Meredith Whitney On Consumer Credit, Financial Buys And Mark-To-Market
By Chris Barton on March 14, 2009 | More Posts By Chris Barton | Author's Website
Meredith Whitney is one smart woman. She was on the money on the financial sector more than a year ago and now when she talks, I listen. She wrote a piece in the Wall street Journal earlier this week and went onto CNBC to speak about it.
The basis is that credit card lending is shrinking. She calls it the next credit crunch. 45% of Americans carry revolving credit card debt. There will be a reduction of this debt by 2.7 trillion dollars this year. This will impact consumer spending. I listen to this very closely because I believe consumer spending will lead us out of this bear market and the recession in general.
Buying for her is a case of “dating not marrying” and therefore she is a buyer right now. She thinks a company like Goldman Sachs (GS) might be building market share now much like they did in 1998 when the markets sold off.
She also mentions a piece that might become an issue in the future - is TARP money being used to fund foreign loans? Taxpayer money? She sees a wave of protectionism impacting decisions that Citigroup (C) may make, for instance.
Mark to Market accounting - should it change? This was a hot topic at the beginning of this crisis and was an issue again this week. Her opinion is that it is no help to revise the rules now. The damage has already been done. It might actually hurt these companies because if the market should eventually come back, they would not get the benefit of the better market in the pricing of their assets.
3 Steps To Becoming A More Successful Trader
The Transportation Sector: Here Are Three Investments In A Sector That Are Ready To Soar
What You Should Know About Precious Metals ETFs And Taxes
Buffett Borrows For Rail Acquisition
Why Investors Should Look To Japan Again
Bay Street Stocks Slip Slightly Again - Canadian Commentary - 7 hrs ago
Stocks Close Mostly Lower Amid Disappointing Quarterly Results - U.S. Commentary - 8 hrs ago
Bay Street Stocks Linger Slightly Below Unchanged Level - Canadian Commentary - 9 hrs ago
Stocks Remain Stuck In The Red In Mid-Afternoon Trading - U.S Commentary - 10 hrs ago
European Markets Fall, Led By Banks, Oils - European Commentary - 11 hrs ago


