Why I won’t argue with Meredith Whitney……
by Tom on January 22, 2009
in Market Musings, banks
FT.com / Comment / Opinion – America’s banks need to hold a yard sale
The fact is that there is money on the sidelines looking for opportunities to invest. One constant question I get from investors, who need somewhere to put their money, is: if I had to own something, what would it be? I am not very helpful to them at the moment as my answer is that I would own nothing.Tom here….
Let me spell out 3 reasons why I won’t argue with Meredith Whitney:
- She has a much more successful track record in calling what’s right and what’s wrong in the financial world than I’ll ever have.
- She gets paid the big bucks for making these kind of calls. I get paid the small bucks for writing mortgages and for blogging about the mortgage world.
- I think she’s right.
So what’s she basically saying? Essentially the article says that banks keep saying, “Things are undervalued, we won’t sell now.” And things keep getting worse and worse and worse.
So banks need to have a clearing house yard sale get rid of all of the junk at once sale. But that is going to mean that we won’t have some of our existing banks around because they’ll go under. Oh well, if they’ll go under because of a yard sale, they are technically insolvent any way.
What do you think? What would happen if the banks did have a yard sale?
Technorati Tags: Meredith Whitney, Banks
