Meredith Whitney More Bullish On U.S.

September 15th, 2011

San Francisco Chronicle
By Jonathan Chen
Sept 14, 2011

Maria Bartiromo of CNBC is at the Delivering Alpha conference and she is speaking with Blackrock (NYSE: BLK) CEO Larry Fink, Meredith Whitney, Jim Leech, and Pierre Lagrange.

Meredith Whitney said that she is more bullish on U.S. then other markets, for the fact that the U.S has “ermrging markets” within it, namely the agricultural states. She said the fact that China is going from a net food exporter to importer helps the U.S. Increased global demand helps the U.S.. She is a conservative person, and she likes known rules, and we not need to underestimate this.

Whitney said that the agricultural rich states have the cleanest balance sheets, and have easier comps as they have not benefited over past 25 yrs from the housing boom. The U.S.’s biggest problems are California and Florida. She believes that housing will not come back because we do not have a national housing policy.

We need to highlight the areas of growth, instead of trying to help problem areas.

Fink is talking about Europe, and what we are seeing is a lot of de-risking going on. There is a lot of money sitting in cash in Europe, as well as a lot of money that is “short” Europe. The situation in Europe is different from 2008 and 2009. Europe will solve its problems, but Germany will need to be a major player. He does not think we can “spin out Greece” because their liabilities are in Euros. The whole nation would default, unlike Argentina, which had its own currency. No one in Europe would survive a Greek default, as they can not just go from the Euro straight to the drachma.

To save Europe, it will require a huge amount of money from the ECB, and the European Union.

When asked about a potential Greek default, Fink said that he did not know the definition of default, as they own so many assets, not just Treasury assets.