by Anurag Wadehra
How many people foresaw the coming financial meltdown? That is the question asked by Michael Lewis. Among the people he lists, the woman who has been getting attention since last year is the once-obscure analyst Meredith Whitney. In his column called The Rise and Rise of Analyst Meredith Whitney, Lewis talks about her foresight:
It all started back on Oct. 31, 2007, when she published her now-legendary report on Citigroup Inc. In it, she pointed out that the company's dividend now exceeded its profits -- the bank was handing money back to its investors faster than it was taking it in from its customers.
On the first day of trading after her report, Citigroup's shares tanked. Four days later, Citigroup Chief Executive Officer Charles Prince resigned. In January, Citigroup slashed its dividend and set out to raise more capital.
Fortune magazine put her on its cover and had this to say:
Whitney warned last year - and continues to warn today - that the "incestuous" relationship between the banks and the credit-rating agencies during the real estate bubble will have a long-lasting impact on banks' ability to recover.
In her recent November video interview clip, she forecasts a $2 trillion wipeout in consumer credit card market from a $67 trillion market. More glum news delivered with a winning smile.
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