Meredith Whitney Says Banks Not Facing Mortgage Meltdown Reality
Author: Rob K. Blake | Date: August 4, 2008 | Filed In: Mortgage News
Meredith Whitney, Oppenheimer & Co. analyst, who saw the subprime mortgage meltdown coming years in advance, believes the banks are not moving fast enough to mitigate the credit crisis.
In a Fortune article, Meredith Whitney, shows concern for an extended credit crisis because the banks won’t swallow the “bad mortgage” pill.
I agree…
The banks and investment firms need to put confidence back in stockholders, depositors, and debt investors minds by doing the right thing here and now.
The right thing is admit your mistakes, lay off 25% of their employees to cut costs, and sell their bad loans at 10 cents on the dollar taking the hit on the chin in the next quarter.
Then they could go out into the market and raise capital without the providers of the capital wondering if there are any more “surprises” hiding in their balance sheet.
Will they do this?
Of course not…
They are still holding firm to the idea the securitization market will come back and they can borrow their way out of this mess. In the same way a compulsive gambler just needs another $1,000 stake to wager so he can “get even”.
I’ve got news for you guys…it ain’t coming back!
And if it does there will so much new regulation, you won’t want to use it anyway.
C’mon Mr. Banker and Mr. Wall Street, you got us in this mess…you can now extend it indefinitely or get us out quick.
Do the right thing…for once.
Good Luck!
Author: Rob K. Blake
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I have to agree with many of the things that Meredith Whitney has to say. She was very blunt in her interview on CNBC. I hope that the things she is now predicting will not come true. I hope we have seen the worst of this self induced trouble that we are in. I appreciate your comments as always.