We’re listening to the Meredith Whitney conference call right now, but while we patiently wait for the Q&A during which we’ll ask what everyone else is thinking– have you ever killed person?– here’s something interesting, considering that while DD’s victims usually don’t like it when she violates them in public, typically they roll over and take it, rather than screaming, “You take that back!” Today, though, Wachovia decided it has had enough. Stifel Nicolaus is out with a note saying that WB is demanding a retraction of Whitney’s latest report, claiming that her conclusion that Wachovia may have sold $50-60 billion in Golden West loans at a substantial loss during the quarter is “dead wrong.”
Update: Whitney mentions some sort of calculating error in her report but stands by her original conclusion.
Oppenheimer Note-US Banks [PDF]
Oppenheimer-US Bank Slide Show [PDF]
MEREDITH WHITNEY
Oppenheimer analyst Meredith Whitney cut her second quarter earnings estimates for Merrill Lynch and Citigroup today, predicting that the firms will lose $4.21 a share and $1.25 a share, respectively, and take writedowns of $5.8 billion and $12.2 billion. Whitney also suggested a reshuffling of management and, taking a cue from fellow analyst Dick Bove, whose reports have really been upping the ante of late, suggested Angelo Mozilo to replace incumbent Citi CEO Vikram Pandit.
Merrill, Citigroup Estimates Cut by Meredith Whitney [Bloomberg]
We’re all for unrelenting mockery of the Citi that never sleeps. That much should be obvious. But can we get a ruling on how much longer the story about Dollar Dominatrix Meredith Whitney downgrading the C in October is allowed to be discussed before we move on to more recent anecdotal evidence of the ‘group earning its You Suck recommendation, like CEO Vikram Pandit taking naps in the handicapped bathroom when that sort of behavior is expressly forbidden? The most recent instance, from the August issue of Bloomberg Markets Magazine, is actually not so painful in its rehashing of the tale, partially because it brings up a good point: Deutsche Bank’s Mike Mayo, and not Whitney, was actually the first to downgrade Citi, though she’s the one who’s gotten all the glory (attention she professes to “love”). But mostly because it brings up this:
We casually mentioned yesterday that perhaps Oppenheimer analyst Meredith Whitney ought cut the stand-up from her Citi reports, but only because we think her bits are much (more unintentionally) funnier when she lets the facts (“We’ve got a horrible slogan,” “We just lost a trillion dollars,” “We’re two quarters away from $10”) speak for themselves. But we got so caught up in the fact that she’d make a Stephen Hawking joke that we failed to notice that the dollar dominatrix seems to have sent the message that she’s done with big C entirely.
“We wish [Citi’s] management team all the best in their ambitious endeavors, but we fear [it] is past the point of fixing,” Whitney wrote. Does that not sound like a “Thank you and good night”? “You’ve been a great audience, but there’s really nothing left to say”? Where is she supposed to go from there? (She can’t very well start recycling the dividend slashing routine at this point.) Obviously Whitney’s grown weary of the ‘group, and set her sights on a bigger challenge. We’re thinking Merrill, but if you’ve got a better idea (JPMorgan), feel free to get it off your chest at this time.
Citi Is Beyond Repair [NYP]
Listen, we talk a lot of shit about Citi here, and I highly doubt that’s going to stop any time soon. But let’s just all agree that the C’s got a new contrarian indicator and she’s telling us to buy. Big time. And that contrarian indicator is: Meredith Whitney. Crazy? Yes. Implausible? No. Here’s why.
As she’s wont to do, Whitney recently offered what can be interpreted as largely negative statements about Citi, following the bank’s announcement that it promises to begin realizing its “enormous potential.” She even upped the ante a bit, moving from “you will suck until you do exactly what I tell you to do” to “you will suck no matter what you do so just give up and die.”
Specifically, Whitney said today that CEO Vikram Pandit faces “an impossible feat” in trying to turn the diversified whorehouse into a profitable company. Not surprisingly, Mistress Meredith recommended that investors sell their shares, noting that “they don’t have the revenue power [and] they don’t have the earnings power in so many of their businesses.” She also took issue with the lack of details in Vikram’s Friday morning presentation, entitled, “Locating The User Manual To This Bitch.” All valid, if not predictable, points. Whitney lost us, however, when she started in with the jokes.
“Even Stephen Hawking could not pull this off,” she said. And that’s true—Stephen Hawking, who to our knowledge has never attempted to underwrite any subprime debt, probably couldn’t singlehandedly turn that dump into something resembling a solvent company. It’s just slightly disconcerting when your most vociferous critic, who’s supposed to be offering reasoned, sober analysis is playing to the Borscht belt. She might as well have said, “Even Chuck Norris could not pull this off.” (In fact, if yuks are her new schtick, she should have gone with Chuck Norris.) Anyway my point is that while we will continue to be unrelenting in our mockery of Shittygroup, you should take this as a sign to back up the truck and buy this bitch. And reserve your seats from Meredith’s debut at the Laugh Factory’s monthly open mic night pronto.
Citi’s Pandit Faces `Impossible Feat,’ Whitney Says [Bloomberg]
A “decent amount” of banking associates were apparently laid off at Citi yesterday afternoon. No word on packages, or if Meredith Whitney cackled when she heard the news (according to sources at the ‘group, the firm now calls up the analyst every time headcount is reduced and asks “happy now?” But in a sychophantish, begging sort of way, and not with an attitude, which would make her angry).
Very exciting news for those of you like your analysis spicy, and delivered with whip and chain: your favorite analyst, and mine, has been promoted! Oppenheimer dollar dominatrix Meredith Whitney was made an MD yesterday. This means two things: the freedom to sexually harass subordinates, and to finally tell us what she really thinks of Citigroup without having to worrying about offending conservative higher-ups. Gloves off, people. Spikes on. Not sure who should be more frightened, Citi shareholders reading her reports, or the male members of the Summer ’08 associate class. Hopefully we’ll find out soon.
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