Whitney Says Banks To Fall

Meredith Whitney claims to be batting a 1000 when it comes to calls on bank stocks over the last two years. I don't know if that's true or not, but now she's making a new call: bank stocks should fall 10% to 15% this year. I don't think that's an overly aggressive view given the fact that she's right that the banks aren't lending. However, in my opinion, the sector may fall that much over the next couple of weeks, rebound and then fall again. The financials have been lagging for a while so this is no surprise.

The interesting thing to me is that banks are treating their clients with good credit the same as the ones with bad credit. That tells me they don't really believe in the credit scoring system, so the whole thing is a farce. I am currently in the process of refinancing our mortgage, and everyday I'm told about a new requirement that must be met in order for the underwriter to approve the loan.

The behavior of the financial industry leadership, with a few exceptions, makes it abundantly clear that these guys are no more talented or knowledgeable than your average small businessman. They just got the right degree at the right school and got their foot in the door at the right time. I don't mean to offend anyone, but my point is that, in my opinion, there is no justification for the salaries and bonuses they are paid. I really don't understand how shareholders can put up with it. When the Fed says lend, they lend, and when the Fed say stop, they stop.

I don't know the answers, but I am tired of being treated like a number instead of a human being. I don't think I am the only one. People are getting fed up of it, and in the long run the banks will suffer if they continue to alienate their customers.