The US banking system is to see the worst downturn in credit for generations, according to Oppenheimer & Co’s analyst Meredith Whitney.
Whitney forecasts that the worst profit margins since 1990 will be seen, there will be massive defaulting on a variety of loans and the most dire housing crash since the Great Depression.
Earlier, Whitney correctly painted the unpleasant portrait of Citigroup’s subprime woes, earning her a reputation as an accurate forecaster.
Across the US, housing prices are falling, a situation that has not occured since the Great Depression according to Whitney.
Consumer credit is another area of concern, and US bank stocks could slump by as much as 40%.
In a second negative Citigroup prediction, Whitney has stated that the bank must shed $100bn of assets to shore up its balance sheet.