Famed analyst Meredith Whitney has ended a self-imposed exile from a finance world that she said had become “like watching paint dry.” In an appearance Tuesday morning on CNBC, Whitney said she is back writing market and economic commentary and focused on a real estate market that she said has the potential to hold strong for at least several more years. “Why I say there’s no risk for an immediate downturn is because there’s no forced selling,” Whitney told CNBC’s Sara Eisen during a ” Squawk on the Street ” interview. “People are sitting on big piggy banks and they’re not sweating it.” The amount of equity homeowners have built up in recent years has taken loan-to-value ratios to their highest levels in 30 years, Whitney added. That differentiates the environment today from the financial crisis era, when homeowners were much more highly leveraged and some were forced to sell their homes at discounts. “Those who have benefited from over $20 trillion in equity created in their homes in the last 10 years, I mean, that’s a staggering amount,” she said. Whitney is best known as one of the most prominent figures from the great financial crisis, which exploded in 2008 when investment banking giant Lehman Brothers collapsed. On Halloween in 2007, Whitney, working then as an Oppenheimer analyst, released research suggesting that Citigroup would need to write down its portfolio of subprime mortgage loans and had paid dividends that were greater than its profits. Hailed as a Wall Street star then, the glow would soon fade. Her high-profile and much-pilloried call in late 2010 of looming defaults in municipal bonds failed to materialize but did spark a brief wave of selling in the fixed income market. That forecast came after she had left Oppenheimer to start the Meredith Whitney Advisory Group, which she eventually shuttered to launch a hedge fund that no longer exists. Most recently, she was the chief financial officer at Kindbody , a health and tech firm. Whitney said she has now restarted the advisory firm as she sees exciting trends developing. Finance “was like watching paint dry, and things started to change about 18 months ago,” Whitney said. “I don’t think I missed anything in 10 years and that’s a big statement because there has been trading action with the banks but not a lot of big moves.” In the current landscape, Whitney thinks the problems plaguing regional banks are collective “one-offs” that won’t cause systemic damage. “There were unforced errors” that led to the failure of Silicon Valley, Signature and First Republic banks, “but I think that it’s high time for M & A in the regional banking sector. And that’s a good thing,” she said.
