David Weidner is making a Call on former Oppenheimer analyst Meredith Whitney. Her rise to fame is unwarranted, he writes in today’s Wall Street Journal. The call she made about Citigroup back in October 2007, widely hailed as prescient, “to put it bluntly … wasn’t that great,” he says. “It wasn’t the first, nor was it the best. Before we douse her with more champagne, put her on TV with Charlie Rose and hand over the keys to the Treasury Department, it might be worth taking another look at what really happened.”
“The Call did not say Citigroup was stuffed with hundreds of billions of dollars in toxic assets. It did not say that multiple banks will fail unless the government intercedes. It didn’t mention Bear Stearns (which she once expected to earn more than $11 a share in 2009), Lehman Brothers or American International Group Inc. It was a call that Citi was losing money and would have to take drastic action to raise capital.”
Weidner makes some very good points, among them that people should be more wary of “crowning messiahs on Wall Street,” since that’s what got us into this mess in the first place. But nonetheless, we’ve seen this kind of thing go down before, and we can pretty much guess how Whitney is going to respond, which will be with some variation of “He’s just jealous.” And everyone knows there’s no good comeback for that.