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Meredith Whitney, who made a name for herself predicting the 2008 financial crisis, has decided to go back to her roots and reboot her research business.
Whitney was an award-winning analyst at
Oppenheimer
(ticker: OPY) who wrote a bearish report on
Citigroup
(C) in October of 2007 noting that the bank’s dividend was greater than its profit. Citi’s stock dropped precipitously over the next two years and its CEO resigned.
Whitney left Oppenheimer in 2009 to set up her own research firm, Meredith Whitney Advisory, and later worked as an institutional investor and as chief financial officer of two startups, but is now relaunching her research business.
“I’ve always loved research, I’ve always loved digging into things and breaking things down and then trying to translate them to investors,” Whitney told me in a recent interview. “But I stopped writing because writing on banks was like watching paint, or maybe less exciting. It wasn’t until about 18 months ago that I thought that things were changing and interesting. I’m really excited to write again. So I’m just resurrecting what I started in 2009.”
So Meredith, what’s changed? What are you so interested in writing about?
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“I think one big thing is how the financial industry is going to restructure, what I call ‘slimline,’” she tells me. Industrial companies consolidated and restructured for decades, she says, and now financial institutions will be doing so as well. “When I started in the industry, there were monoline businesses that were incredibly profitable, there were smaller institutions that were incredibly profitable,” she says. “Now, everybody has to become and justify a profitable business model. So I’m excited to write about that.”
Whitney also has her eye on the nexus of demographics and finance.
“Another trend I think is very interesting is Gen Z and the second half of millennials,” she says. “They don’t have money, they’re over-employed working multiple jobs. So they’re spending what they earn.. How are they going to become homeowners? And how are they going to create wealth because the classic creator of wealth in the United States has been homeownership. The lower half of the population is fragile and is going to have to be banked and catered to in a very different way. They’re not a credit generation. And so the typical standard of FICO scoring is not going to be relevant. There’s a lot of rich stuff here.”
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Write to Andy Serwer at andy.serwer@barrons.com
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