Meredith Whitney Sees 80,000 Wall Street Jobs Cut - Bloomberg
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In an interview with Bloomberg radio, Meredith Whitney, chief executive officer and founder of Meredith Whitney Advisory Group, said that Wall Street will see massive layoffs following year-end compensation that will surely disappoint.
“You will see very weak compensation at year end, bonuses that disappoint dramatically. The next iteration is full-scale layoffs. We think to the tune of 80,000 in the U.S. over the next 18 months.”
“You had a 2008 where everything bad happened, but most importantly. What happened in 2009 wasn’t real profits for Wall Street, it was just reversing those writedowns.”
She added that the government purchasing plans actually accelerated the gains by Wall Street, as Whitney called these “paper gains.”
“For the top seven banks in the U.S. that had to recapitalize, 40-plus percent of their equity volumes came from doing their own deal.”
On the Bush Tax cuts, Whitney said that at least over the last year the economy is seeing the evidence of unintended consequences for the consumer, making it much more difficult for small businesses to access credit.
“It's become increasingly more expensive to be poor in this country. So I think you see a bifurcation - you used to have like a three-class system in the United States. Now you have a two-class system. You have the rich and you have everyone else.”
Earlier this week, Whitney proclaimed that the states will be the next big burden on the U.S. government in her 600-page report, “The Tragedy of the Commons.”
"The similarities between the states and the banks are to the extreme to the extent that, the states have been spending dramatically, growing leverage dramatically, muni debt has doubled since 2000, but spending has also grown way faster than revenue," Whitney said. "You have to look at the states and the risk that the states pose, because the crisis with the states will result in an attempt at least for the third near-trillion-dollar bailout.”
“You will see very weak compensation at year end, bonuses that disappoint dramatically. The next iteration is full-scale layoffs. We think to the tune of 80,000 in the U.S. over the next 18 months.”
“You had a 2008 where everything bad happened, but most importantly. What happened in 2009 wasn’t real profits for Wall Street, it was just reversing those writedowns.”
She added that the government purchasing plans actually accelerated the gains by Wall Street, as Whitney called these “paper gains.”
“For the top seven banks in the U.S. that had to recapitalize, 40-plus percent of their equity volumes came from doing their own deal.”
On the Bush Tax cuts, Whitney said that at least over the last year the economy is seeing the evidence of unintended consequences for the consumer, making it much more difficult for small businesses to access credit.
“It's become increasingly more expensive to be poor in this country. So I think you see a bifurcation - you used to have like a three-class system in the United States. Now you have a two-class system. You have the rich and you have everyone else.”
Earlier this week, Whitney proclaimed that the states will be the next big burden on the U.S. government in her 600-page report, “The Tragedy of the Commons.”
"The similarities between the states and the banks are to the extreme to the extent that, the states have been spending dramatically, growing leverage dramatically, muni debt has doubled since 2000, but spending has also grown way faster than revenue," Whitney said. "You have to look at the states and the risk that the states pose, because the crisis with the states will result in an attempt at least for the third near-trillion-dollar bailout.”
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