Widely followed analyst Meredith Whitney has some new insights about the banking sector. What lies ahead?
Unfortunately, it's not pretty. A surge in borrower defaults and unemployment pressures will make 2009 an even uglier year for banks than last year, Whitney said on CNBC. She predicted "breakups and M&As on a grand scale" as the industry seeks to remake itself in the face of all its capital pressures.
"I don't think this year is going to look any better than last year," Whitney said in an interview Tuesday. "In fact it will look worse because there's so much credit coming out of the system."
Whitney, a former analyst at Oppenheimer who recently opened her own firm, is renowned for calling out the problems with banks' toxic assets before the issue became widespread.
However, not everyone is forecasting the same degree of turbulence. In fact, Whitney’s replacement at Oppenheimer appears to have a much sunnier outlook.
As Fast Money Series Producer John Melloy wrote today in his blog, Whitney’s replacement Chris Kotowski rates Goldman and Morgan Stanley at 'Outperform' and Bank of America , Citi and JPMorgan Chase at 'Perform'.
And that leads to our Charles Schwab Question of the Day. Do you agree with Meredith Whitney that the banking crisis will be worse in 2009 than last year?
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CNBC.com with wires