund that no longer exists. Most recently, she served as CFO of health and technology company Kindbody. Whitney said she has now relaunched the consulting firm because she sees exciting trends developing. Finance “was like watching the paint dry, and things started to change about 18 months ago,” Whitney said. “I don’t think I’ve missed anything in 10 years, and that’s a big statement because there’s been deal action with the banks, but not a lot of big moves.” In the current situation, Whitney sees issues plaguing regional banks It is a collective “one-off” issue that will not cause systemic damage. “Unforced mistakes” that led to the collapse of Silicon Valley Bank, Signature Bank and First Republic Bank, “but I think it’s a good time for regional banking mergers and acquisitions. It’s a good thing,” she said.
