Annals of no-comment, Meredith Whitney edition

By Felix Salmon
April 9, 2009

David Weidner speaks to Meredith Whitney:

When I asked Ms. Whitney this week if she deserved acclaim for The Call – in particular credit for calling the meltdown – she declined comment…

“The disclosure (at banks) was playing catch-up,” Ms. Whitney said. “You really had to dig deep and pay attention to balance sheets. A lot of people knew the system was overlevered. That’s why finding the inflection point was so meaningful.”

That’s declining comment? It seems like quite a good answer to me. The Call in question was Whitney’s sell rating on Citigroup in October 2007, when Citi was trading at more than $40 a share; it more or less marked the point at which Citigroup’s share price fell off a cliff. (See the graph below.)

Whitney’s point is well taken: it’s one thing to point out that lots of banks had lots of leverage. But it’s another thing to get the timing right and work out exactly when all that overleverage was going to hit them in the share price.

Weidner’s not impressed: he says that “Ms Whitney’s call on Citi wasn’t that great”, and compares her unfavorably to Dick Bove, Mike Mayo, and Charles Peabody; not to mention Nouriel Roubini and Nassim Taleb. But this isn’t some kind of competition with only one winner. And when it comes to research, it’s not just what you say, it’s how you say it. Whitney has the rare ability, among sell-side analysts, to speak in clear and unhedged declarative statements, which has served her very well. Add to that the fact that she was right, and you can see how she became such a star.



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Errr….it was a great call.

When you call it correctly and get mocking laughter, then later death threats, then later plaudits there’s no other definition.

Posted by otto | Report as abusive

I get Mr. Weidner’s point that, when it comes to predictions about the markets, you shouldn’t treat ANYONE like a messiah. But complaining that she got the Citi call right but failed to call out all the other banks? That’s grasping.

Nice response, Felix. Meredith Whitney deserves her fame. I recommend that David Weidner take his faux contrarian style to where it belongs.

Posted by Paul | Report as abusive

Meredith has been bang on – simple, clear, and lucid – no exaggerations, no dramatics, no hyperbole – factual, rational and logical!

Most importantly, she’s been right ….. ON THE MONEY!!

There was Elaine Garzarelli in the 80′s-90′s …… she was good …… Meredith is way, WAY better!

Posted by Remi F | Report as abusive

“It seems like quite a good answer to me.”

Is it true that when English people use the word “quite” they mean “a little bit,” while Americans tend to mean “very”? So “it’s quite cold in here” would mean something different in England and in the US.

I ask because, well, how good do you think her answer was?

Posted by minderbender | Report as abusive

To minderbender: From Merriam-Webster:

1 : wholly , completely
2 : to an extreme : positively —often used as an intensifier with a
3 : to a considerable extent : rather

usage see plenty
— quite a bit : a considerable amount
— quite a few : many

Source: y/quite

Posted by Argel | Report as abusive

Ooops, the form took the angle brackets out. Let me retry:


1 : wholly , completely not <quite finished>
2 : to an extreme : positively <quite sure> —often used as an intensifier with a<quite a swell guy><quite a beauty>
3 : to a considerable extent : rather <quite near>

usage see plenty
— quite a bit : a considerable amount
— quite a few : many

Source: y/quite

Posted by Argel | Report as abusive

Argel – that’s clearly the American usage, but I remember someone telling me that in England it’s not an intensifier, it’s the opposite (a qualifier?). See the wiktionary entry, which gets at the ambiguity.

And Felix is British (or at least sounds like it), so I was just wondering. In context he seems to be using it as an intensifier.

Posted by minderbender | Report as abusive

Nice Post Felix. Whitney said it spot on. Nobody is a prophet, but Whitney made a great call, and deserves the credit.

Posted by American_Fool | Report as abusive